How to reduce the cost of advertising on Facebook

How does Facebook ad pricing work?

The basis of this format is the auction model, in which each placement of an advertisement turns into a kind of competition between advertisers for the attention of the audience.

Here's how it functions: You set a budget for your Facebook ad by determining the maximum amount you are willing to spend daily or throughout the campaign. Next, your ads bid for visibility, competing with each other based on a set budget and their own metrics. The auction system decides where your ad will be displayed and what its value will be.

It is important to remember that the key point is to optimize campaigns, make adjustments and changes to achieve your goals. The cost and placement of ads are dynamic parameters that depend on the chosen betting strategy and the effectiveness of ads.

10 factors that affect the cost of advertising on Facebook

When determining the strategic budget for Facebook ads, understanding the many factors that affect the cost of ads is of paramount importance. Here are the 10 most important components that define your advertising strategy.

Targeting your audience

Audience targeting plays a key role in shaping the cost of advertising on Facebook. A more precise definition of the target audience can lead to increased costs due to increased competition, whereas broader targeting can reduce costs. The main factors in choosing a target audience include demographic data, income level and customer characteristics — all of which significantly affect the cost of advertising campaigns.

Your niche

The nature of your niche significantly affects the cost of advertising on Facebook. Highly competitive industries such as financial services typically face higher advertising costs compared to less competitive sectors such as T-shirt manufacturing. The cost of attracting leads in your particular niche also significantly affects overall advertising costs.

Your competitors

Competition has a significant impact on the formation of the cost of advertising on Facebook. While accounting for competitors' advertising costs is important, it should not be the only factor determining your advertising strategy. It is important to develop an individual approach and be ready to experiment in order to find a successful betting strategy.

Season and holidays

Facebook advertising costs can vary depending on the time of year, holidays, and industry events. Advertising costs usually increase significantly during periods of high consumer demand, such as Black Friday and Cyber Monday. Therefore, seasonality is an important factor in determining the cost of advertising.

Time of day

The cost of advertising on Facebook can fluctuate throughout the day, with rates usually lower from midnight to 6 a.m. due to reduced competition. By default, ads run around the clock, but advertisers can set up an individual schedule for displaying ads, which can help reduce costs.

Your Geo

The geographical location of your target audience significantly affects the cost of advertising on Facebook. The prices for attracting 1,000 people (CPM) can vary significantly depending on the country: from $1 in some regions to $35 in the United States.

Trading strategy

Facebook Ads offers several betting strategies, each with a unique approach to budget allocation and optimization, providing advertisers with various benefits and aspects to consider.

Bids are based on the budget. This strategy aims to maximize results within a set budget. For example:

Low Cost: Aims to get the most conversions at the lowest cost.
Highest Value: Strives to get more valuable leads or actions, even if it means higher conversion costs.

Bids based on goals. This approach focuses on achieving specific goals within the framework of an advertising campaign:

Cost limitation: Provides cost control by preventing exceeding the set limit.
Minimum ROAS (Return on Ad Spend): It is focused on maximizing the return on advertising costs, ensuring the effectiveness of investments.

Manual bets. This method is suitable for experienced advertisers who want to monitor their campaigns in more detail:

Practical approach: requires a deep understanding of various betting strategies and their application.

Advantages and limitations: Manual bids allow you to manage your budget and bids more flexibly, but require significant experience and knowledge to use effectively.

Understanding the differences between budget-based and goal-based strategies, as well as knowing the specifics of manual bids, is key to optimizing Facebook ad spending and achieving the best results in your campaigns.

Ad formats

The key to an effective advertising strategy in Facebook Ads is to choose an ad format that matches your campaign goals and the preferences of your target audience. Whether it's text ads for brief information, videos to create an emotional connection, images to quickly attract attention, or a carousel to present multiple products or features, each format has its own unique advantages and features. Experimenting with different formats allows you to determine the most effective options for your business, ensuring maximum impact on your target audience and achieving the goals of the advertising campaign.

The purpose of your campaign

Choosing the right target for your Facebook advertising campaign is critical because it determines not only the focus of your efforts, but also affects the cost of advertising. Goals can cover categories such as views, reach, lead generation, and conversions, and each of them has its own CPC (cost per click) and affects your advertising budget.

Views: This goal is aimed at maximizing the number of views of your video or content. The CPC cost can be relatively low, since the goal is not necessarily related to attracting specific actions from users.

Reach: The goal of reach is to maximize the number of people who will see your ad. This can be useful for raising brand awareness. The CPC cost for this purpose is usually lower than for more conversion-oriented purposes.

Lead generation: The purpose of lead generation is to collect the contact information of potential customers. The CPC cost may be higher because the goal is to attract high-quality leads.

Conversions: The goal of conversions is to maximize the number of users who perform specific actions on your site or in the app, such as purchases or registrations. The CPC cost may be the highest due to the higher value of each conversion action.

Choosing a campaign goal should be justified by your overall business goals and contribute to achieving the desired results. It is also important to consider the budget and the expected CPC cost when choosing a goal in order to effectively allocate advertising resources and achieve the best results.

Rating of quality, engagement and conversion

Ratings play an important role in determining the effectiveness and cost of your Facebook ads. Factors such as relevance, user reviews, and engagement levels influence these ratings. Regular optimization of advertising helps to improve ratings, which leads to more effective campaigns and lower advertising costs.

How to reduce the cost of advertising on Facebook

Reducing Facebook advertising costs may seem like a daunting task, but with the right strategies, it's doable. Here are 8 effective methods that will help not only reduce costs, but also optimize the effectiveness of your advertising:

Specify the target audience: Choose specific criteria to make sure that your ad will be seen by those users who are interested in your product or service.

Make decisions based on data: Regularly analyze the effectiveness of your advertising campaigns and make adjustments based on the data obtained.

Increase the click-through rate (CTR): Create attractive ads with creative calls to action to increase the number of clicks and increase the relevance of your ads.

Know your goals: Clearly define your goals and understand how they relate to the key performance indicators of your advertising.

Lead with creativity: Use original and engaging content that will attract the attention of your audience and get them to act.

Optimize Ad placement: Remove poorly performing placements so that your ads are displayed in the most effective places.

Monitoring and controlling the frequency of ad placement: Make sure that your audience does not see ads too often to avoid ad fatigue.

Use Social proof and Feedback: Customer reviews and recommendations can help convince new users of the quality of your product or service and increase conversions.