A Look At Facebook Advertising Cost History [Small Business]

In 2019, Facebook mentioned it was home to 2.32 billion active users with the number growing each year. This figure illustrates the enormity of Facebook and why it remains a powerful marketing platform for small businesses.

This guide will shed light on what Facebook advertising entails, the various costs, and whether or not it works.

What is Facebook Advertising?

Facebook advertising refers to specific ads run on the social media platform. These ads are generated through the Facebook Ads Manager and can include newsfeed ads, carousel ads, and more. The options are endless and that makes it easier to fully customize how the ad plays and the message it sends.

This form of advertising aims to leverage the social media giant’s large community through targeted ads. Once a small business owner has logged in and created an account, they can start building full-fledged ad campaigns. These ad campaigns provide an opportunity to play around with different features, pick specific audiences, and build a targeted campaign that generates results.

With a large audience that’s widespread, it’s easier to target specific groups based on the business and its niche. For example, a business that sells gym equipment will target individuals that prefer working out, like fitness athletes, and have shown admiration for being fit. This alone sets it apart and makes it a useful tool for getting in front of people willing to buy.

To make the right choice, Facebook allows small business to pick through different campaign goals including app installs, clicks, messages, reach, brand awareness, and more depending on their requirements. This amount of detail ensures the business can grow and continue to gain in strength as time goes on.

Costs Associated with Facebook Ads

This is a question many small business owners have and rightly so.

Facebook advertising costs are an essential part of the equation. Without accurate numbers, you may not feel comfortable with the campaign and how expensive it becomes. To avoid cost uncertainty, Facebook does offer insight into its bidding formula and what is weighed heavily when it comes to setting costs.

Before anything else, it’s important to note the cost will always vary. There are several variables at play and each one matters when it comes to the overall price.

What are some of these variables?

In general, a more targeted campaign with a smaller group of members will cost more. For example, let’s imagine the campaign is set up for selling newborn baby toys to pregnant women in Texas. This is a very specific group with multiple layers to it. When that is the case, Facebook is going to charge you extra.

Cheaper ads are only run when the group is larger (i.e. targeting women of all ages across the country).

Another variable in determining Facebook advertising costs has to do with the ad type. Users can choose between brand awareness (i.e. spreading the word about your brand), consideration (getting people to think about the business or product), and conversions (getting members to click through or complete a specific objective).

In most cases, simple brand awareness is going to be cheaper than a conversion-based ad. Since the audience has to click-through, Facebook will charge more for the action.

Additional variables include the advertiser’s bid (your bid for setting up an ad), estimated action rates (the likelihood of your target group completing your ad objective), and ad relevance (how relevant your ad is for the targeted group).

Facebook also offers an option to choose between different bidding strategies. This includes automatic bidding, where Facebook sets your bid based on what’s going to deliver the best results. While manual bidding allows you to control everything including setting the initial bid. Remember, bidding higher simply means getting higher priority when it’s time to run the ad. This is why small businesses try to weigh the pros and cons of paying more.

As you can see, the costs will vary based on these variables. It’s important to understand Facebook’s formula before implementing new ads. This is the only way to get a deal that’s worth it and leads to a proper ROI.

Industry-Specific Costs with Facebook Ads in 2019

With Facebook advertising costs, it’s also important to think about your industry and how it’s valued.

The social media giant has clear-cut rates for each industry depending on a set of variables including marketing difficulty. Since certain target groups receive more attention than others, they’re priced accordingly. This ensures the bids are competitive and in line with what the audience is worth.

Let’s take a look at what some of these industry-specific costs are.

According to recent research, advertising costs are as follows:

* Retail – $5.21 CPM and 0.25 CPC
* Automotive – $4.50 CPM and 0.18 CPC
* Technology – $9.66 CPM and 0.40 CPC
* Entertainment – $3.90 CPM and 0.16 CPC
* E-Commerce – $7.84CPM and 0.51 CPC
* Food and Beverage – $5.21 CPM and 0.25 CPC
* Education – $5.61 CPM and 0.44 CPC
* Professional Services – $13.35 CPM and 1.01 CPC

Please note, these aren’t set costs and will vary depending on the market. Facebook continues to alter its algorithm based on how the audience reacts to certain ads and how many bids are put in.

Does Advertising on Facebook Work?

Yes, advertising on Facebook works well.

It’s highly regarded as one of the strongest options available for PPC advertising due to the large community. With people from all walks of life using Facebook at any given moment, it’s a true marketing powerhouse for generating positive results. It’s important to set up a small budget as a small business owner to see what works and what doesn’t.

Advertising on Facebook is a wonderful way to see what the target audience prefers. While other methods are great such as SEO, print media, and even TV ads, the contemporary benefits of social media advertising cannot be stressed enough. It’s one of the best ways to advertise with a purpose and see tangible results quickly.

Whether you are running a small business in the downtown core or looking to generate results online, Facebook ads will get the job done. They are a great testing ground for those wanting to get a read on how well their business is doing.

Other advertising methods can take quite a long time to get going and that’s wasteful. Instead of spending time waiting around, Facebook ads start producing results overnight. This ensures you can make tweaks along the way based on what works for your specific niche. This alone is a great way to progress and see meaningful results.

How Much Should You Spend On Facebook Ads?

In general, this depends on your budget and what you’re hoping to get out of the ads.

Most small business owners are recommended to start with a small amount. This could be something as small as $1,000 to see whether or not you’re targeting the right audience. There’s a learning curve that comes with advertising on Facebook, which is why having patience is key. You want to learn how to use the different targeting features before diving in headfirst.

With a smaller budget, you can start to generate results while still maintaining a positive ROI.

As you grow comfortable with the platform, it’s okay to start making adjustments and growing the budget. This is all going to come down to your willingness to tolerate risk and how quickly you learn as a business. Once you get the hang of things, it’s very easy to scale ads and start pumping more money into your ads.

What is a Realistic Facebook Advertising Budget for a Small Business

This is a good question and it’s important to understand how much money is needed before starting.

Most professionals believe it’s best to set up a small account with $1,000 in the beginning. This is to test the platform and see where mistakes are being made.

As you start to learn the various features associated with the Ads Manager, it’s okay to start increasing the budget. This means spending approximately $1,000 every month. The options are endless as you are going to see a considerable amount of growth as the ads start to warm up and generate results.

This is when it’s time to start doing an accounting to see whether or not you’re maintaining a positive ROI.

In the end, Facebook advertising costs will be a worthwhile investment to generate significant returns. The average business owner has one thing on their mind and that’s a larger bottom line. If that’s the case, Facebook ads provide a wonderful way to spread the word, build a strong customer base, and generate a strong ROI over time. This alone makes it one of the best investments a business owner can make moving forward.

Get started with a small budget to test the waters and notice the dramatic change in results. This is what makes it beneficial when it comes to seeing results.


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