How Much Do Facebook Ads Cost? Are They Worth It?

How Much Do Facebook Ads Cost? Are They Worth It? | Disruptive Advertising
September 14, 2016 By Social Media

How much do Facebook ads cost? Are they worth it? Should I try advertising on Facebook?

If you’ve ever asked yourself these questions, you’re not alone.

Over the last few years, Facebook has finally evolved into an effective marketing platform and businesses are starting to take notice.

Since you’re reading this article, some part of you is probably hoping that Facebook will be a breakout opportunity for your business—the ads will be cheaper and the results will be better.

Well, I’ve got good news for you. Facebook is an incredibly powerful and affordable way to promote your business online.

How Much Do Facebook Ads Cost?

Let’s take a look at what you can expect to pay for Facebook ads. AdEspresso runs a regular quarterly report on the cost of Facebook ads that has some great data.

For example, here is what the average cost-per-click (CPC) for different campaign objectives breaks down: facebook-ads-cost-cpc-objective-2016-q2-004

Overall, the average click on a Facebook ad costs around $0.27. 1000 impressions will cost you on average about $5.95.

But really, CPC data doesn’t tell you a whole lot about the value of Facebook advertising.

Are those clicks turning into conversions? Are those conversions turning into sales? What sort of return-on-ad-spend (ROAS) can you expect from Facebook ads?

It doesn’t matter how cheap your clicks are if they don’t produce profitable revenue for your business.

throwing-money-away

That’s why people still use Google AdWords, even though the average click on AdWords costs $2.32 and some clicks cost around $200!

When it comes to online marketing, profit matters more than cost.

With that in mind, here’s what you can—in our experience—expect to pay for the right clicks on Facebook:

A lot depends on whether you are advertising to people (B2C) or businesses (B2B):

  • B2C: $.90 CPC
  • B2B: $3.00 CPC

Of course, these are just averages, your actual CPC could easily be much higher or much lower than these numbers. But, these values are a good rule of thumb you can use to estimate whether or not Facebook ads are worth trying.

For example, if you have a fairly average conversion rate—say 3% for B2C or 1% for B2B—here’s what your cost-per-conversion will probably look like:

  • B2C: $30 per conversion
  • B2B: $300 per conversion

Now we’re getting somewhere!

If a potential cost-per-conversion (typically a sale or lead) of $30 or $300 makes you salivate, Facebook advertising is probably a great fit for your business. If that seems outrageously high, Facebook’s probably not for you.

Are Facebook Ads Worth It?

When you get right down to it, though, even a great cost-per-conversion doesn’t mean a Facebook campaign will be worth the money.

To determine that, you really need to know what your expected return-on-ad-spend will be.

For example, here are some results from a client of ours:

facebook-cost-1

Can you tell if this campaign is profitable? They’ve certainly spent a lot of money.

What you can’t see in this report is the fact that this client receives $4.75 of revenue for every $1.00 they spend on their Facebook ads.

In general, if you get more than $4.00 in revenue for every $1.00 you spend on advertising, that’s a pretty profitable campaign.

But what about this campaign?

How Much Do Facebook Ads Cost? CPC vs ROI 2 | Disruptive Advertising

The CPC is more than double the last company’s CPC—surely their return-on-investment must be worse!

Nope. This particular company makes $8.25 for every $1.00 they spend on Facebook.

In fact, despite having a CPC that is over 2x higher than the first company’s CPC, their campaigns are nearly twice as profitable.

See what I mean?

Although Facebook’s cost-per-click is cheaper than many other online advertising platforms, deciding whether or not Facebook is right for your business is less about CPC than it is about ROI.

Should I Try Advertising On Facebook?

The good news is, Facebook doesn’t just deliver cheap clicks. The examples I just gave are fairly typical for our clients.

Yes, the CPC is lower, but if you set up your campaigns right, your campaigns will drive high-quality clicks that produce value for your business.

As a result, Facebook ads are often a much more profitable way to market your business than other advertising channels.

For example, we recently tried Facebook ads with a client of ours who had been using Google AdWords for some time. Their AdWords campaigns had been performing well enough, but we wondered if Facebook would be a good way to reach a different, larger audience.

The results were astounding.

Facebook Ads Cost (AdWords vs Facebook) | Disruptive Advertising

As expected, the CPC was lower (70% lower), but it turned out that the Facebook ads outperformed our AdWords ads in every way.

  • The clickthrough rate was 20% higher.
  • The conversion rate was 70% higher.
  • Most importantly, the cost-per-conversion was 77% lower.

Overall, these campaigns produced a 4.35x better ROI than our AdWords ads—Facebook ads were an unqualified success!

At Disruptive, we often see results like these when we try Facebook ads with our clients. So, if you’re wondering whether or not Facebook ads are just a way for Zuckerberg to line his pockets—rest assured, they really do work!

And, because the CPC is often quite low, you don’t have to spend all that much to see if they will work for your business.

 

Conclusion

When you get right down to it, advertising on Facebook isn’t about cost—it’s about profitability.

That being said, for most businesses, running a Facebook campaign makes a ton of sense. You can get high-quality clicks, conversions and sales without paying through the nose for them.

By the way, if you’re considering Facebook advertising, let me know here or in the comments! I’d be happy to review your business needs and help you decide whether or not Facebook is a good fit for you.

What do you think of Facebook ads? Are they a good investment or a waste of money?

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Saunder Schroeder

VP of Paid Social
Saunder is passionate about growing brands through digital marketing, and has done so for Fortune 50 to startup companies. He’s a legend in his own mind, and is obsessed with his family (wife + baby girl), football and sweet potato fries.

13 Comments

  • I’m developing my online fitness programs and I’m interested in using Facebook as a platform to advertise on

    • Saunder Schroeder says:

      Hey Orenzo—we’d love to connect and learn more about your online fitness program! I’ll have one of our Strategists reach out to you, as I’m pretty booked up this week.

  • Hussain says:

    Nice article

  • Crystal says:

    If I’m looking to simply spread the word about a homeschool coop is Fb a good place to start or Google?

    • Saunder Schroeder says:

      I’m not sure what the search volume would look like for keywords like “Homeschool coop” in your geographic region, but I would definitely test out some keywords like that. I do think Facebook Ads would be a more affordable option by targeting Homeschool interests. If you’re able to, I would start by testing both channels.

  • Kathleen Watson says:

    My fiction novel is coming out next month. Would Facebook be a good place to sell it?
    Kathleen
    facebook.com/Ladykanddj77/

    • Saunder Schroeder says:

      I definitely would think so. A lot of the success would depend on your following and making a compelling ad.

  • Piotr says:

    Hi mate. I developed board game and will start campaign on Kickstarter soon. Should I use FB to link advert to the KS campaign? I’ve got fairly low budget and I can;t find how CPC rate…

  • For my business, facebook advertising is effective. I have a low budget and Facebook is most affodable and effective advertising method. Conversion rate and profit is high with facebook ads when compared with adwords in my experience

  • Eleen says:

    I am running home yoga business and have been boosting my FB business posts and receiving few new Liked. No conversion yet so far after trying 4 different posts. Should I continue boosting posts to get my name out or any better way to do this? Thank you.

  • Great…!! that’s great advice good work, I read and also saw your every post, nice artical very usefull your post Thank you so much for sharing this and the information provide. Auto Insurance Quotes PA

  • Guy says:

    Does it work also on restaurant/bistro/cafe?

  • im looking to advertise my cnc machineshop is facebook worth it

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