The Real Cost Of Facebook Advertising & Is It Worth It For Your Business In 2021

Scenic Medias Team
February 25, 2021

In this resource, you are going to learn what Facebook advertising is, the numbers and the costs associated with it, how it can help your business and finally, if it is worth it for your business.

Introduction

First of all, I would like to say thank you for taking the time out of your busy schedule to read through this resource. Our aim is to always provide as much valuable information as we can, as we believe education is one of the key ingredients to success, especially when it comes to creating successful marketing campaigns and strategies.

In this resource, you are going to learn what Facebook advertising is, the numbers and the costs associated with it, how it can help your business and finally, if it is worth it for your business.

But, before we dive right in, I just want to give a brief overview of what we do here at Scenic Medias. We help businesses SURPASS their competition through paid advertising & social media marketing. Competitive advantage is key in any market and is one of the best things any business can leverage in order to promote growth and increase their customer base.

Now, without further ado, I hope you find the following resource helpful and are able to get valuable information and takeaways from this.

Chris Kingston | Founder & Head Of Marketing

What Is Facebook Advertising?

Since the beginning of ancient civilisations, advertising has been a method used to reach the masses, and broadcast important messages and information. Egyptians used papyrus (paper-like substance) to make sales messages and wall posters. In Europe, as the towns and cities of the middle ages grew and expanded, and with the general populace unable to read, they used images associated with certain trades in order to help people identify what a shop, factory or building represented.

Fast forward to the 21st century and there have been huge advancements in the methods of advertising. Businesses have a choice between television, billboard, newspaper, display advertising, referral schemes, influencer marketing, the list goes on. Now, one of the more favourable methods of advertising that businesses are using to promote their products and services, is Facebook Advertising. Why? Because with an average conversion rate of 9.21% and the ability to track every single user that interacts with an advert, it’s a no brainer that they should be using it!

For those of you that are not familiar with Facebook Advertising, don’t worry, here is a great description of what it is below.

Facebook Advertising is a method of advertising through social media platforms, specifically Facebook & Instagram, in order to reach potential customers, and thus accomplish your marketing goals. The advertiser shows their specific advert to people that are likely to be interested in the product or service being advertised to them. These advertisements are often placed within the News Feed on desktop, News Feed on mobile and in the Right Column of Facebook on desktop. They can also be found during and after videos and within Facebook & Instagram stories. More recently, adverts can be shown within the messenger app, which is at the forefront of consumer attention, considering 1.3 billion people use the messenger application.

How Can It Help Your Business?

Now that you know what Facebook Advertising is, you should be aware of all the benefits that come with it. We have listed just a few for you:

One of the most notable benefits of incorporating Facebook advertising into your marketing strategies is that you are able to reach your potential customers where they “hang out”. Many people, of all ages, use social media to catch up with friends, browse content, shop for products, and be entertained. By knowing where your customers' attention will be, you are able to save a lot of time and money when it comes to trying to find them.

Facebook offers a vast array of targeting and retargeting options so you can show your ads to a narrowly defined audience. Your adverts can target people via their demographic, location, behaviours, age, interests and more. You can also create your own custom audiences from email lists and website traffic, and then expand this audience through the power of lookalike audiences.

Facebook also doesn’t skimp on analytics and reporting for ad performance. Instead of struggling to see your conversion rate and other social metrics, you have it laid clearly out in front of you. Interested in knowing what ages resonate with your ads more? With the click of a button, you will be able to see exactly what ages are purchasing more, clicking more, even viewing your ads more. This is something you can do for a range of different metrics, helping you not only target your adverts for the right people but also monitor their effectiveness.

The average CPC (cost per click) for a Facebook Ad is $1.72. For industries such as Apparel, Retail and Travel & Hospitality, the average CPC is less than $0.70. That is almost 50% cheaper than running adverts on Google!

As you can see, there are many benefits to running Facebook Adverts, so no wonder $1.5 billion was spent on Facebook Advertising in 2019 alone!

What Are The Numbers & The Costs?
That is all well and good, but how much do Facebook Advertising campaigns actually cost? Well, they differ from industry to industry, however we are able to supply you with some average costs per objective, which will give you a very accurate estimate and understanding of the necessary costs involved, should you wish to invest part of your marketing budget into Facebook Advertising.

But, let’s not stop there! We have created a comparison between different methods of advertising, so you can see a full comparison of how each of them measure up in terms of average cost. Please refer to the statistics below:

Cost To Reach 1000 People With Advertising

  • Newspaper- $32.00 / £24
  • Magazine- $20 / £15
  • Radio- $8 / £6
  • TV- $7 / £5
  • Google Adwords- $2.75 / £2
  • Facebook Advertising- $0.25 / £0.19

As you can see, Facebook Advertising is the cheapest option. Remember, these are averages and will differ from industry to industry, however, let’s take a look at a recent advertising campaign we ran for one of our clients.

facebook advert example scenic medias ltd marketing agency facebook advertising

As you can see, the cost per 1000 people reached was only $1.26. Now, this advert had a location targeting California, meaning the advert was targeting a high income area in a highly developed nation, yet still the cost of reaching 1000 people was lower than Google Adwords and each traditional marketing method listed above.

Let’s take a look at another statistic.

Cost Per Click: Facebook vs Google

Cost per click refers to the actual price you pay per click to the link specified within your advert. In most cases, this link is a web page within a businesses or individuals website.

The average cost per click (CPC) for Facebook is: $3.77 with industries such as Apparel paying as little as only $0.45 per click!

On the other hand, the average cost per click (CPC) for Google is: $6.75 with ecommerce business expected to pay around $1.16 per click.

Again, Facebook Advertising comes out on top with the cheaper cost. Now, let’s take a final look at another key statistic.

Cost Per Action: Facebook vs Google

Cost per action is a very important metric for businesses that sell online. Cost per action is a digital advertising payment model that allows to charge an advertiser only for a specified action taken by a prospective customer. Actions may include making a purchase and providing personal information such as a phone number or email address.

The average cost per action (CPA) for Facebook is: $18.68

The average cost per action (CPA) for Google is: $48.96 for search (adverts shown within search results) and $75.51 for display (adverts shown within sites, videos and applications).

Facebook ends up being $30 cheaper than Google when the objective of your campaign is to get people to take action. To give an example from this, for every 1 action gained through Google, you could gain 2 actions through Facebook. Replace “action” with “customers” and perform some quick math, and you will be able to see just how impactful the cost savings can be on not just the cost to acquire a customer, but the revenue for your business.

Is It Worth It For Your Business?

So, the final thing to consider is, is it worth it for your business? Is your business going to benefit from running Facebook Adverts? That is a question you can answer by taking the statistics we have provided above and doing the math, but for the majority of businesses, the answer is simple- yes!

Now, we understand that although it may be enticing to dive into a new marketing channel for your business, and believe us, it is! But it is important to really crunch the numbers and know exactly what budget can be set aside for Facebook Advertising and if it will be profitable for your business.

We would love to help you with that. In order to help businesses just like yours, answer those very questions, we have developed two calculators.

One of them is our “LTV Tracking Sheet” which allows us to find the lifetime value of a customer for any business. Lifetime value is a very important metric for all businesses, as this tells you exactly how much a customer is worth to your business.

Our other calculator is our “Ecommerce Value Calculator” and the purpose of it is to see exactly what your estimated profit will be, should you wish to use Facebook Advertising as means of acquiring customers for your business. By inputting metrics such as your average order value, profit margins, ad spend, conversion rate and more, we will be able to give you an exact figure of how much profit you can expect to be making.

If that is something you would like to know more about, then we would love to discuss things further with you on a free 30-minute call, and help you to figure out whether or not Facebook Advertising is worth it for your business.

Schedule Your Free Discovery Call Below.

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