How Much Do Facebook Ads Cost?

This is one of my favorite questions to cover because I get asked it all the time.

How much do Facebook ads cost?

The cost of Facebook ads is different for every single advertiser and changes every single day.

Why?

Because lots of advertisers are trying to grab the attention of the same people at once, and there are lots of variables that go into the final cost of your ads.

First, let’s talk about CPMs. CPM stands for cost per thousand impressions. An impression is the number of times your ad is shown. Don’t confuse this with reach though. Reach is the number of people who see your ad; impressions is the number of times your ad is shown so it includes duplication (if one person sees an ad twice, the reach would be one and the number of impressions would be two).

The CPM is the first variable that goes into how much you’re paying for Facebook ads, no matter what type of campaign you’re using. The CPM is determined by 3 things:

1. The size of your audience
2. The number of other advertisers trying to reach the same audience
3. Relevancy score / If your ad is engaging

You can’t control nor do you know how many other advertisers are trying to reach the same audience as you, but you can somewhat control the other two factors.

If you want lower CPMs, you usually need a higher relevancy score/better ads, Facebook favors highly engaging ads and as a gift gives them lower CPMs, and you need to tweak your audience size. Too large and your ad isn’t relevant. Too small and there aren’t enough people to serve your ad to or too much competition.

If you’re using the objective “traffic” or “conversions”, then link CTR will also have a big effect on the cost per click. CTR is click through rate, which is the percentage of times someone clicks on your ad compared to the number of times it was shown (impressions). So link CTR = Number of link clicks divided by impressions. The higher the CTR the lower the cost per click.

Last, but definitely not least, your conversion rate. This is super important when running conversion ads. Your conversion rate = the percentage that take the action you are optimizing for divided by the number of people who go to your website. For example, if you’re using conversion ads to build your email list, your conversion rate is the number of opt-ins divided by the number of link clicks.

Overwhelmed? Don’t be. Facebook (and Instagram) ads take time to learn, especially if you’re doing more than boosting posts. But if you do take the time to learn them, they can be a game changer for your business.