What is the cost of Facebook Ads? An overview (with examples)

Back in 2018, Mark Zuckerberg was faced with a severe challenge that threatened to bring an end to Facebook. He was summoned to testify before the U.S. Congress following the Cambridge Analytica scandal. Although much has changed since then, that moment started a new era in social media advertising. Despite the challenges, Facebook has managed to outlast and thrive, with the platform’s advertising costs skyrocketing over the years.

In 2021 alone, Facebook registered more than $114 billion in ad revenue, showing that interest in advertising is growing (just one year before, they had $84 billion).

Despite all the dishonors, Facebook Ads is one of the most profitable platforms to monetize your digital marketing funnel.

How much does running ads on Facebook cost – and how can you spend less in 2024?

Here’s what you need to know.

How does the Facebook ad auction work?

Facebook Ads is a pay-per-click (PPC) advertising platform. The ads you see on Facebook result from a bidding process known as an “ad auction,” which occurs when someone bids for a specific target audience.

In this ad auction, advertisers contest to have their ads displayed by presenting bids based on how much they’re ready to spend on a campaign or earn a customer. The proposals are then weighed against other aspects, such as the audience the ad is targeting and the quality of the ad itself.

The higher an advertiser’s bid, the more probable their ad will appear on their target audience’s news feed or sidebar. It’s also likely for an advertiser to get a lower cost-per-click (CPC) if their ad has more increased quality and relevance. This is because Facebook rewards advertisers who make ads that provide a good user experience.

Facebook Ads also suggests options for optimizing campaigns, such as automatic bidding – where they automatically boost or lower bids to get adequate results and maximize campaign performance by concentrating on ad sets that are doing well. This type of Facebook automation ensures that advertisers get the most out of their campaigns and gain their desired audience.

By understanding how Facebook Ads work, advertisers can create effective ad campaigns and maximize their impact on their target customers. With its strong auction system, the platform offers a wonderful way to acquire potential customers and raise conversions.

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How much do Facebook Ads cost?

Facebook bills advertisers based on different metrics. The most familiar ones are cost per click (CPC), cost per mile (CPM), and cost per lead (CPL). CPC is the cost for every click your ad obtains, CPM is the cost per thousand impressions your ad acquires, and CPL is the cost for every lead generated through Facebook Ads.

Campaigns with larger advertising budgets are more effective since they have access to a broader range of features and options that can help them optimize their campaigns and get more traction.

Average CPC for Facebook Ads

The average CPC on Facebook is around $1. A variety of factors impact this number. In short, you should pay about $0.94 for every click or $12.07-$14 for 1,000 impressions you gain on your Facebook Ads.

Here’s how this translates in business terms:

If you’re selling a product that costs $50 and your conversion rate is 2.5 – 3% (average for eCommerce, for example), you’ll need to generate 33 – 40 clicks to get one sale.

At an average CPC of $1, that would need a budget of at least $33 – which signifies that the remainder of $17 will be your profit.

However, if your product costs less than $33, you might have to adjust your advertising strategy to increase the CPC to under $1. You can do this through different tactics, such as retargeting or A/B testing.

Average CPM for Facebook Ads

If you prefer to pay based on impressions, note that the average CPM for Facebook Ads is approximately $14.As in the case of CPC, CPM is sensitive to various factors.

This means that if you’re running a branding campaign intending to reach 500,000 people, then at an average CPM of $14, you’ll need a budget of $7,000.

Average cost per lead

According to Reports, the average Cost per Lead (CPL) in Facebook Ads is about $5. However, it is worth remembering that not all leads convert – so you should consider your average conversion rate (once potential buyers are officially marked as leads.)

The type of lead you’re aiming to generate will influence the cost per lead. For instance, a free trial or a demo submission will cost more than a newsletter subscription. Also, your industry and available target options will impact your CPL.

What determines your Facebook ad cost?

The cost of Facebook ads depends on various factors, including:

Ad budget

Facebook authorizes you to set a fixed ad budget to specify whether you acquire more people. Spending more money increases the potential audience size. However, when starting, you should test a small budget (and then scale accordingly).

Ad bid

Your bidding strategy will also impact how much your Facebook Ads cost. There are three primary bidding techniques in Facebook Ads:

  • Goal-based (pay per-result goal or pay by ROAS)
  • Spend-based (depending on the highest volume or the highest value)
  • Manual (where you put a manual cap on each bid rather than allow Facebook to cap your requests automatically, which is called automatic bidding)

Facebook’s system offers both goal-based and spend-based bidding, while manual bidding allows you to set your bids yourself.

Before selecting the suitable type of ad bid, it is crucial to have a robust marketing strategy and a comprehensive comprehension of the Facebook Ads algorithm. The algorithm assesses each bidder and ad based on three primary factors:

  • Bid: how much do you want to pay for each user interaction with your ads.
  • Evaluated auction rates: how conceivable it is that users will interact with your ads.
  • Ad quality and relevance: how closely does your ad align with user interests, how well does it resonate with them, and what is the perceived quality of the ad.

You win the bid if your ad comes out with a high score from this three-tiered assessment. Theoretically, an aggressive bid strategy will help you succeed – but it might also drive up your cost per conversion. 

Ideally, you want to find the perfect balance between these factors. A Facebook Ads specialist can help you optimize your bids.

Ad objective

The cost of your Facebook Ads will rely on the marketing goal you’ve set for your campaign: brand awareness, reach, traffic, app installs, link clicks, video views, and more. If you choose the wrong ad objective, you might spend more because the automated bidding process will match your goals.


When you bid on ad placement, you’re competing with businesses in your industry and companies in other sectors that target the same audience as you. Targeting an audience that many others are also targeting will increase the cost of your ads. Who your audience is, and your audience size will influence your ad spending.

Use custom audiences for each piece of your marketing funnel, and continually feed them with your business data (via social media and email platforms).

Ad Quality

Every Facebook ad with more than 500 impressions receives a relevance score, which indicates how your audience reacts to your ad. The higher the relevancy score, the more reasonable your ads will be.

To ensure your ads have a high relevance score, create content that resonates with your audience, use the right images, and include a clear call to action.

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Ad placement

If your ad placement is pushy, you will spend more for your ads. Think of it like real estate: houses in excellent neighborhoods are more expensive than those in less popular communities. Likewise, ad placements on Facebook with more visibility (like the News Feed) will be pricier than those in less visible areas.

Facebook allows different ad placements, such as on Instagram and the Audience Network, to maximize your reach and get more customers.


Your industry also influences your campaign costs. Industries like finance, legal services, B2B, customer service, and insurance tend to be more competitive, resulting in higher click-through rate (CTR) and CPC.


If everyone runs on beach vacations in July in a provided area, the accommodation and flight fares will rise. The same is true for ads: when many people are advertising in the same industry in a specific season, the cost of the ads will skyrocket. For instance, you might spend more on the same ad if you publish it around Black Friday than on a random day in June.

Time of day

Ads tend to be more expensive when people are most active on Facebook during peak times. Generally, the cheapest times of day to target are during nighttime, and the best period to schedule ads on Facebook is from Wednesday to Friday, from 8 to 9 am. 


Your location also influences how much you spend on your ads. If multiple advertisers bid on local ad space, the cost of those ads increases.

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Eight ways to reduce your Facebook ad cost

Facebook ads only make sense if they produce a reasonable cost per acquisition (CPA). Otherwise, you’re just wasting your marketing budget on a channel that could be more sustainable. Here are eight tips to reduce your Facebook ad cost:

  1. Choose the right campaign objective.

You will spend more and get less if you choose the wrong campaign objective. Here’s an example: if you’re advertising beauty products for women and want to set up a bottom-of-the-funnel campaign, there are better choices than choosing the reach objective because it will not necessarily drive sales.

Instead, choose more targeted objectives like conversions. This form, the automated Facebook bidding system, will comprehend how to utilize your advertising budget for more profitable results.

2. Narrow down your audience.

The bigger your audience is, the more businesses you’re contesting with. Limiting your audience is a fantastic way to reduce your Cost per Click (CPC).

To accomplish this, you must get as precise as attainable in the Audience Insights section of the Ads Manager. For instance, if you deal with beauty products for women, you could target explicit ads to specific groups of women (age, interests, type of skin as led by previous browsing history, etc.). This is more efficient than targeting all women in a country.

3. Lower your ad frequency score.

The more your ads appear in the same format on the platform, the less likely your users will engage with them. This is called ad fatigue, and it’s the cause you should reduce your ad frequency score.

If you see a low action rate on your ads, it’s time to change your ad creatives or messaging. So refresh your ads every few days or weeks, and test different designs and ad placements. This will also enable you to avoid ad exhaustion and increase your CTR.

4. A/B test ad creatives and placements

A/B testing (or multivariate testing) is critical to running any successful marketing or advertising campaign. You often don’t need to learn what works, and A/B testing allows you to compare different versions of your ads to optimize them.

Ensure you only modify one variable in your A/B testing variants. Otherwise, you won’t know which variable affected the outcome.

For instance, you can modify the ad content, creativity, or location (desktop or mobile), but only a few at once. You can also experiment with different bids and budgets. Doing so will give you a complete understanding of what is effective (and what is not).

5. Make your ads relevant.

There’s no point in running ads that aren’t relevant to your target audience. This will hurt your CTR and save you a lot of money in the ad bidding process (because your relevance score will be lower). Maintain your ads appropriately both in terms of content and in terms of targeting.

6. Run retargeting campaigns

Retargeting campaigns are an effective way to re-engage users who have interacted with your business somehow. This could be anything from visiting your website, liking your Facebook page, or filling out an online form.

Retargeting campaigns let you target those people who already understand and trust your business. As a result, it will get you more profitable conversions at lower costs than you’ll earn with cold traffic.

7. Improve the post-click experience.

The post-click experience is just as crucial as the pre-click one. If you lead people to a slow or inadequately designed website or landing page, they’ll almost immediately leave, which means a lower conversion rate and more expensive ads. So you must optimize the whole marketing funnel and confirm your user has a satisfactory experience from click to purchase.

8. Use lookalike audiences

Facebook lookalike audiences allow you to tap into audiences similar to those already purchased from you. This strategy is effective because Facebook selects a small group of current users (such as those who have already bought your product) and identifies other audiences with similar characteristics. Lookalike audiences are very useful for expanding your reach and promoting your brand. They can also help you find valuable leads more efficiently and at a lower cost, with minimal optimization required.


Facebook Ads is one of the most elevated ROI marketing channels out there. However, whether Facebook Ads is worth it depends on various factors – including your business model, bidding strategy, average click-through rates, engagement rates, and other metrics.

Advertising isn’t a magic wand. You can only invest money and expect a significant return on investment over time. While it’s generally a quicker way to acquire new customers (compared to organic channels), set the right expectations for your advertising efforts.

You must pursue ad optimization by constantly tinkering, adjusting, and re-strategizing to achieve a good ROI with Facebook Ads.

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