Facebook Ads Costs in 2024 [Detailed Guide for Marketers]

Ads are everywhere, and social media is no exception. Almost three billion people use Facebook every single day. 

That’s like — half the planet. Obviously, knowing how Facebook’s ads work can open up the lead floodgates. 

And, of course, Facebook is still, by far, the most popular advertising social media platform.

Here’s the data to prove that. 

Source: Statista

Pretty soon, the only downside you’ll have will be turning away too many customers. But for now, let’s begin the guide. Here’s what you’ll learn.

• An overview of Facebook advertising
• How the Facebook ad auction works
• How much do Facebook ads cost?
• What factors affect your Facebook ad’s cost?
• Are Facebook ads worth paying for?
• 12 best tips to optimize your Facebook ad costs
• How to get better results from your Facebook ads

An overview of Facebook advertising

As a very rough guide, the lowest you’d expect to spend on a Facebook Ads campaign is $4. If that was the number you were looking for, there it is. 

But there are half a dozen factors that can make that number go up or down. And we’re not using “half a dozen” as placeholder text — there are exactly six factors that influence ad price. 

These factors can drive the average ad price below $0.25 as well as north of $10. 

We’ll cover these later on; for now, here are four key numbers.

• Over 2.8 billion people use Facebook every month.

• The average cost per click (CPC) on Facebook is around $0.97.

• The average cost per thousand impressions (CPM) is about $7.19.

• In 2023, businesses spent over $118 billion on Facebook ads. This shows that many companies find Facebook ads valuable.

Source: Statista

This article is a (rather) deep dive into the true cost of Facebook ads. By the end, you’ll be able to accurately guesstimate what your ad is going to cost, no matter your industry or location.

Before we begin that deep dive, though, understand one thing. Facebook ads are not like items in a market. You don’t just go, pick, pay, and leave. The process of getting your ad on Facebook is actually an auction. 

Here’s what that entails.

The Facebook ad auction

Before your ad goes live on Facebook, you enter the Facebook ad auction. There are three main “avenues” that you can bid on. 

• CPC bidding: you bid to pay per click. 

• CPM bidding: you bid to pay per 1,000 impressions. 

• Conversion bidding: you bid to pay after each specific conversion, like an email signup. 

You see, there are many people all competing for limited ad spots. As a result, whoever is willing to pay the most (per click) is given the highest priority. And of course, their ads show up higher and more often. 

But if you don’t have money to burn, not everything is over. The Facebook ads cost algorithm looks at the quality of your ad as well. 

If your ads are of high quality, then your total cost would decrease without you losing priority in the ad queue. 

Do these avenues influence the price of your ads? Yes. For example, you’ll pay a lot more for conversion bidding than CPC. However, conversion bidding will result in fewer, but higher-quality leads. 

The nuances of this are explained in the section below.

How much do Facebook ads cost?

It’s natural to ask this question. It would be amazing to know the exact range of your Facebook ads cost upfront. 

However — that isn’t possible. 

Your Facebook ads cost depends on a host of factors, which we’ll outline further in the next section. Now, put away your pitchforks for now — you won’t need them just yet. While it’s hard to quantify the exact cost of Facebook ads, we can look at metrics. 

Here are the best metrics to help you measure your Facebook Ads cost. 

These are your Facebook Ad cost benchmarks if you will.

1. Cost Per Click (CPC)

Cost per click (CPC) means you pay every time someone clicks on your Facebook ad. This could be clicking a call-to-action button or visiting your ad’s destination URL. 

The average CPC on Facebook is $1.68 across industries. 

This cost can vary based on your ad quality, target audience, and competition. For instance, industries like finance and insurance might have higher CPCs due to more competition. 

Understanding your CPC helps you budget and optimize your ads to get the best results for your money.

Here is the average CPC for Q1 2024 so far.

Source: Statista

Also, for good measure, the 2024 CPC is sorted by industry, as below.

Source: Statista

2. Cost Per Thousand Impressions

You’ll remember in the section above; we talked about something called “CPM.” 

Fun fact: CPM stands for “cost per mile.” Mile comes from the Latin word “mille,” which literally translates to “thousand.” Hence, CPM = cost per 1,000 impressions. 

The CPM is what you pay every time your Facebook ad is shown 1,000 times. 

These impressions can be to the same or different user accounts. The average CPM on Facebook is $8.70 across all industries. This metric is useful for brand awareness campaigns where you want your ad to be seen by many people. 

Costs vary based on factors like target audience and ad quality. 

Source: Statista

3. Cost Per Conversion 

This refers to the cost of a specific action taken by a user after seeing your ad. For instance,  making a purchase, signing up for a newsletter, or downloading an app. 

This metric helps you understand the value of each conversion. On Facebook, the average CPA across industries is $19.68. Costs can vary significantly depending on your industry, target audience, and the type of action. 

For instance, actions that require more commitment, like a purchase, often have a higher CPA compared to simpler actions like sign-ups. 

Monitoring your CPA helps ensure your ad spend is driving valuable results. Some marketers also call this “Cost Per Action” instead of “Cost Per Conversion”. The reason is that just because a customer has done an action, it doesn’t necessarily mean they’ll convert.

4. Cost Per Like

Cost per like (CPL) measures how much you pay when someone likes your Facebook page or posts from your ad. This metric is important for growing your social media presence. 

On average, the cost per like on Facebook is $0.25. Most businesses do not pay more than $1.00 per like. The actual cost can depend on factors like your ad quality, target audience, and industry. 

Tracking CPL helps you understand the cost-effectiveness of your efforts to increase your page or post likes.

5. Cost Per Lead

(CPL) is the amount you pay when someone provides their contact information through your ad. For example, you could get it through them by filling out a form or signing up for a newsletter. 

This metric is crucial for businesses focusing on lead generation. On average, the CPL on Facebook ranges from $5 to $7. 

However, this cost can vary based on your industry, target audience, and ad quality. 

For instance, Revealbot reported an average CPL of $8.01 in March 2024. Understanding your CPL helps you gauge the efficiency of your lead generation efforts and optimize your budget accordingly.

6. Cost Per Download

This is how much you pay when someone downloads your app or digital product from your ad. This metric is vital for businesses promoting software, apps, or digital content. 

On average, the CPD on Facebook ranges from $0.01 to $5.00 for most businesses. However, around 2% of companies spend more than $10.00 per download. 

The actual cost can vary based on factors like your industry, target audience, and ad quality. 

Monitoring your CPD helps you understand the cost-effectiveness of your efforts to drive downloads and optimize your campaigns.

7. Cost Per Engagement (CPE)

Cost per engagement (CPE) measures the cost of any interaction with your ad, such as likes, shares, comments, or clicks. 

This metric is useful for understanding how engaging your ad is to users. 

The average CPE can vary widely based on the type of engagement and the ad’s quality. Tracking CPE helps you optimize your ad content to boost engagement and reduce costs.

8. Click-Through Rate (CTR)

Click-through rate (CTR) measures the percentage of people who click on your ad after seeing it. 

You divide clicks by impressions. Then, multiply by 100. Higher CTR = engaging and relevant ads. 

The average CTR on Facebook lies between 0.90% and 1.60%. Understanding your CTR helps you assess the effectiveness of your ad creatives and targeting.

Source: Statista

And with that, we’ve gotten your Facebook ad cost benchmarks out of the way. You now have an idea of how much your Facebook ads cost will run you. 

Also, remember that the cost of your Facebook ads will vary (greatly) by industry. Make sure to make engaging ads to reduce your overall cost. 

And now, it’s time to look at the factors. 

What are the components that affect the price of a Facebook ad? Let’s find out.

What factors affect your Facebook ad’s cost?

Your Facebook ads cost tends to be quite fluid. What you pay on Monday could double — or halve by Wednesday. This could be because you changed your targeting, or because Sunday happened to be Christmas. Let’s take a look at the six influencing factors we talked about earlier.

Ad Formats

There are many different ad formats available on Facebook. Here are your options, ranked from least to most expensive.

• Video ads: Ads that use videos to catch attention. By the way, these are actually cheaper than image ads.

• Image ads: Simple ads with an image and text.

• Carousel ads: Ads that show multiple images or videos in one ad.

• Collection ads: Ads that show a group of products.

The format of your ad can significantly impact its cost on Facebook. Each has its own strengths and cons.

For instance, long-form video ads generate better engagement but cost more to make. Short videos are cheap and quick to produce but may not retain your audience.

Carousel ads can show multiple things at once but can “spoil” the user for choice, leading to indecision. Truthfully, if you’re just starting out, then the best advice is to simply try everything. Once you’ve experimented with your campaigns, you can gauge what ad formats are working for you and which aren’t.

Then, you can double down on the ones that give you a balance between a fair Facebook ads cost and good ROAS.

Source

Location

Choosing the location where your ads are displayed will have a huge effect on your Facebook Ads cost. One of the best tips to reduce Facebook ads cost is to monitor your ad location. 

You see, different countries and even different regions in the same country have separate costs for Facebook ads.

To get the most bang for your buck, look for that just right “Goldilocks zone”. You want your audience to be active and engaged, but not too expensive to reach. It can make quite a huge difference. To illustrate, the average CPM (per 1000 impressions) in the USA is $20, but in Japan it’s lower than $7.

So, in the case above, if you can get the same number of conversions in Japan, you can shut down the ads in the USA. 

You’d get roughly 300% more ads for the same cost, or you could slash your ad spend by 65%. That’s how much of an effect location targeting can have on your Facebook ads.

Placement

A while ago, Facebook Ads was renamed to Meta ads. Meta is the parent company that (now) owns Facebook, Instagram, Whatsapp, Messenger, and Facebook Audience. 

You can make an ad, and through Meta ads, place it anywhere on those platforms. And within each platform, your choices are further divided. 

On Instagram, you have stories, search results, and sponsored posts. 

On Facebook, you have inbox messages, stories, posts, and column + banner ads. 

Each placement has a different cost and potential reach. For example, currently the most expensive placement on Facebook is the “rewarded video”. These run you $20 for every 1,000 impressions. The cheapest ads on Facebook at the time of writing are the right-column ads, coming in at under a dollar. 

Notably, Facebook Stories are twice as expensive as Instagram Stories.

Target Audience

The more specific your audience, the higher your associated Facebook ads cost.

Let’s take an example. “Men under 45” will be much more affordable than “Men above 21 and under 45 from the Midwest, who like camping”. 

When targeting, always mix broad (interests/demographics) filters with narrower ones. Different audience sizes will perform differently, and their costs will vary. For example, smaller retargeting audiences usually cost more per action compared to broader acquisition audiences. 

Testing different audience sizes and types, such as lookalikes and interests, helps optimize your ad spend. 

By targeting your entire sales funnel, you ensure a balance of cost and effectiveness.

Budget

Your budget is one of the main factors affecting Facebook ad costs. Let us explain.

When you’re setting up an ad campaign, you set one of two budgets: “daily” or “lifetime”. Say that you set a daily budget of $35 and want to run your ad for seven days. But you’ve targeted high competition keywords like “salon”, “hairdresser”, and “haircut” during peak hours.

As a result, you will pay less per hour but also get fewer clicks/ impressions/ conversions. But isn’t that ad price influenced by your targeting (keywords and timing)? 

To a great deal, yes. But the budget is also a factor.

Say another hairdressing salon targeted those keywords at the same peak hours, but set a budget of $100 per day. Salon #2 will likely have their ads placed higher, be charged more per ad, and get more views or clicks as their ad is higher than Salon #1.

Industry

The last of the major factors affecting Facebook ad costs is your industry. According to data, CPM and CPC can vary significantly across industries.

For instance, finance ad campaigns will cost upwards of $20 per day, but retail ads will be half that at $10. The metrics that will help you the most here are CPC and CTR. 

Your industry-wise CPC will tell you how much you’ll spend per ad. Your CTR will tell you that you need to run an “X” number of ads to get “Y%” of leads.

To make it easy for you, we’ve compiled the data.In the section above, on cost, you saw the Facebook Ads CPC sorted by industry. 

Now, here’s your Facebook Ads CTR, also sorted by industry.

Source: Self

Those were the six factors affecting Facebook ad costs.

Are Facebook ads worth paying for?

Short answer — yes. Here are their benefits.

1. Reach and Targeting

First, Facebook has a huge user base. Over 2.8 billion people use Facebook every month. This means your ads can reach a large audience. 

Source: Statista

But it’s not just about reaching many people; it’s about reaching the right people. 

Facebook’s targeting options let you show ads to specific groups based on age, location, interests, and more. 

2. Cost-Effectiveness

Facebook ads can be very cost-effective. The average cost per click (CPC) is about $1.68, and the average cost per thousand impressions (CPM) is around $8.70. 

These costs are generally lower compared to other advertising platforms. You can also set your own budget, so you control how much you spend. 

Source

This flexibility makes Facebook ads accessible for both small and large businesses.

3. Flexibility and Control

With Facebook ads, you have a lot of control. 

You can start with a small budget and increase it if and when you see positive results. 

You also get to choose when (and where) your ads appear. If you run a physical business, run your ads during slow hours. This is a strategy that restaurants and eateries use. If you sell high-value items like jewelry or cars, run more ads around the wedding season or near festivals.

Additionally, earlier Facebook used to bill you “at actual”. This means even if you set a target budget (say, $100), but you “used” $125 in the day, you’d be billed $125. 

Now, if you set a daily budget of $100, only $100 worth of ads will be run. 

4. A competitive advantage

Using Facebook ads is also pretty much not an option anymore — it’s a necessity. Today, there are more than 200 million registered businesses that advertise on Facebook. 

So ask yourself, can you really afford to not be using Facebook ads? 

Also, if your competitors are not using Facebook ads, exploit that opportunity to the fullest. Target their followers on Twitter. Push ads to their Facebook follower demographic. Set target ads around their business location.

Source: Statista

So, to answer your question, are Facebook ads worth it? The answer is most definitely a yes. 

In our final section, we’ll leave you with some tips to get the most out of your budgeting and bidding.

12 best tips to optimize your Facebook ad costs

Here are some pointers that will help your Facebook ads campaigns. 

1. Determine a daily or lifetime budget to control spending and prevent overspending.

2. Let Facebook optimize your bids to get the best results at the lowest cost (automatic bidding).

3. Exclude audiences who are unlikely to convert, such as current customers. That’s if the ad is for new customer acquisition.

4. Target people similar to your best customers. This is a specific setting called “lookalike audiences.”

5. Set frequency caps to avoid showing the same ad too often, which can increase costs and reduce effectiveness.

6. Run ads during peak times when your audience is most active. This would directly net you better engagement and lower costs.

7. Compare costs across different placements (e.g., Facebook, Instagram, Audience Network). Then, allocate the budget to the most cost-effective ones.

8. Allow Facebook to distribute your budget across ad sets to get the best overall performance.

9. Schedule ads to run only during the most effective times of the day. You’d want to avoid wasting budget on low-activity periods, right?. This setting is called “Dayparting”.

10. Identify which ad formats (e.g., video, carousel) give you the best ROI and prioritize them.

11. Regularly analyze which audience segments perform best and focus your budget there.

12. Run ads for users who have previously interacted with your content.  They are more likely to convert at a lower cost.

Those were our best tips, and you’ve successfully read to the end of this guide. 

Congratulations, you now know all the Facebook ads cost basics, and are ready to start your first campaign.

Final word: get better results from your Facebook ads

Now that you know how to manage your Facebook ad costs and improve performance, it can still feel overwhelming. 

If you want to maximize your results, consider bringing in professionals. 

At RetainIQ, we’re committed to making Facebook ads the top-performing part of your marketing strategy.  In fact, across all our clients, we’ve achieved an average 45% increase in ROAS.

How do we do it? Not by luck but by relying on a proven, repeatable methodology based on two pillars:

1. Years of experience and a deep understanding of Facebook’s advertising platform.
2. Cutting-edge tools are designed in-house to maximize your ad performance.

One example – our AI-based design product. It transforms your product catalog ads from ordinary photographs into high-converting, creator-style content. Whether you have 50 products or 50,000, our technology helps you create dynamic, engaging ads at scale.

And that’s just one way we help our clients skyrocket their Facebook ad ROAS.

If you believe Facebook ads have untapped potential for your business, let’s talk. We’ll be happy to show you how we can boost your results.

Contact us today for a free consultation.