Facebook Ads Budget Control: A Guide to Mastering Your Spending
Pay-per-click 10 min read
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Home Blog Pay-per-clickFacebook Ads Price and Bids: Basic Concepts for Advertisers
Are you interested in advertising on the world’s largest social network? Learn about Facebook Ads price, budgets and other marketing concepts today.
In 2022, Meta, formerly Facebook, Inc., posted a staggering USD $11 billion in revenues from Facebook Ads, from $86 billion in 2020, with advertising accounts for the majority of the company’s revenue.
The impressive revenue may be attributed to Meta’s social media platforms, which include Facebook and Instagram, as the top choice for advertisers. Today, the company boasts of 3 million active advertisers, with more than 70% from outside the US.
If you want to join the millions of pay-per-click (PPC) advertisers on Facebook, it can help to know how the ad auction works and how it affects ad prices. This article offers an overview on Meta’s advertising options so you would know where to start.
You can also work with a reputable PPC advertising agency to help you maximize your marketing cost (just pay the fees and the experts will do the rest).
For purposes of this article, “Facebook” and “Meta” will be used to refer to Meta technologies, collectively.
Advertising on Meta gives you the opportunity to tap into 2 billion users of Facebook, Instagram, and other Meta technologies across the globe. Using Meta’s powerful Analytics tools, you can target the audience of your ads to a degree of precision that increases your chances of conversions.
Here are other pros of advertising on Meta:
Your Page and the Meta Ads Manager are the two main sources of ads on Facebook. Your Page allows you to buy ads on a mobile device, a computer or the Pages Manager app. It’s the simplest ads buying option. Ads Manager has customization options not available on Pages. This is available on computers and as a mobile app.
The best part of using Meta is that you can start a Page for free and test the waters for a minimum fee. You can try boosting a post for as little as $1 per day.
The next section shares the basics of ad cost on Meta.
With Meta ads, you don’t have to worry about busting your budget. For most ad types, you can spend as low of $1 to $5 per day. You can also adjust your budget, pause or stop ads as you see fit.
There are two ways to define Meta ad cost:
If you want to closely monitor and control your ad spending, you can set up limits like:
For instance, you set your account spending limit for a month-long ad campaign to $100. Your amount spent rises as you run your ads. When the amount spent reaches $100, all of your ads pause, and you will receive a notification that you’ve reached your spending limit.
You may either remove or raise the account spending limit and resume your ads campaign or reset the amount spent toward your limit to match your advertising budget when you’re ready.
If you buy ads on your Page, you use auction buying and Meta will bid automatically for you. If you’re buying ads on Ads Manager, you have 3 buying type options:
In the next sections, we shall focus on the buying type available to all advertisers, the auction.
Meta uses an ad auction to determine the best ad to show to a person at a given point in time. An auction takes place whenever there’s an opportunity to display an ad to determine which ad to show to that person.
A person can fall into multiple target audiences as defined by various advertisers. For instance, Advertiser A may want to reach mothers living in Manila while Advertiser B aims to target females aged 25-35. The same person, a mother aged 25-35 living in Manila, could fall in into these two target audiences.
The ads with a target audience that the person belongs to are eligible to compete in the auction. In the above example, Advertisers A and B may compete in the ad auction.
The winner of the auction is the ad with the highest total value, which is a combination of 3 major factors:
An ad with high estimated action rate and good ad quality, together referred to as “ad relevance”, could win an auction against ads with higher bids. Make your ads relevant with the help of a Facebook Ads optimization checklist.
Check if your ads are relevant to your target audience by running the ad relevance diagnostics.
There are various metrics that can help you estimate how much you an ad campaign on Facebook would cost you. These metrics include:
Cost per click (CPC) shows how much, on average, each link click costs you. This metric is equivalent to the total amount spent divided by link clicks.
If your ad gets two clicks for a total cost is $0.60, you’d divide $0.60 by 2 (your total number of clicks) to get an average CPC of $0.30. For 2023, the average CPC for Facebook ads is $0.94.
Cost per mille (CPM), otherwise known as cost per 1,000 impressions, is typically used to compare performance among different ad publishers and campaigns. This measures the total amount spent on an ad campaign, divided by impressions, multiplied by 1,000.
For instance, if you spent $100 and received 20,000 impressions, your CPM was $5. For 2023, the average CPM for Facebook ads is $12.07.
Overall, the amount you will spend shall depend on your goals and budget. If you’re not comfortable about shelling out a lot on your first ad campaign, you may study on best practices for minimum budgets. It’s also recommended that you seek guidance from a PPC advertising agency which has the expertise and tools on sponsored ads on Facebook.
Is advertising on Facebook and other Meta technologies worth the price? There’s no accurate answer but for sure, it will never cost you more than you have to spend.
To know the real cost of Facebook Ads, analyze the cost of avoiding these sponsored ads. Boosted content will help you double, if not triple, the reach of your marketing campaigns, compared to relying on just free organic reach.
Keep in mind that there are 2 billion people actively using Meta platforms. With as low as $1 per day, you can reach out to your target audience and even expand to the rest of Meta’s massive database.
Meta, the world’s biggest social media company, is chosen by 3 million advertisers worldwide. With its 2 billion active users, it offers endless advertising and marketing possibilities. Here are important things to remember if you want to try Facebook Ads:
If you have any other questions, send us a message via our Facebook, X, and LinkedIn accounts. Let’s chat!
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