When marketers start using online advertising, they want to know how much their ads will cost. This is key to ensuring they remain within their budget. Unfortunately, there is no single price for Facebook ads; instead, costs depend on a variety of factors.

The good news is that ad prices, to an extent, are under your control. Beyond having the chance to set your budget, you can take steps to ensure you spend as little as possible while maximizing conversions.


Understanding the Bidding Process

The reason that the cost of ads varies so much (and the reason why you are able to set your own budget) is due to the bidding process. Like many types of digital ad campaigns, ads on Facebook run through an auction. Facebook uses the auction system to determine who will receive ad space, as there is a limit to how many ads can appear in each user’s newsfeed. When you create an ad, you can either set a bid or allow Facebook to determine a bid for you according to the budget of your campaign. You can change your bid at any time.

You will also decide when you pay for your ad by choosing a bidding option. One option is cost per click — as the name suggests, you only pay when a user clicks on your ad. For a lower expense, you can opt for cost per impressions — you pay a certain amount per 1,000 impressions. If your aim is to receive likes to your page, you should choose cost per like. Finally, if there is a specific action you want users to take, select cost per action. Although this is the most expensive, you will only pay when the ad contributes to your objective.


Other Factors Influencing Cost

Your budget is only one factor that will impact how much you pay for Facebook ads.

Your audience

Unlike other marketing tactics, your competitors are any brands trying to reach the same audience, rather than just other businesses offering similar products and services to your own. This is because you are competing for ad space on Facebook. You may be able to lower costs by creating a more specific audience, therefore decreasing your competition.

Beyond specifying demographics, Facebook allows you to narrow down your audience according to optimization options, which are divided into four categories. Facebook will recommend an option for your ad according to the bidding option you choose.

The first option is conversions. If you choose this, Facebook will present your ad to users who are most likely to take your desired action. This is determined by users’ past actions on the platform when interacting with ads. Other options are impressions (ideal if you are looking for maximum visibility), link clicks to your website, and daily unique reach (to deliver your ads to users no more than once per day).

The quality of your ad

Obviously, you want to create the best possible ads to resonate with your audience and increase conversions. The good news is, high-quality ads also cost less to run. To determine quality, Facebook assigns each ad a relevance score and measure click-through rate.

The ad relevance score is a numerical value between 1 and 10. It is calculated according to engagement with your ads, including comments, likes on your page or post, clicks to your website, and shares. The score increases every time a user interacts with your ad, but drops if a user asks Facebook to hide the ad. If your score rises, you will pay less.

Click-through rate is determined by clicks on your ad divided by number of impressions. As this also indicates quality, Facebook will use this data to lower or increase the price of your ad.


When events are taking place or holidays are just around the corner, more marketers look to advertise on Facebook. Expect to pay more at these times of the year to compete with others for ad space.


How to Reduce the Cost of Facebook Ads

Conduct split testing

Split testing does more than just improve the effectiveness of your ads — it also helps you to pay less for campaigns. Through split testing, you can check every element of your ad, one step at a time. As Facebook now allows you to divide your budget equally between an ad set, you will gain accurate results with split testing.

Start by creating two variations for text and two variations for images. To test all the possible combinations, you will need four different ads. Monitor which performs best and choose this for the following stage. Next, create four more ads, this time split testing the offer and landing page. If you continue the process, you will arrive at a higher ad relevance score and click-through rate and Facebook will keep charging you less.

Update your ads

Unfortunately, even the perfect ad will need to retire eventually. When you finish a campaign, begin again with entirely new ads. Continue to target the same audience, and even keep the same offer, but use different pictures and text.

Updating your ads will also help with maintaining a low frequency rating, which is particularly important if you are bidding per impression. If the frequency of your ads exceeds three, then the same users are seeing your ad without converting. Most users will convert the first time they see the ad — if they will convert at all. Some may wait until the second or even third time, but it is rare to receive conversions beyond this.

Target a different audience in each campaign

It is costly to target too wide an audience, not to mention ineffective. Create ads according to each of your buyer personas, delivering a targeted message through your ads.

In addition, you should create campaigns according to whether users are already familiar with your brand. Facebook has the option to select connection type when you run campaigns. For example, if you want to target new users, you can exclude those who like your page or deliver your ad just to friends of people who like your page. There are also many other targeting options to better focus your audience segments.

Determine an objective for your ads

Although you may want more likes to your page, more contact information from leads, and more conversions, it is a bad idea to try and achieve everything through a single ad. If you confuse users, they are more likely to ignore your ad. This will mean both your relevancy score and click-through rate will drop, increasing the price of your ad.

There are also other benefits to choosing a single goal for each ad — you’ll be able to create better ad copy, select a more appropriate bidding option, and define a more specific audience. All these are yet more ways to reduce ad prices. To ensure your ads allow you to achieve all your goals, create different sets of ads for each of your objectives.

When you bear all of the above in mind, it is easy to understand why the cost of Facebook ads vary. To make sure you pay a reasonable amount for your ads, monitor costs per action. Remember, it is just as important to ensure your ads lead to a positive ROI as it is to stay within your budget. Continue to make changes to your ads throughout the time you run your campaigns and you will optimize results.