Facebook Advertisement: How Much Should You Invest In?

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As a real estate agent, you may have some questions about using social networking sites such as Facebook to boost service referral or product sales. One of them can be “how much does Facebook advertising cost?”

While most sites tell that the costs depend, there is actually a baseline you can start from. The details below will enlighten you important things you need to know about Facebook Ads including its costs.

If you use CPC method (Cost Per Click), the average cost for Facebook Ads is around $0.27 for each click. However, if you consider CPM or Cost Per Thousand Impressions, the price for your ad can be $7 or more.

But, there’s more you need to know beyond just knowing the average cost.

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Factors Affecting The Facebook Ads Cost

It is true that Facebook Advertising cost for each project depends on some factors. Listed below are some of the key factors influencing the total cost of the advertisements:

Ad Objectives

In every Facebook ad platform, there are various goals or objectives to decide on. Each type of ad type and the goal you set has distinct KPIs. They are showcased depending on the result you desire. In other words, the kind of objective will allow Facebook to target the people to show the ads.

There are three common objectives to choose from:

  • Awareness (Reach, Local Awareness, and Brand Awareness) – The goal is to establish great interest and full awareness in your services or products.
  • Consideration (Engagement, Traffic, Lead Generation, App installs, Video Views) – These are the ads created to let target customers remember about your product, service or business. The goal is to make them curious and ask for further details about what you offer.
  • Conversion (Product Catalog Sales, Conversions, and Store Visits) – These ads encourage the target market to perform a certain action such as using your service or buying your product.

For example, if your goal is to gain more traffic to your site, Facebook chooses those “clicky” audiences to show the ad to. Otherwise, the ads may be shown to those who convert if you aim for leads.

Ad Auction

Another factor that influences the cost of your Facebook Advertising is an auction and the bid. The reality in this Facebook Ads Auction is that the spot goes to the ad value than on high bidding. The value gains:

–    Ad Relevance and The Quality (Taken from the Facebook users testimonials; Checking the relevance on how Facebook identifies your audience)

–    Ad Bid ( The monetary bid you provide)

–    Estimated Action Rate (Calculated based on how Facebook estimates if each person can accomplish the goal you have selected)

Facebook has stated that it strives on the following when delivering advertisements:

  • Developing value for all its advertisers through guiding and assisting them to achieve results from their target market.
  • Delivering relevant and positive experiences among users of Instagram, Facebook and Audience Network.

To meet these goals, holding an auction is done to present both interests. Thus, advertisers will be able to reach their target markets based on what they need and what the company provides. It is completely different from traditional auctions.

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How Ad Bids Influence the Final Cost

Your Bid affects the final Facebook Advertisement cost in two ways – Manual and Automatic.

With automatic bid amount, you allow Facebook to set a specific bid for you to get more post engagements at a great price. On the other hand, the manual bid amount enters a bid depending on the type of post engagements that are right for you.

Facebook tells its advertisers to stay focused on ROI than of low cost. With Facebook ads, the higher the bidding, the more access to the best people you want to target.


Your target audience for your business ads on Facebook definitely affects the end cost. This means that to get lower cost, your audience must be relevant.

For instance, you own a home services business. Your goal is to create and show an ad for roof replacement services. You decided that the target audience will be those who are looking for home improvement.

While it seems to be a good idea for you, it is certainly wrong. Why?

Choosing “home improvement” alone as your qualifier means that your advertisements will be seen by everybody who has specified their interests on home improvement. It may include individuals who stay in an apartment building, those who are not homeowners and others who are simply indulged in watching clips about flipping houses and so on.

Ad Quality

If you will select two main things that can reduce your Facebook ads cost, you can have Ad Quality first and then Audience.

Facebook is like an online diary. The content may include random information about discovering new things and catching up with those that got their interests. Most of these online diaries are made to escape boredom.

Take note that such a mindset can make or break your ads. Since this is about “see” platform, typical ad copies you see in search results may not go beyond. Thus, you are spending too much ads cost.

The key is to make your Facebook Advertisements visually appealing and interesting. Furthermore, you should not forget to consider these criteria:

–    Your ads must catch the user’s interest

–    Your ads must invoke your user’s emotion

–    Your ads must encourage the user to take action

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Ads Relevance Score by Facebook

Again, Facebook gives high value to the relevance of your user. Such relevance is scored from 1 to 10, 10 as the highest. Based on the platform, the relevance score will be computed according to the negative and positive feedback that an ad receives from the target customer.

If your ad has more positive customer interactions, it will gain a higher relevance score. The positive indicators will be based on factors like conversions, video views, and objectives. The score will be updated once customers provide feedback and interest on your ad. In other words, boost your ad relevance score to cut down on your end cost.

Your Business Industry

In this factor, the industry your business is in and the kind of service or product you offer also affect your Facebook advertising cost. For example, selling a Rolex watch will give you a higher cost per result than you sell a fitness trial for 30 days.

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Final Thoughts

By looking at the details provided above, the best solution is to hire an expert in creating relevant Facebook Ads for you. Find someone who can do it especially if you are a new business advertiser on Facebook. Choosing the right marketing partner will save you time and money.


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