Facebook ads have an average cost per click of $0.65, while $9.88 is the average CPM.  Read on for other Facebook ads cost benchmarks and learn how to optimize your return on ad spend.

Understanding the average cost, metrics, and factors influencing Facebook advertising (Meta) is crucial for optimizing your ad budget and maximizing return on ad spend (ROAS).

In this article, we’ll cover benchmarks for the most common pricing models and provide actionable tips on how to reduce advertising costs while simultaneously increasing results.

We’ve tapped Nicole Goodnough, lead strategist at HawkSEM, and Magnolia Deuell, our associate director of social media, for expert insights on Facebook ad costs.

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How much does an ad cost on Facebook?

Facebook ads cost $0.65 per click, on average. But your campaign results may vary depending on your industry, pricing model, and campaign objective.

To break down what you get for your money and really understand what your ads cost, you first need to understand Facebook Ads pricing models.

Cost-per-click (CPC) model

The first and most popular choice for Facebook ads pricing is cost-per-click (CPC). This model charges you for each click your ad receives.

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(Image: Revealbot screenshot)

According to Revealbot, the average Facebook CPCin June 2024 is $0.65. But keep in mind that this figure can vary widely depending on factors such as industry, target audience, and ad quality.

Cost-per-mille (CPM) model

The cost-per-mille (CPM) model charges you for every 1,000 impressions your ad receives. This pricing model typically works best when your goal is to raise brand awareness rather than generate leads.

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(Image: Revealbot screenshot)

Revealbot shows that the average Facebook CPM is $9.88. As you can see, this is much higher than the CPC model because it measures the cost of 1,000 impressions versus a single click.

Cost-per-lead (CPL) model

The cost-per-lead (CPL) model focuses on the cost of lead acquisition. It’s particularly effective for Facebook ad campaigns centered around lead generation and acquiring customer contact details.

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(Image: Revealbot screenshot)

According to Revealbot, the average Facebook CPL in June 2024 is $12.67. Again this is a more expensive pricing model. This pricing model is the most expensive, but it also reflects the most value (a lead compared to a click or an impression).

What factors affect Facebook ad costs?

The average costs for the pricing models above are just that: averages. Factors like competition, objective, and audience may increase or decrease your ad costs.

For more insight into what to expect from your Facebook ads, let’s take a closer look at the elements that cause variations in prices.

1. Auctions and bidding

Facebook uses an auction system to decide which ads get placements. Basically, you and a bunch of other advertisers who target the same audience compete for the same spot.

The auction process focuses on bidding (how much you want to pay for said spot). But the algorithm also takes into account things like ad quality and estimated action rates to choose which ad will be shown. Your bidding strategy and the bid amount you set directly impact your ad costs.

2. Campaign objective

Facebook ads has six options for campaign objectives. As a general rule, top-of-funnel objectives cost less, while bottom-of-funnel objectives cost more.

For example, you can typically get the least expensive results by using top-of-funnel objectives like awareness to target reach or impressions. But if you need the campaign to convert customers or generate revenue, you’ll need to choose a pricier objective like sales — and budget accordingly.

Deuell does have a warning about some campaign objectives. “Low-funnel objectives that ask a user to take action should be spared for audiences who are already brand aware. You should not be asking a net new prospect for information exchange or to purchase a product upon the first touch.”

“Focus on relationship building before you ask a user to give their first-party data up,” she says, “Users are hyper-aware of privacy and will only connect with brands they trust.”

3. Audience targeting

How specific your target audience is also affects the cost of your Facebook ads. Highly competitive or broad audience segments will result in higher costs. You have greater competition vying for the attention of those users, so bids quickly get expensive.

In contrast, more refined targeting can help increase ad relevance and potentially reduce costs. Retargeting audiences can be particularly effective for lowering costs while delivering relevant ads.

4. Ad quality and relevance

Facebook aims to serve relevant ads  to provide a pleasant user experience. As such, it rewards relevant, engaging, and valuable ads with lower costs.

Relevance scores range from 1 to 10. A higher relevance score indicates better ad performance and can potentially reduce your Facebook advertising costs.

Designing high-quality ad creatives and writing compelling copy has a positive effect on both Facebook users and Facebook’s algorithm.

5. Ad placement

Different ad placements, such as the news feed, reels, or audience network, may have varying levels of competition and user engagement, which can affect pricing. If you test and optimize ad placements, you can find the most cost-effective options for your campaign.

An easy way to start testing this element is to select the Advantage+ placements option when creating an ad set. Then, use a placement-level breakdown to see which one drives the best results at the lowest cost.

6. Competition

As with other digital marketing platforms like Google Ads and TikTok, competition is the single biggest factor to affect pricing. When there are many competitors in the space, they vie for the target audience’s attention and set their bids and budgets higher and higher. In the end, average CPCs rise and cost per acquisition increases with it.

“As most Meta buying objectives are auction based, the primary factor that indicates auction cost is competition,” explains Deuell. “Things like audience and time of year will definitely have implications on all costs, especially CPM.”

7. Seasonality and demand

Certain times of the year or specific events can impact the demand for ad space. Increased competition during peak seasons or popular events can lead to higher ad costs. Consider timing in advance so you can adjust your budget and bidding strategy accordingly.

Deuell shares that in the ecommerce space, she sees a huge increase in CPMs during Q4 (specifically around cyber week) vs. Q1, where she sees huge CPM efficiencies.

8. Many ad types and formats

Meta offers a variety of ad types and formats. You can run carousel, image, video, and collection ads to showcase your product or service to your audience. You can also run ads in the stories and reels feed.

The optimal format for your ad depends on many factors, including the audience and the objective. To find the best format for your purposes, run an A/B test to compare two or more creatives.

Then, spend the rest of your campaign budget on the top-performing format. Use the results to guide the formats you choose for future ads, too.

How to reduce your Facebook ads cost

Once your Facebook ads are up and running, you don’t want to leave them to stagnate. Even if you already have your costs under control and within your budget, there may still be additional ways to optimize your ads to reduce spending.

Here are a few things you can review.

Select the right campaign objective

Choosing the appropriate campaign objective is crucial for optimizing your ad cost. Align your objectives with your overall marketing goals to ensure your budget is allocated effectively.

Monitor engagement and budget

Never set and forget Facebook ads. Goodnough cautions, “Always keep an eye on your campaigns.” She explains that ads and audiences that generate early engagement may end up with a disproportionate amount of ad spend.

“Meta can start dumping all the daily budget there instead of distributing more evenly while campaigns learn and stabilize,” Goodnough says. “But the earliest engagement isn’t necessarily the best, so keeping an eye on where spend is being allotted will help keep costs under control.”

Narrow your audience targeting

By narrowing down your target audience, you can increase the relevance of your ads and minimize costs. Leverage Facebook’s robust targeting options to refine your audience based on demographics, interests, behaviors, and past interactions.

Run retargeting campaigns

Retargeting campaigns give you a powerful way to reach users who have previously engaged with your brand. By serving ads to a warm audience, you can increase conversions and lower costs, as these users are already familiar with your products or services.

Experiment with automated settings

Keeping Facebook advertising costs low often requires manual settings. However, experimenting with the platform’s automated and AI-powered settings can simplify the process without compromising results.

“Review historical data to see when your target audience is online the most, compare that to costs throughout the week, and schedule accordingly,” recommends Goodough.

“Testing against Meta’s AI budgeting model (the platform may spend 20% or more on any given day, but will not spend more than the weekly budget over the course of seven days) will give us insight to which method works best for each account.”

Test every element

Goodnough recommends leaving no major campaign component untested. She recommends testing:

  • Placements
  • Targeting
  • Creatives
  • Messaging
  • Bid strategy
  • Optimization goals

“All these tests will help advertisers determine what resonates with their audience the best and what drives the most cost-effective results,” she explains.

Is $100 enough for Facebook ads?

A common question businesses have when approaching Facebook ads for the first time is how much budget they need. Initially, you may want to dip your toe in the water and see how things go.

Perhaps you want to start with a small budget of $100.bBut is that really enough?

Set realistic expectations

Over what time frame do you plan on spending the $100? A daily budget of that size could allow you to reach a large audience.

A week or a month, however, would be a different story. The budget would be stretched thin, and it wouldn’t be adequate for achieving your goals.

With a limited budget, focusing on specific goals and prioritizing targeting options yielding the best results is crucial.

Allocating the budget strategically can still generate meaningful outcomes and provide valuable insights. But in general, you will want to allocate a larger budget to see more notable results.

Align your budget with your goals

If you’re serious about making Facebook ads work for your business, consider allocating a larger budget. Goodnough recommends starting with a monthly budget of at least $5,000.

“Budget for new advertisers really depends on the industry, size of the business, and average order value or customer lifetime value,” she explains.

“A good place to start for most brands is at least $5,000 per month. Though if you have multiple services or lines of business or store locations, you likely need to start with a higher budget.”

How do Facebook ads compare to other ad platforms?

When considering your advertising options, it’s important to understand how Facebook ads stack up against other ad types and social media platforms like TikTok.

Reach and user base

Facebook boasts an enormous user base, with over 3.07 billion monthly active users as of 2024. This vast reach provides an unmatched opportunity to connect with a huge audience and target specific demographics, interests, and behaviors.

Targeting capabilities

Facebook’s robust targeting options allow you to hone in on specific audiences with precision. You can target users based on demographics, interests, and behaviors. You can even retarget those who have engaged with your brand previously.

It’s very easy to build custom audiences to fit your target market. This level of granularity sets Facebook apart from many other advertising platforms.

Cost-effective

Facebook ads offer a range of pricing models, so you can choose the model that aligns best with your campaign goals. With careful planning and optimization, Facebook ads can be cost-effective, particularly when compared to traditional advertising methods such as TV or print ads.

Performance metrics and optimization

Facebook provides comprehensive performance metrics and robust optimization options that will help you carefully measure your results and continue to improve your campaigns. You can track key metrics like impressions, clicks, conversions, and engagement.

Integration with Instagram and audience network

Facebook is part of Meta, which is also the parent company of Instagram. That means you can access both Facebook and Instagram ads under Facebook ads manager. Additionally, Facebook’s Audience Network allows you to display your ads on third-party websites and apps, further expanding your ad’s reach.

Competition from other social ads

While Facebook remains a dominant force in the social media marketing landscape, it faces competition from platforms like Instagram, Twitter, LinkedIn, and Pinterest. Each platform has its own unique strengths and audience demographics. Understanding your target audience and their preferences can help you identify the most effective platforms for your specific advertising goals.

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How to tell if Facebook ads are a good investment for your business

To decide whether Facebook ads are a worthwhile investment for your business you need to carefully evaluate a few factors.

Deuell has provided some insights on this. “Having clearly defined business objectives that align with marketing and channel goals is very important when deciding where you want to invest your advertising spend,” she says.

“Because Meta can drive upper-funnel brand awareness and also low-funnel conversion efforts, it’s important to set clear expectations so you are maximizing your ROI.”

She gives this example, “If you have no other awareness efforts, but you know paid search converts your customers, maybe the opportunity for Meta is to drive awareness (i.e., search volume).”

Goodnough shares a similar sentiment.

Advertisers should focus on Meta ads when they’re launching a new business or product or service and need to drive awareness and conversions at the same time, want to zero in on specific demographics and geos, build engagement and grow their community, or have access to strong visual content.”

However, she cautions, “Ideally, advertisers shouldn’t prioritize one channel (e.g., Facebook) over another, but focus on leveraging multiple channels to drive overall business goals.”

Here are some key indicators to help you establish if Facebook ads will be a good choice for your business.

Define your advertising objectives

Clearly define your goals before investing in Facebook marketing. What do you want to get out of your ads? Increased brand awareness, more website traffic, more leads? Align your objectives with the capabilities of Facebook’s ad platform to help you understand if it’s the right fit for your business.

Know your target audience

There is no point in running Facebook ads if your audience doesn’t spend time on Facebook. Evaluate whether your audience aligns with the demographics, interests, and behaviors that Facebook can effectively reach and engage with.

Consider your industry

Do some research into how your industry performs in the Facebook advertising ecosystem. Some industries may naturally fare better on Facebook due to its broad user base and targeting capabilities. Research your competitor’s presence and ad performance to get an idea of the potential impact your Facebook ads could have.

Analyze cost and ROI

Assess the cost-effectiveness of Facebook ads based on your budget and expected return on investment (ROI), not vanity metrics like video views.

Consider the lifetime value of your customers, expected conversion rates, and average order value to estimate the potential ROI.

Compare the costs of Facebook ads to other advertising channels to see if it is a good place to allocate some of your marketing budget.

Monitor competition and ad performance

Get sneaky and spy on your competitor’s ads. Review how your competitors are leveraging Facebook ads and monitor their ad performance.

Analyze their messaging, targeting strategies, and engagement levels to gauge if Facebook ads are driving meaningful results for businesses similar to yours.

Review key metrics like click-through rate (CTR), cost per action (CPA), CPC, and link clicks, and plan your marketing strategy based on the results.

The takeaway

Facebook ads hold immense potential for marketers who want to reach and engage their target audience.

By understanding the factors that influence Facebook ad costs, such as bidding strategies, audience targeting, and ad quality, you can optimize your campaigns for maximum results.

Remember, each business is unique, and what works for one may not work for another. Experimentation, testing, and continuous refinement are key to finding the right approach and unlocking the true potential of Facebook advertising for your business.

However, you don’t have to go it alone. An experienced agency like HawkSEM can work with you to optimize campaigns, analyze results, and reach key advertising goals. Contact us today for a free Facebook ads consultation.

This article has been updated and was originally published in July 2023.

Anna Sonnenberg

Anna Sonnenberg

Anna Sonnenberg is a writer for B2B SaaS companies. She specializes in product-led and strategic content for marketing technology, sales automation, and productivity tools.