What is the Facebook Advertising cost and its preliminaries?

Posted by Ambitious Agency on July 15th, 2021

If you’re in a business that uses social media as a primary source to advertise and market your products and services, then you cannot neglect Facebook. Facebook has over 2.70 billion monthly active users out of which about 98% of them access it from their mobile phones or tablets. Interesting right? Well, think about how much your advertisement on Facebook impacts your sales and business if it is reaching the right kind of audience. Considering the Facebook advertising cost that businesses have to incur per day is something very tricky. However, one thing is for sure, that they don’t cost more than your affordability. One critical thing about Facebook Advertising is that you need to analyze all the trends, cost and make a budget suitable to your pocket. So, let’s begin to learn about it. 

How much does Facebook advertising cost? 

There are many factors that influence the advertising costs such as your bidding skills, the quality and relevance of your ad, Estimated action rates which defines how a person will be responding to your ad, the target audience you want to reach and the competition to do it, and lastly, placement of your ad. Your costs do impact the overall impression, a click, or a conversion through Facebook ads.

These costs also vary depending on which country you’re in. If your business is in New Zealand, the average Facebook ads cost-per-click is between --content--.5 – .5 and the average cost per click is --content--.28 in the U.S.

How does Facebook decide to show your ads?

You need not have a big budget to win how your Facebook ad works. According to Facebook, there are two things the platform tries to balance and help to make your ads visible: 

• Creating value for the advertisers to help them reach substantial results.
• Providing positive and relevant experiences to people using Facebook. 

Facebook auctions the available space and the winner gets that specific space or spot they auctioned for. Furthermore, they get to have their ads shown to the end users. These auctions take place everyday. 

What is the Facebook ads auction process? 

When you’re ready to auction for the place, get down to bid for it. Unlike the traditional auction system, the space isn’t won by the highest monetary bid. Instead, the value that your target audience will get out of the ad is measured. The three main factors (already mentioned above) that are looked at are:

• Advertiser’s bid: this indicates how interested you are in showing your ad.
• Ad quality and relevance: Facebook measures how interested would be the person to see your ad. 
• Estimated action rates: Facebook calculates the likeliness of the person to take actions with your ad. 

Think of ROI 

A Facebook advertising agency put emphasis on the advertising ROI and not just the cost. So, it is important to take a greater look at the return on your investment using the formula: 

ROI = (Return – Investment) / Investment

There are two types of ROI to consider: 

Financial ROI

This ROI weighs your investment in Facebook Advertising cost against results of your business revenue. If possible, try to measure how your customers are spending to get your products or services and compare it to how much you’re putting in the Facebook advertisements. A simple way is to do a survey to understand where they heard of you. The ROI also helps to explore which is the best time to invest in advertising. 

Social ROI

Social ROI counts the interactions on your ad, that is, the amount of social engagement. Your social engagement includes likes, comments, and shares. See if all the interaction and engagement is worth what you’re spending. Also measure the reasonability. 

If you’re interested in learning more about Facebook Advertising, visit Ambitious - the best marketing and Facebook advertising agency in New Zealand. Head on now! 

Source URL: https://ambitious.nz/facebook-advertising-agency/