In this article, we’ll take a look at how much Facebook advertising costs the average small business.
At Relevantly, we have 15 years of experience in marking, and have run countless Facebook ads for businesses all across North America. We’ve learned a lot about price points and average expenses.
We’ll explore how much you should expect to pay, and what factors into these prices. Let’s just jump in!
Facebook Advertising Costs: What Should You Expect
The average small business spends between $1,000 - $2,000 on Facebook advertising per month
According to 2019 statistics published by Fit Small Business, the average small business spends somewhere between $1,000 - $2,000 on Facebook advertising each month.
Some businesses spend as little as $250.00 or less, while others dedicate more of their resources to social media advertisements, and may spend up to $4,000 or more!
When thinking about Facebook advertising costs, one of the most important factors is the cost-per-click (CPC) result.
What is CPC?
CPC is pretty much just what it sounds like - “CPC shows how much, on average, each link click costs you. CPC is a metric used in the online advertising industry for benchmarking ad efficiency and performance” - Facebook Business.
Your ad’s CPC is an indication of how well it is working
When you set up a Facebook ad, you want to redirect your viewers to your website, to sign up for a mailing list, or to go to a shop or blog page. The CPC is a measure of how effective your ad is at getting those clicks!
In 2019, the average CPC is $1.86. However, each industry has its own unique average cost-per-click.
Cost-Per-Click Results - and Why It Matters
Average CPC per industry
Above, you can see some average CPC results across a number of different industries. The lowest CPC right now is an average of $0.45 for the apparel industry. The highest is $3.77, in the finance and insurance industry.
When setting up a Facebook ad, you actually get to choose how you are charged for the ad and your bidding strategy. Some examples include:
Cost-per-click (charged every time you receive an ad click)
Cost-per-mile (charged every time your ad receives 1,000 impressions)
Cost-per-view (charged every time a video ad receives views)
With the popular cost-per-click model, you are only charged when users actually click on your ad.
A low CPC result is good. If you end up with a CPC result of, say, $0.50, it means each click only costs you 50 cents!
If you end up with a CPC result of, say, $3.00, it means each click to your website costs you $3.00, which is not ideal. A high number like this means your ad is not getting a lot of clicks.
This 24-hour ad received a CPC result of $0.07
When running a Facebook ad, your goal is to try to get the lowest cost per click result. In the ad example above, we ran an ad for 24 hours with a $200.00 budget.
This particular ad was set up for a home improvement company, and ended up with a $0.07 CPC result.
The average CPC result for home improvement companies is $2.93, which means we were significantly below average!
This let us know that we had run a successful ad, and had driven a great deal of traffic to this client’s website.
What Does CPC Have To Do With Overall Advertising Costs?
Your CPC result will have an impact on your Facebook advertising costs.
For example, companies who consistently get low CPC results may choose to lower their advertising budget.
In the ad example above, one ad with a budget of just $200 received over 2,600 clicks to their website!
You may choose to alter your budget based on your CPC results
If a significant number of these clicks result in sales, then a small business may choose to lower their budget, since they will still bring in a great deal of traffic and sales while spending a little less.
If you work within an industry that has a higher average CPC rate, such as Real Estate or Insurance/Finance, you may choose to invest a higher budget into your ads - at least at first - until you see what your unique CPC results are.
What Impacts CPC?
Although the unique industry you work within will have an impact on your CPC, there are exceptions to the rule!
So, why do some ads perform significantly better than others - even within similar industries?
Here are some common factors that affect performance:
Image (or video) quality: The images you use will have a huge impact on whether or not people are attracted to your ad. A high-quality, captivating image will almost always have a better CPC result than a low-quality image.
Level of competition: If you run a retail boutique in a trendy, up-and-coming city, it’s likely you’re going to run into a lot of local competition! The more competition, the less likely it is that customers will click your ad over another similar one.
Who you target is important - especially if your business has a more specific audience in mind
Targeting: How well you’ve targeted your audience is a huge factor when it comes to both CPC and sales results. If you’ve done a great job targeting potential customers who are likely to buy from you, you will typically see a lower CPC rate and a spike in sales.
Headlines/Call To Action: Like the images you choose, the words you include on your ad are important too. With ads, less is more. So you want to ensure the few words you do include are powerful, and your call to actions are clear.
If you’re having trouble creating an effective ad, chat with the professionals at Relevantly to see how we can help you like we’ve helped others all across North America!
Make The Most Of Your Budget - Work With The Professionals!
Many business owners run Facebook advertisements - but a majority of them are not satisfied with the results. In fact, 60% of small businesses feel like their Facebook ads are failing.
Facebook advertisements can be a cost-effective marketing solution - but only if you know what you’re doing!
Unfortunately, a poor quality ad or an ad with improper targeting can end up costing a business significantly more money than it brings in.
When you choose to work with the professionals, you can make the most out of your Facebook advertising budget - whether it’s $500 a month, or $5,000 a month!
A professional marketing team can help you create an effective budget
At Relevantly, we work with you and your budget to create a plan that makes sense for your unique business.
We have a team of professionals who can put together a targeting plan that will only reach potential customers in your service area.
We also have the experience and the know-how to create high-quality, effective advertisements within your industry.
Learn more about creating an ad that will stop the Facebook scroll - contact us now!
Work With Relevantly Today!
Are you ready to create effective ads? Are you tired of reaching your advertising budget at the end of the month - with little to no results?
We can help.
Relevantly is based out of Waterloo, Ontario, however, we service businesses in surrounding areas, the GTA, Southern Ontario, and beyond!
With over 15 years of marketing experience, our advertising experts don't just design world-class marketing strategies, we also execute them skillfully.
Get in touch with the professionals at Relevantly now, and we’ll be happy to talk about custom Facebook advertising and marketing solutions for your business.
