Facebook is undoubtedly one of the most popular social media platforms. There are millions of active Facebook users across the globe daily. Therefore, businesses took it as an opportunity to reach out to lots of people through Facebook. Over 7 million businesses are advertising through this platform. Considering the popularity of Facebook, the effort will most likely yield positive results. Social media advertising as a strategy could be effective if used correctly.
One of the factors to consider before advertising on Facebook is the cost. Since it’s a social media giant with lots of advertisers, advertising must be expensive. Facebook is also a publicly listed company, and its value kept growing throughout the years. For businesses considering to advertise on Facebook, these are the basic figures to consider. On average, it costs $0.97 per click. Per 1,000 impressions, it costs $7.19. If the campaign focuses on earning likes, the cost is roughly $1.07 and $5.47 per download.
These numbers are only the rough average since there are different factors to consider. It includes the target market, placement of the ads, industry, and others. Some businesses may even spend up to $300 million on Facebook ads alone. For these giant corporations, it seems like a small price to pay for the chance to reach out to millions of target users worldwide. The point is that the given amount isn’t the standard. It’s the average or a point of reference.
How ad auction works
For companies eager to advertise on Facebook, there are a few steps to follow. Understand ling how ad auction works is an excellent step. It starts by logging into the Ad Manager to create the campaign. Then, the advertiser will choose the daily budget, including the maximum amount to spend per day. The advertiser then selects the actions to pay for, including the views, downloads, and clicks. Then, the chosen demographic group and target device gets indicated. Once finished, the advertiser approves and launched the ad.
It’s Facebook’s turn to evaluate the ad. It grades the potential ad bid and rates, including ad quality. It will also use the estimated action rate in determining ad relevance. After evaluating the quality and relevance, Facebook delivers the win to the ad with the highest value.
Understanding Facebook ad auction is necessary since it helps find a way to lower the cost. While the advertising rate on Facebook is generally high, it can drop significantly depending on the auction results.
Crucial factors affecting the price
For the pay per click campaign, advertisers have to consider different factors in setting a budget. The cost depends on these factors. The same thing applies to Facebook.
The first factor is the target audience. When advertising to women, the business needs to pay $0.15 more than advertising to men. Advertising to older people is also more expensive than targeting younger people. The reason is that Facebook has more women as registered and active users than men. Older people also use the platform more often than younger people. Apart from age and sex, the ad may also get targeted on specific interests. If the business is about selling sports equipment, the advertiser can pick the users interested in playing sports.
Ad budget is another factor to consider. Of course, Facebook wants advertisers to pay more. Hence, auction winners are usually for the highest bidders. However, it doesn’t mean that a small business owner who couldn’t afford to pay a high price can no longer bid. The decision still lies on the advertiser. For instance, the company wants to spend about $100 a month. A bid of $1 per click can go a long way. The problem is that it’s too close to the average cost of $0.97. Hence, the ad won’t necessarily get quality impressions and clicks. If the decision is to bid $5 per click, it wouldn’t take long before that amount gets used up. Advertisers have to strike the right balance to get quality ads without burning dollars.
This idea is relevant to the third factor, which is the ad bid. The first option is the lowest bid strategy. The advertiser allows an automatic computation of the bid, so it gets the lowest bid possible. It’s the most strategic option for small businesses that are new to social media advertising. The other option is the target cost bid strategy. It works only for specific purposes like app installation, lead generation, and catalog sale campaigns.
Finally, ad placement matters in determining the price. The amount may vary on the chosen platform. It includes Instagram and Instagram stories (Facebook owns Instagram). For Facebook, it includes the newsfeed, right column, messenger, and audience network. For Facebook platforms, the amount is $0.30 cheaper than Instagram. Apart from the app, it may also appear on messenger. The audience network is even cheaper. The cost can be $0.20 cheaper. Automatic media placement is usually the best recommendation to maximize the payment.
Special occasions and seasons could also affect the price. These are instances when most people are on break and probably use their social media accounts for more hours. Thanksgiving, Christmas, Black Friday, New Year’s Eve, and Boxing Day are among them. Prices could skyrocket during these celebrations, and it’s crucial to remember that a change in strategy might be necessary.
Social media advertising can be tricky
The point is that social media advertising isn’t easy, and the cost may vary depending on a host of factors. Advertisers need to be smart in deciding how to use the allotted amount wisely. It’s even better to hire experts in social media marketing. They will extend help to businesses that don’t have a clear marketing strategy. They won’t only help determine how to craft the best ads but to find a way to lower the cost of advertising. Therefore, even if the business will pay for the services provided, it would be worth it. Facebook is a powerful tool, and businesses should learn how to harness the platform to reach out to more people.