9 Ways to Lower Your Facebook Ad Costs
Facebook is a compelling platform for advertisers for many reasons, comprising powerful targeting options & affordable costs, among others.
Your Facebook ad costs will vary based on a number of factors, comprising your audience, industry, goals & optimization settings.
But Dan Rohsler, social account manager at digital agency Power Digital Marketing, said it’s common to expect the cost per thousand impressions (CPMs) to vary between $5 and $10 & cost per click (CPC) to come in below $2.
Kevin Miller, director of growth at home-buying app Open Listings, said a safe average cost per click on FB for most businesses is $1.50. Peter Messmer, director of growth & strategy at conversion optimization platform AddShoppers, said CPC costs for retargeting are in the $0.75 to $1.25 range, with cost per acquisition (CPA) costs for retargeting in the $5 – $10 range.
These costs are competitive & well within reach of smaller businesses.
With that in mind, here is a look at nine actionable steps your brand could take to save money on Facebook ads & come in below average.
1. Target a more specific audience.
Per Ben Cook, marketing director of social media JC Social Media, advertisers could be as precise with their criteria as possible when specifying audiences.
“By narrowing your target audiences, you can drastically reduce the competition from other brands running ads to similar audiences,” he said. “Remember you are in a bidding war with hundreds of other brands – only bid on who you want to reach.”
Cook said this means marketers grow the odds that their promoted content will resonate nearly with target individuals.
That was this case with children’s book brand Clever Tykes, which worked with JC Social Media to target mothers of children ages 6 to 9 and who were also self-employed/business owners, rather than simply targeting parents with children ages six to nine.
That is likely in part because the inventory is low & ad cost is high when you go after an audience that other advertisers want, said Timothy Masek, senior development strategist at development marketing agency Ladder Digital.
“If instead, you target a segment where there’re fewer advertisers competing for ad space – for instance, in international markets – your ad cost will be cheaper,” he added.
“In an effort to reward advertisers for adding value to the FB user, FB will decrease your [ad] cost if the content is relevant to your target segment,” he said. “This relevance is quantified by Facebook’s quality score.”
2. Use bid caps.
Katy Lowe, social media executive at digital marketing Passion Digital, on the other hand, said the more granular you go with audiences targeting, the more expensive results tend to be, as FB is offering a tool to reach your most valuable audiences, and it is in its own interest to charge more.
Lowe said Passion Digital manages this for its clients by using rules & bid caps, especially for app installs, based on the lifetime value of an individual lead/sale.
3. Look for audiences overlap.
In addition, Phillip Reinhardt, CEO & cofounder of digital marketing PBJ Marketing, said to use Facebook Audience Overlap tool to see if audiences are overlapping significantly – and, if they’re, to choose the audience that is most relevant to your marketing aims.
“After creating 2 separate audiences for people living in the United States interested in ‘Entrepreneurship’ & ‘Startup Company,’ we quickly ran audiences overlap check on FB,” Reinhardt said.
“As we could see, nearly 50% of the ‘Startup Company’ audience is interested in ‘Entrepreneurship,’” he said. “If we set up a campaign targeting these 2 audiences in separate ad sets without any audience exclusion & pay – let us suppose – $0.10 per click, we can waste up to $220,050 in the ad auction by bidding against ourselves.”
He excluded the interest in entrepreneurship in the startup company audience & vice versa, and ran the overlap tool again & got 0%.
This is important because if there’s a high percentage of overlap, you’re essentially bidding against yourself in the FB auction in order to serve ads to the same people.
“You’re not only advertising to the same person more than once, but you are also paying more to serve ads to the person because of internal competition,” Reinhardt said.
Having low – or no – overlap also allows you to better A/B test the different audiences you are using & customize your bids based on every audience’s ROI.
“For low intention audiences, we bid lower,” Reinhardt said. “For remarketing audiences/converters, we bid higher. This way, we can make sure we aren’t wasting money on people who’re not as interested in us.”
As for those who’re interested in both, Reinhardt said to create dedicated audiences that satisfy both criteria.
“Now if we run the audiences overview tool one last time for all 3 audiences, we’ll have a perfectly segmented group of audiences,” he added.