Looking for an effective way to promote your business on social media? Running Facebook ads could be the answer.
Facebook ads help you gain more visibility for your content, drive traffic to your website and increase conversions. They can be tailored to your specific audience and business goals, and can deliver you quick results.
Another advantage of Facebook ads is their high return on investment. In fact, according to Statista, 41% of surveyed marketers claimed that Facebook gave them the best ROAS of any social media platform.
Now that we’ve explored the benefits of Facebook ads, you may be wondering how much it’s going to cost. We’ll break down all the costs for you in this post, including what influences the cost, and how you can save money during your campaign.
The Cost of Running Facebook Ads in Australia
The exact cost of running Facebook ads in Australia depends on the bidding model of your campaign. For example, whether you decide to pay per click, per download, per impression, or per engagement will impact the price.
On average, these are the prices you can expect:
- Cost-per-click (CPC): $1.61
- Cost-per-download (CPD): $9.66
- Cost-per-engagement (CPE): $0.23
- Cost-per-like (CPE): $13.34
- Cost-per-thousand-impressions (CPM): $22.22
CPC and CPM are the most popular bidding options. Although CPC has an attractive low cost, it can mean your business gets a lot of clicks without necessarily leading to any sales. CPM can have the same issue, as impressions don’t always lead to conversions either.
Factors Influencing the Price of Facebook Ads
There are many other factors that can influence the price of Facebook ads. Let’s explore them below.
1. Bid Amount
The bid amount refers to how much you're willing to pay to have your ad shown to your target audience. Facebook allows you to set manual bids or let the platform automatically optimise your bids. Higher bid amounts generally increase your chances of winning the ad auction but will also increase your overall costs.
2. Bid Strategy
Facebook offers different bidding strategies, such as Lowest Cost or Cost Cap, which directly affect your ad spend. The "Lowest Cost" strategy allows Facebook to spend your budget most efficiently, while "Cost Cap" ensures your costs do not exceed a specific amount. The choice of bidding strategy depends on your objectives, but selecting the wrong one could lead to unnecessarily high ad costs.
3. Target Audience
The broader your target audience, the more competitive your ad costs will be. Narrowing down your audience by using detailed demographics and interest-based targeting can lead to lower costs, but it can also reduce your reach. Striking the right balance is crucial to maximising your ad budget.
4. Industry
The industry you're advertising in can significantly impact your Facebook ad costs. Certain industries, like ecommerce, finance, real estate, and legal services, tend to be more expensive on Facebook due to high demand for audience attention. For example, an ecommerce brand might pay more during peak shopping seasons because many brands are bidding for similar consumer segments. On the other hand, less competitive industries, like niche local services, often experience lower costs as fewer advertisers are competing for the same audience.
5. Competition
If you are targeting a popular audience segment, you'll likely face stiff competition from other advertisers bidding for the same audience. High competition can increase your cost per click (CPC) or cost per impression (CPM), as Facebook favours the highest bidders in its ad auction system.
6. Ad Placement
Facebook provides a variety of ad placements, including feeds, stories, in-stream videos, and the Audience Network. Ads placed in premium spots, like Facebook’s News Feed, tend to be more expensive than placements in less visible areas, such as the right-hand column or Audience Network.
7. Relevance Score
Your relevance score (or now known as Quality Ranking) is based on how well your ad matches your audience's interests and engagement. Ads with higher relevance scores are favoured by Facebook and cost less to show. Poorly targeted or irrelevant ads will drive up costs because they won't perform as well in the ad auction.
8. Date and Time
The cost of Facebook ads can fluctuate based on the time of day and day of the week. Ads shown during peak hours when more people are online may be more expensive due to increased competition. Running ads at less competitive times, like late evenings or weekends, can help you save on costs.
9. Seasonality
Certain times of the year, such as the holiday season or during major events (like Black Friday), can significantly affect ad costs due to the surge in competition. During these periods, advertisers are willing to bid more aggressively to capture consumer attention, which drives up the price of ads.
How much does it Cost to have Someone Manage my Campaign?
When you hire a professional to manage your Facebook ad campaign, costs typically depend on their experience, the complexity of the campaign, and the duration of their management. In Australia, social media marketing agencies or freelancers usually charge anywhere from $500 to $5,000 per month, depending on the scope of work.
For smaller businesses, freelancers or smaller agencies might charge lower rates, often starting at around $500 to $1,500 per month for basic campaign management. Larger agencies with more experience, however, can charge upwards of $2,000 to $5,000 per month for more comprehensive services like audience research, ad copy, graphic design, split testing, and ongoing optimisation.
The management fees may also be a percentage of your total ad spend, typically ranging between 10-20% of your monthly Facebook ad budget.
Should I pay Someone to Manage my Campaign?
Paying a professional social media agency to manage your Facebook ad campaign can be a smart investment if you're looking for expertise and efficiency. Here are a few factors to consider:
- Time Efficiency: If you lack the time to monitor your campaigns, hiring an expert frees you up to focus on other aspects of your business.
- Expertise: Professionals understand how to target the right audiences, optimise bidding strategies, and refine ad creatives to get the best results for your budget.
- Long-term Savings: While there’s an upfront cost to hiring an expert, they often deliver better returns on ad spend (ROAS), which can outweigh the management fees.
However, if your business is just starting out and you’re working with a very limited budget, you might prefer to learn Facebook Ads yourself to save on costs initially. If you find your campaigns are not generating desired results, then it might be time to hire someone with experience.
How to Minimise Facebook Advertising Costs
While Facebook advertising can be expensive, there are several strategies you can implement to reduce costs while still achieving meaningful results.
1. Start with a Small Budget
Especially for businesses new to Facebook ads, starting with a small budget allows you to test different audiences, ad creatives, and placements without committing too much money. A small budget helps you understand what works best for your business and make adjustments before scaling up.
2. Split Testing
Split testing, or A/B testing, involves running multiple variations of an ad to see which performs better. By testing different headlines, images, or target audiences, you can identify the highest-performing ads and focus your budget on what’s proven to work, ultimately reducing wasted ad spend.
3. Set Limit for Ad Spend
Setting a daily or lifetime ad budget helps you control how much you're spending on each campaign. Facebook allows you to set maximum limits, ensuring you don’t exceed your desired spend. This is particularly useful if you want to stay within a strict budget.
4. Use Lookalike Audiences
A powerful way to maximise ad performance while minimising costs is by using Facebook’s Lookalike Audiences. These audiences are based on users who share similar traits to your existing customers, meaning they’re more likely to engage with your ads. By targeting people who already resemble your best-performing audience, you can achieve better results with lower ad spend, as these users are more likely to convert.
5. Optimise for Mobile-First Ads
With the majority of Facebook users accessing the platform via mobile devices, designing mobile-first ads can lead to higher engagement and lower costs. Mobile-optimised ads are typically cheaper to run because they’re more relevant to the user’s experience, especially in placements like Stories or mobile News Feeds. Ensuring your ads are visually compelling and load quickly on mobile can reduce cost-per-click (CPC) and cost-per-impression (CPM).
Summing Up
Facebook advertising offers immense potential for businesses in Australia, but managing costs effectively is key to maximising returns. Whether you decide to manage your campaigns yourself or hire a professional, understanding the factors that influence Facebook ad costs can help you make smarter choices. With careful planning and regular optimisation, you can create Facebook ad campaigns that drive growth for your business.
Need a hand with your social media marketing? Talk to us! At Margin, our team of social media superstars would love to help your brand get discovered online, and build your following of devoted fans. Book your FREE Discovery Call.
