Business & Marketing

What Factors Affect the Cost of Facebook Ads?

Are you looking for ways to expand your audience? Do you wonder how you can make your company visible to a much wider demographic? 

If so, you’ve probably heard about the benefits of digital marketing. The Internet abounds with articles about using SEO-driven content to reach your audience. 

These approaches can win significant results for your business. However, no digital marketing campaign is complete without social media advertising. 

Advertising on sites like Facebook can yield a substantial ROAS. But, many business owners first want to know the cost of Facebook ads. Can these ads generate enough revenue to justify buying them?

This question has a complex answer. Fortunately, we’re here to break this answer down for you! Keep reading to learn what affects the cost of Facebook ads. 

The Cost of Facebook Ads Depends on Your Bid

There’s no clear answer to the question, “How much do Facebook ads cost?” The reason for this is that Facebook doesn’t charge a set rate for its ads. 

Instead, the social media giant uses a bidding system for its ads. Advertisers bid by entering how much they’re willing to pay for your ad. Alternatively, Facebook will automatically generate your bid based on the advertising budget for business

The auction determines who wins the auction by examining the overall value that the ad creates for targeted users. They decide the overall value using:

  • The bid
  • The quality of the ad
  • Relevance of the ad to target audiences
  • Estimated action rates of Facebook users

These factors help Facebook ensure that the biggest budget doesn’t necessarily win. Once Facebook determines who wins the auction, they charge the winner the lowest amount set for the ad space. 

The Quality and Relevance of an Ad

As we’ve mentioned, quality and relevance play a part in deciding who gets the ad space. The question is, how does Facebook determine quality and relevance? 

Facebook decides these factors based on how interested it believes a person will be in seeing your ad. So, they give your advertisement a score between 1 and 10 based on how relevant it is to your prescribed target audience. 

The higher your score, the less your overall cost becomes. Facebook measures your ad relevance based on positive and negative reactions from your audience, such as:

  • Liking your ad
  • Clicking on it
  • Commenting on it
  • Disliking your ad
  • Clicking “Do Not Show Again” and citing a lack of relevance

Facebook also measures the ad’s clickthrough rate to see how much traffic it gets. The higher your rate, the lower your cost.

Estimated Action Rates

Facebook determines whether to show your ad based on how likely people are to follow the instructions you’ve optimized for. For instance, let’s say your ad is optimized for people to download a free eBook. Facebook will display your ad if it thinks it is likely that people will do this.

Place Your Bid

As you can see, it’s hard to quantify the average cost of Facebook ads. However, these factors can help you gauge how much your company would have to spend on a Facebook ad. 

So, try to craft an ad that you think will perform well by these metrics. Then, submit your bid to Facebook!

We hope this article was helpful to you. Navigating social media marketing can be a challenge for any company, regardless of its size. So, check out our other social media marketing content today to get more useful tips! 


About Author