How Much Do Facebook Ads Cost in 2024?

What is the real cost to advertise on Facebook in 2024? Advertising on the world’s most popular social network can do wonders for your business — but can also drain your marketing budget. 

Keep reading to learn everything that affects your ad costs, how much others are spending, and what you can do to make the most of every advertising dollar.

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What Determines Facebook Ads Costs?

Having a solid understanding of how much advertising on Facebook will cost begins with understanding the ad process itself. Additionally, understanding the process helps frame how you can modify campaigns to maximize your spending.

‍Facebook uses an auction-based advertising method that is similar to other paid ad platforms. You’ll begin the ad process by:

Logging into the Ad Manager to create a campaign and at least one ad for that campaign

1. Choose your daily budget, which is the most you want to spend on the ad daily.
2. Select the specific action you’ll pay for, which can be:

1. Likes
2. Views
3. Clicks
4. Downloads

1. You’ll then build your audience based on demographics, interests, and target devices.
2. Now you’ll start adding your creatives, such as ad copy, images, or videos
3. You’re now ready to launch the ad and start incurring costs

You may notice none of the above steps seem like an auction. This is because the actual action runs in the background once the ad is live. 

Understand the Facebook Auction Algorithm

So what’s the actual auction look like? Facebook’s auctioning process includes the following:

Facebook will grade your ad’s bid, estimated action rates (such as downloading or liking), and the quality of the ad

• Ad quality and action rates will also determine the relevance
• Using the above factors, Facebook generates the ad’s total value
• Facebook will then deliver an ad with the highest total value to the user

So what does this mean in practice? You can maximize how much you spend by:

Improving the relevance of your ad

• Enhancing overall quality
• Choosing the correct action for your goals
• Increasing your ad bid

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A common misconception is you just need to increase your daily budget to win ad placement, but now we can see that working on other factors can also help get your ad in front of Facebook users. Additionally, understanding Facebook Ad benchmarks help you make sure you aren’t paying too much — or too little.

Varos helps you quickly understand if your return on ad spend (ROAS) is higher or lower than your peers. Understanding this metric in context can help you make the most of your marketing budget.

Facebook Advertising Cost Benchmarks

Understanding what other companies spend for specific metrics helps you better understand what your Facebook Ads should realistically cost. Some overall benchmarks for specific metrics are:

• Cost-per-click (CPC): $0.97
• Cost-per-thousand impressions (CPM): $7.19
• Cost-per-like (CPL): $1.07
• Cost-per-download (CPA): $5.47

However, be aware that these benchmarks are for every advertiser on the platform and are not specific to any industry. That means results from a company with low-cost beauty products and a luxury real estate company are combined — and that’s not an accurate reflection of your industry.

Unfortunately, gauging your competitors' spending on Facebook advertising is challenging. That’s why we developed Varos to provide up-to-date benchmarks specific to your industry.  

Frequently monitoring Facebook Ads benchmarks allows you to maximize your ROI to drive real growth for your business without spending more than necessary. Below, you can see how our dashboard compares your spending to your competitors:

Factors Influencing the Cost of Facebook Ads

Now that you understand the overall process, it’s easy to see why Facebook Ads pricing is challenging to determine ahead of time. This is because your actual costs are based not only on the specific analysis of your ad but also on what your competitors are doing.

So let's dive more into the specific factors that will influence your costs so you can start maximizing every dollar spent by refining your specific campaigns.

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Audience Targeting

Who are you trying to reach? Your audience targeting will significantly affect your cost, as reaching specific audiences generally increases your CPC. 

At first glance, it seems like a broad audience is preferred since each click will cost less, but you need to remember what happens after the click — will they convert? 

Honing on the right audience that is likely to become a customer, or at least begin the customer journey, will ultimately improve the effectiveness of your ads, even if every click is more expensive. 

Your audience targeting involves:

• Age
• Gender
• Location
• Interests

The top three are straightforward to understand, but ‘Interests’ is widely misunderstood by users and advertisers.

Choosing the right interests is a vital element of your audience targeting. Unfortunately, many Facebook users don’t know the platform has a frequently updated list of what types of content they engage with. Therefore, you aren’t relying on what the user selects as an interest but on what Facebook determines the user is interested in.

Select interest both directly and indirectly related to your product or service to reach the most people with the potential to become customers.

Bidding Strategy

The Facebook Ads cost calculator available when setting up your ads estimates your costs primarily based on your bidding strategy. 

Earlier, we described how your overall budget determines when your ad is displayed. While true, it’s more complex than it seems at first glance — there are three specific bidding strategies that specify how your budget is spent:

1. Budget-based bidding: This type of bidding strategy allows you to select two options to meet your specific budget and goals:

1. Lowest cost: The auction process will attempt to earn lower-cost conversions based on other aspects of your camping (such as objective).
2. Highest value: You’ll spend more on conversions but focus on winning higher-ticket actions that result in valuable leads.

1. Goal-based bidding: This strategy focuses on what you earn from your ad spend and focuses on improving your ROAS:

1. Cost cap: This is a sustainable way to have predictable monthly spending. Costs will still vary, but you can set a cap on your budget, and the Ads Manager will maximize those costs while bidding.
2. Minimum ROAS: This aggressive strategy allows you to set your return percentage, such as 130% ROAS, and Ads Manager optimizes your bids to reach that percentage. Be aware that this is not a guarantee you’ll reach the specified ROAS, making this a high-risk/high rewards strategy.

1. Manual bidding: Just like it sounds, this type of bidding lets you set a maximum bid for each ad auction. Facebook attempts to still give you the lowest costs but will go up to your maximum to win the auction. You can get excellent results with this method, but you should be experienced with managing paid ads.

Ad Format

Your specific ad format doesn’t necessarily make your campaign cost more; however, choosing the proper ad format for the campaign is essential to making the most of your ad spend.

Formats include:

• Text
• Video
• Image
• Carousel

For example, a video ad doesn’t inherently cost more than a text ad, but if your campaign is better suited for text, you’ll spend more with a video since it’s a less effective format.

So what does this mean? Understanding your industry and audience is essential to crafting the right ads. You’ll also likely need to do some experimenting of your own to see which formats work best for your business. Over time, you’ll learn which formats work best for your different campaigns to make the most out of your ad spend.

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Campaign Objective

One of the most crucial factors of your campaign is the specific objective for both determining costs and getting the most value out of your ad spend. There are five categories to consider:

1. Impressions
2. Reach
3. Lead Generation
4. Conversions
5. Link Clicks

Each objective has specific CPC costs that can range dramatically, making the objective the greatest factor in determining your costs. Carefully evaluate your current business goals to determine the right choice for your needs.

Below, you can see how Varos sheds light on your CPC alongside your peers. If they’re spending less, they’re possibly using different campaigns and may be getting the same or better results. 

Conversions, Engagement, and Quality

We talked about how Facebook analyzes the quality of your ad when determining when it should be displayed. What exactly does that entail?

• Quality Ranking: Unfortunately, Facebook is ambiguous about exactly how they determine your ad’s quality. Yet, most marketers consider the quality ranking based mainly on how relevant the ad is to the target audience. For example, if you selected an audience interested in exercising but you’re selling wine, you’ll likely have a lower quality ranking. 
• Conversions: The Ads Manager wants to prioritize people clicking on ads that generate revenue for advertisers. So if your ad is converting, Facebook assumes it’s a higher quality ad and will be more likely to display it. 
• Engagement: How many people saw your ad versus how many people interacted with it somehow? Facebook values higher engagement, especially in relation to your competitors. Other ads with the same audience and goal will be compared to your engagement.

You can see how this category depends on having an accurately defined audience and compelling ads. It may take some trial and error, but keep improving both to increase the ROI on your Facebook Ads.

Competition Bids

You have plenty of say in the above factors to maximize your costs, but you can’t control what your competition is willing to spend to win the bid. The advertiser willing to spend the most will likely win the spot.

However, even a brand-new small business has a chance to compete with Facebook Ads. The key is strategically planning your ads, selecting the right audiences, objectives, and creating compelling ads that differentiate you from the competition. 

This is why it’s essential to have a strong understanding of your audience, competition, and what makes your business unique.

Varos is designed to help you have more data about your peers to guide your decisions. For example, you can see how our dashboard chooses your cost per purchase right alongside your peers. If you’re paying too much or too little, you might be able to make some changes to grow your business better.

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Team Up with Varos for Real-Time Benchmarking to Optimizing Facebook Ad Costs

Facebook Ad costs can vary depending on a range of factors, including specific attributes of your ads like quality and relevance, but also extend to your industry. Unfortunately, there’s no simple formula for determining your Facebook Ad costs, so understanding KPIs from your peers can help guide your spending.

Varos is a unique platform designed to give you real-time benchmarks to provide more data to drive your marketing decisions. Knowing your competitors' spending and the results they’re achieving helps you react strategically. 

Below, you can see how our Facebook Ad overview breaks down all the essential metrics:

Are you ready to step up your Facebook Ad effectiveness by unlocking real-time competitor benchmarking? Get started or book a demo today to begin.

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About the Author

Yarden Shaked

Co-founder & CEO at Varos

LinkedIn