What do Facebook Ads Cost?

Monday, August 1st, 2011 at 11:02 pm

Facebook Ads Cost

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So how much should you pay for Facebook ads? If you do Facebook advertising correctly, you should not have to pay anything. Yup, no cost what so ever.

This is possible, only when the traffic you are generating converts into leads and sales. If you are not receiving a positive Return On Investment than there is something wrong and you will need to study your sales funnel and make some changes until you are producing a positive ROI.

There are techniques you can use to lower Facebook ads cost substantially. In fact, you can many times completely eliminate your advertising cost with Facebook.

Facebook Ads Cost – You have Choices

You have two different options when advertising with Facebook ads. There is “cost per click” and “cost per impression.” Yes ads do cost money, but remember the goal is to convert your clicks into likes, leads, and sales.

Cost Per Click – With CPC you are paying a specific amount of money for every click your ad receives.

Cost Per Impression – CPM is where you are charged per 1,000 impressions or in other words, per how many times your ad shows up in the network. With this method, it doesn’t matter how many or how few times your ad is clicked because you are paying per impression, not click.

It is your job as a marketer to decide which of these methods work best for a particular ad. You do this by testing with both options to determine the best facebook ads cost possible.

Positive ROI = No Facebook Ads Cost

The number one goal for any direct response advertising campaign is to always spend less than you earn, therefore producing a positive return on your investment. You can create a positive ROI by tracking your cost per click/impression, as well as, how many likes, leads, and sales you accumulate on the back end you’re your advertising campaign.

So let’s say for example, you’re paying $0.25 per click and it takes an average of 10 clicks to produce a lead. This means you are paying about $2.50 per lead.

So the question is, how many leads do you need to make money?

This is something you must answer based on your business’ “conversion to sale” ratio. For example, your business spits out a sale for every 10 leads(10% conversion ratio), and let’s say you are promoting a $60 product that pays you a $20 commission.

If it takes 10 leads to make a $20 commission, and each lead costs you $2.50 than you would be paying $25 for a $20 commission. With this result you may consider making some changes to your ads or sales funnel. This is where split-testing comes in.

Facebook Ads Cost Conclusion

Facebook ads cost really is dependent on your commitment to testing and tweaking your ads and sales funnel to convert at the highest quality rate possible. As long as you get any level of positive ROI with your campaigns, that this advertising strategy can be highly effective. Obviously, like any other marketing strategy, you will improve your skills and effectiveness over time. If you are serious about Facebook PPC, than you must invest in your education.