Facebook advertising cost: guide to investing the right budget

Many of our customers ask us what budget to invest in ads. The key is to invest strategically to ensure an excellent return on investment.

As for Google Ads or Instagram Ads, advertising on Facebook must be part of a well-thought-out strategy to avoid unnecessary expenses. Determining the optimal budget for Facebook Ads depends on the average cost per click in your industry, the target audience, and the management of your campaigns. We're taking stock!

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What is the cost of advertising on Facebook?

The auction system on Facebook

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Facebook Ads works on an auction system, offering two pricing options:

👉 Cost per click (CPC);

👉 Cost per mile (CPM)

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With CPC, you are billed for each click on your ads. With CPM, you pay for every 1000 views of your ad.

You won't always be able to choose between cost per click (CPC) and cost per thousand (CPM) for your Facebook ads.

The system works by determining a specific objective for each advertising campaign, with 11 goals available. Since each objective has a different purpose, Facebook Ads adapts the bidding options accordingly.

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💬 Let's take an example : if you opt for the coverage objective, the objective will be to reach the maximum number of people, and Facebook will favor CPM while allowing you to limit the repetition of your ads.

The other objectives will propose different bidding strategies, although common characteristics exist between all the strategies.

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How do you set up the best bidding strategy?

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When choosing your bid for your Facebook ads, you have two options:

👉 a bidding strategy at the lowest cost;

👉 a cost ceiling.

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The lowest cost strategy allows Facebook tooptimize your campaigns to get maximum results at the lowest cost.

On the other hand, the strategy with a cost cap requires that you Set a maximum cost per result, which Facebook won't exceed. If this cost is realistic, you have better control over your expenses.

Careful, Too low a cost may prevent your ads from showing, because Facebook won't be able to reach the desired audience at that price!

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⭐️ Our advice : launch your campaigns with The strategy at the lowest cost for a few days. You can then, by analyzing the cost per result obtained, ask Facebook to aim for a slightly lower cost, for example from €25 to €20.

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How do you control your Facebook Ads budget?

The differences between the global and daily budget

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You can choose between a daily budget, which is the amount you are prepared to pay for an ad every day, and a global budget, which can be divided over a week, a month, or even six months.

The overall budget on Facebook allows you to define a maximum amount to spend on a set of ads over a selected period of time.

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💬 For example : If a company wants to spend €1,000 over 45 days, Facebook will ensure that the expenses do not exceed €22 per day on average. If you spend €20 a day, your budget will be adjusted to around €1,000 at the end of 45 days.

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Facebook ads adapt automatically to meet your goals.

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Do you want to learn more about Facebook ads? Take our training to learn Mastering Facebook ads !

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How to invest the right budget on Facebook ads?

Evaluate the reach of your Facebook ads

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To start, you need to estimate the potential reach of your advertising based on the targeted audience.

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💬 Let's take an example : let's say your business targets people aged 18 to 65 in France, the potential reach could be 5 million people. These numbers are available when creating the ad in the Facebook ad manager.

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⭐️ Our advice : do not show your ads toan audience that is too large from the start. Why? Targeting an audience that is too large risks dilute the effectiveness of your campaign and unnecessarily exhaust your budget. Start with a targeted audience of 40,000 people maximum.

To do this, rely onFacebook audience analysis toolk helps you identify the main characteristics and interests of your audience. Thanks to it, you can target more precisely the people whose profile matches your brand, your services, and your products, and create a message adapted to their needs.

Know that, even if you are targeting 40,000 people, your Facebook ads probably won't reach all of these people.

A study conducted by a British agency revealed that only a quarter of the target audience was actually affected by the ads.

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⭐️ Our advice bis: Target your potential audience by 4 to get a realistic estimate of reach (for example, 40,000/4 = 10,000).

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Determine the number of impressions and the click rate

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For an audience of less than 10,000 people, the number of impressions per user can Vary 15 to 20 times.

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💡 To calculate the number of impressions, use the following formula: 10,000 x 15 = 150,000. Your ad on Facebook could therefore be shown 150,000 times.

The click through rate, or CTR (click-through-rate), is the Relationship between the number of impressions of an ad and the number of clicks it receives. This rate varies by sector, but the global average is 0.90%.

For a Facebook ad, an acceptable click through rate can be estimated at 0.015%.

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👉 In other words, for an audience of 10,000 people and 150,000 impressions, you could get the following number of clicks per day: 150,000 x 0.015% = 22.5 clicks. Multiplying this number by 30 gives you a monthly estimate of the number of possible clicks: 22.5 x 30 = 675 clicks.

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Define the amount to be invested

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After estimating your audience, impressions, and clicks per month, you can now Calculate your estimated monthly budget. Using the average cost per click for your industry, you can multiply the number of monthly clicks by this cost.

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💬 Let's take an example : let's say the average bid in your sector is €2.24, the monthly cost would be €1,512, calculated as follows: 675 clicks x €2.24 = €1,512.

For an audience of 10,000 people, you can expect to get 675 clicks per month for a monthly budget of €1,512.

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To finish...

Keep in mind that, even though Facebook uses an auction system, the advertising platform also takes into account the quality of your ads and the management of your account to determine your average cost per click.

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⭐️ Our advice : A/B test your campaigns regularly by changing ad texts, visuals and testing new audiences.

Better management of your campaigns results in a more advantageous cost per click or cost per thousand. Result: with the same budget, you will benefit from degressive auction rates, allowing you to reach a wider audience and obtain better results for the same price.

Would you like more advice? That's good news, at Growth Room, we are, among others, a Facebook ads expert agency !

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