Are you interested in advertising your business on Facebook? If you’re hesitant to start your Facebook advertising journey because you’re in the dark about Facebook advertising cost in 2023, we’re here to help.
To help you make an informed decision, this article will analyze how Facebook ad pricing works, factors that impact Facebook advertising cost in 2023, the cost of Facebook advertising in 2023, and what changes to expect in 2024.
Click on each link to jump ahead to that section:
If you are wondering whether or not to run Facebook Ads or Instagram Ads, click here for a detailed description of both social media platforms and the pros and cons of each.
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Facebook Advertising Cost in 2023
Continue reading to learn more about Facebook advertising cost in 2023.
1. How Much Does Facebook Advertising Cost in 2023?
The total Facebook advertising cost in 2023 depends on a variety of factors. However, here is an estimate derived from an analysis of different sources:
WebFX, for example, claims that Facebook advertising cost in 2023 is around $0.94 per click and $12.07 per 1000 impressions. They also state that, on average, you can expect to pay $1.07 per like and $5.47 per download.
Furthermore, CydoMedia supports this claim stating that the average cost per click in 2023 is $0.97 and the average cost per 1000 impressions is $7.19.
BusinessofApps, on the other hand, claims that Facebook advertising cost in 2023 is around $0.44 per click and $14.90 per 1000 impressions.
Other sources, such as Seowithdavid claim that Facebook advertising cost in 2023 varies depending on the industry. For instance, internet & telecom have the highest average cost per click ($3.07) and food & drink have the lowest ($0.42).
Key takeaways:
Overall, the Facebook advertising cost in 2023 can vary significantly based on several factors. These factors include the type of advertisement, target audience, industry, and specific metrics you are interested in such as clicks, impressions, likes, and downloads.
Take into consideration your clicks, impressions, and CPC.
However, there are many key points to consider:
Facebook advertising in 2023 is affordable!
Estimates for cost per click in 2023 seem to range from around $0.44 to $0.97.
The estimate for cost per 1000 impressions in 2023 seems to range from around $7.19 to $14.90.
It is also important to note that the variation in costs presented by these different sources, may be skewed due to differences in methodologies, sample sizes, and data sources. However, these studies do provide us with the most accurate estimate for Facebook advertising cost in 2023.
We recommend that you conduct thorough research, track your own campaign’s performance, and adjust your strategy based on real-time data to achieve the best results.
2. How Does Facebook Ad Pricing Work?
Facebook ad pricing can be a bit complex. Importantly, Facebook ad pricing is based on an auction system.
When you create an ad campaign on Facebook, you’re essentially bidding against other advertisers for ad placements. You then pay for the number of clicks and impressions that your ad receives.
The cost of your ad depends on a variety of factors, including:
Your budget
Your ad’s relevance and engagement
Competition from other advertisers targeting the same audience
And more
We will go over the factors that impact Facebook ad costs in the next section. For now, let’s focus on how Facebook ad budgets work.
When advertising on Facebook, you set a budget for each ad you run. Facebook will then spend your budget as evenly as possible throughout the time your ad runs. Don’t worry! You will never be charged more than your set budget; you are in total control of how much you spend.
You can run ads on Facebook and never go over budget!
There is a distinct difference between how much you spend and your total budget.
For instance, you may have a monthly budget of $100, but based on the performance of the ad, you may only be charged $80 or $90.
Facebook grants you two choices when it comes to forming a budget:
Daily budgets: The daily amount you’re willing to spend.
Lifetime budgets: The total amount you’re willing to spend during the ad’s entire existence.
Facebook allows you to set up manual bid caps but this requires an in-depth understanding of your average conversion rates and expected ROI. This is why we at Relevantly Marketing recommend using automated bidding strategies.
Remember, higher bids might increase your chances of winning an auction, but they do not necessarily guarantee success if your ad isn’t relevant or engaging. Facebook aims to provide users with a positive experience, so it rewards advertisers who deliver valuable content to their audience. To discover how to produce relevant and engaging content, check out our article “12 Facebook Ad Design Tips To Help Your Ads Stand Out”.
Next, let’s learn about factors that affect Facebook advertising cost in 2023.
3. Factors That Affect Facebook Advertising Cost in 2023
There are several factors that impact Facebook advertising cost in 2023, such as:
A) Overall Engagement:
More engagement may equal lower costs.
More engagement with your Facebook ad can potentially lead to lower costs due to how Facebook's ad auction and algorithms work.
When more people engage positively with your ad, it signals to Facebook that your ad is relevant and valuable to users. As a result, Facebook's algorithm rewards your ad by showing it to more relevant users at a lower cost.
Here's how this process works:
Relevance Score: Facebook assigns a relevance score to each ad based on factors such as click-through rate, engagement rate, and user feedback. A higher relevance score indicates that users are finding your ad valuable and engaging.
Quality and User Experience: When users engage with your ad by clicking, liking, sharing, or commenting, it signals to Facebook that your ad is providing a positive user experience. This aligns with Facebook's goal of creating a positive user experience on its platform.
Higher Ad Auction Performance: Facebook's ad auction algorithm takes into account factors like bid amount and ad quality to determine which ads get shown to a particular audience. An ad with a higher engagement rate and relevance score is more likely to perform well in the auction and win ad placements.
Lower Costs: When your ad performs well in the ad auction, Facebook rewards you with lower costs per engagement (e.g., cost per click, cost per impression). This is because Facebook wants to promote ads that users find valuable and engaging, resulting in a win-win situation for both advertisers and users.
Now, let’s consider the following example to illustrate this process:
Here is an example of a fitness-related Facebook ad.
Imagine you're running a Facebook ad campaign for a new fitness app. Your ad includes a video showcasing the app's features, and it's highly engaging. Users are watching the video, clicking the call-to-action button to download the app, and leaving positive comments about their experience.
Due to this high level of engagement, your ad's relevance score increases. Facebook's algorithm recognizes that users are finding your ad valuable and engaging, so it starts showing your ad to a wider audience. As a result, your ad's performance in the ad auction improves, and you might notice that the cost per click (CPC) or impression decreases leading to a lower Facebook advertising cost in 2023.
In this scenario, more people engaging with your Facebook ad not only improves its performance but also contributes to lower advertising costs.
B) Ad objective:
With Facebook ads, there are several ad objectives to choose from.
Different campaign objectives have different levels of complexity and desired outcomes. For instance, a campaign aimed at website conversions will likely have a higher cost compared to a campaign focused on brand awareness.
This is due to the underlying objectives, competition, and measurement metrics involved, Let’s break down the key reasons:
Objective and Desired Outcome:
Conversion Ads: When you run a Facebook ad campaign with the objective of driving specific actions, such as making a purchase, signing up, or filling out a form, you are aiming for a high-intent audience. Users who take these actions are more valuable to your business, and thus, the cost to reach and convert them is generally higher.
Brand Awareness Ads: In contrast, ads designed for brand awareness focus on reaching a broad audience to increase visibility and familiarity with your brand. The desired outcome is not an immediate action but rather building a presence in users' minds. This can lead to lower costs since the goal is engagement rather than an immediate conversion
Competition and Demand:
Navigate to Facebook Ad Library and compare your ads to your competitors.
Conversion Ads: When running ads with conversion objectives, you're likely competing with other businesses that are targeting the same high-intent audience. These users are closer to making a purchasing decision, leading to higher competition and potentially higher bid amounts in the ad auction.
Brand Awareness Ads: Ads aiming for brand awareness often target a wider audience, which might include users who are not actively in the market to make a purchase. This broader targeting can result in lower competition and lower Facebook advertising cost in 2023, as the focus is on visibility rather than immediate conversion.
Audience Targeting:
Conversion Ads: Conversion-focused campaigns often target users who have demonstrated some level of interest in your product or service, such as those who have visited your website or interacted with your brand. These users are more likely to convert, but targeting this audience can be more competitive and expensive.
Brand Awareness Ads: Brand awareness campaigns can cast a wider net by targeting a larger and potentially less competitive audience. Since the primary goal is to create familiarity with your brand, the targeting can be broader, which may lead to lower costs.
Measurement and Attribution:
Conversion Ads: Measuring the success of conversion campaigns is often more precise, as you can directly track the actions users take after clicking on your ad. However, this also means the cost to achieve each conversion is more transparent, and competition for those conversions can be fierce. Thus, leading to a higher Facebook advertising cost in 2023.
Brand Awareness Ads: Measuring the impact of brand awareness campaigns is less straightforward. Metrics like reach, impressions, and engagement provide insights into visibility and engagement, but they might not directly correlate with immediate revenue. This can lead to more flexibility in bidding and potentially lower costs.
Overall, the cost difference between a Facebook ad built for conversions and one built for brand awareness stems from the level of audience intent, competition, targeting, measurement, and the desired outcomes. Conversion-focused ads tend to have higher costs due to the direct focus on driving actions, whereas brand awareness ads prioritize visibility and engagement, potentially resulting in lower costs.
C) Geographical Location:
With Facebook ads, you can focus on a specific geographical location.
Advertising costs can vary greatly depending on the geographic area you're targeting. For instance, advertising to users in a small town might be cheaper than targeting users in a major city. The larger the area you want your ad to cover, the more likely it is that your overall costs will increase.
Also, different regions and cities can have varying levels of demand, competition, economic conditions, and user behaviours, which in turn influence the cost of advertising. Here's how geographical location impacts Facebook ad costs:
Market Demand and Competition:
High-Demand Areas: Advertising in densely populated or economically prosperous areas with high consumer demand can lead to higher ad costs. These areas often have more businesses competing for the same audience, driving up the cost of ad placements.
Low-Demand Areas: Advertising in less populated or economically less developed areas may have lower demand and less competition. This can result in lower ad costs due to a smaller number of advertisers bidding for placements.
Economic Factors:
Income Levels: Targeting areas with higher average incomes might lead to higher ad costs, as advertisers are willing to pay more to reach consumers with greater purchasing power.
Cost of Living: Regions with a higher cost of living could also have higher Facebook advertising cost in 2023, as businesses may need to generate higher returns to cover their expenses.
User Behaviour and Engagement:
Do you own a restaurant? Tap into different geographic regions based on cuisine preferences
Cultural Differences: Users in different geographic regions might have varying preferences, interests, and behaviours. Advertisers targeting specific cultural nuances might see varying levels of engagement, which can impact ad costs.
Mobile vs. Desktop Usage: Geographic location can influence device preferences. For instance, if an area has a higher mobile usage rate, ads optimized for mobile might perform better, affecting costs.
Local Events and Seasons:
Local Events: Major local events, festivals, or holidays can lead to changes in consumer behaviour and higher demand for certain products or services. Advertisers targeting these events might experience fluctuations in costs
Seasonal Changes: Different regions experience seasons differently, which can affect consumer needs and purchasing patterns. Advertisers should adapt their strategies to account for these variations.
Overall, geographical location remains a crucial factor influencing Facebook ad cost in 2023. Advertisers need to carefully consider the unique characteristics of their target regions and adjust their strategies accordingly to optimize their ad performance and budget allocation.
4. What Can We Expect in 2024?
Predicting Facebook advertising costs for 2024 with certainty is challenging, as advertising costs can be influenced by a multitude of factors that are difficult to accurately predict. However, we can make some general observations based on historical trends and potential influencing factors. Continue reading to learn more:
Historical Trends:
Hootsuite does a great job of providing historical data. For instance, in 2021, the cost per click was low and then it increased as the year progressed. This is the general trend of Facebook advertising costs due to holiday shopping.
However, in 2020, during the pandemic, we saw a drastically low cost per click of $0.38 because advertisers were cancelling their ads campaigns due to economic downfall. For reference, consider this graph:
In 2020, the average CPC was $0.38. In 2021, it was $0.44.
Given these historical trends, we can expect the current cost of Facebook advertising to increase throughout the holidays (Thanksgiving, Christmas, & new years) and mellow out during the start of 2024.
Inflation and Economic Factors:
Advertising costs, like many other expenses, can be influenced by inflation and changes in the overall economic landscape. If the economy experiences inflation or other economic shifts, it could lead to increases in advertising costs.
Platform Changes:
Facebook regularly updates its algorithms, features, and advertising options. These changes can impact the competition for ad placements and the effectiveness of campaigns. Major updates in 2024 could potentially affect advertising costs.
Industry Trends:
Certain industries may experience shifts in demand for advertising, which can influence Facebook advertising cost in 2023 and 2024. Industries that have traditionally been more competitive in terms of advertising, such as home & garden, internet & telecom, and finance, may continue to have higher costs, while others remain more affordable.
If you are planning an advertising campaign for 2024, consider historical trends, but also be prepared to adapt your strategy based on real-time data and emerging trends as the year unfolds. We recommend that you regularly monitor your platform and industry reports.
Relevantly - Facebook Advertising Specialists
Beginning your own marketing plan can be difficult, especially on Facebook where there are billions of monthly active users.
As a business owner, you already have a lot on your plate and you may not have the time to create and monitor various Facebook Ads when you are already regularly engaging with your customers online.
To ensure you are making the most of your time and money, work with a professional marketing company such as Relevantly.
At Relevantly, we specialize in Facebook marketing and we would love to help you with your marketing plan.
By working with Relevantly, your Facebook ads will be optimized and maintained to ensure a positive return on investment.
We have over 15 years of marketing experience and our team has helped several companies and organizations across Ontario, Canada, and North America expand their brand.
If you are seriously considering advertising your business on Facebook but you do not know where to start, contact us today! We are here to help.
