You're ready to run Facebook ads for your business, but you're just not sure how much money to put behind them to get precisely what you need from them.
Facebook ads can deliver your message to those most likely to convert, but understanding reasonable cost per result is also important.
We will look at what influences Facebook ad costs and also give benchmarks across the various industries that will help you decide what a reasonable cost per result should be for your business.
What is a good cost per result for Facebook ads?
A good cost-per-result for Facebook ads depends on several factors, including your industry, campaign objective, audience targeting, and ad quality.
Generally, it would range between $0.50 and $2.00, but this could fluctuate widely based on these specific factors. As a result, targeting a highly competitive industry like finance or insurance incurs higher costs per result than a less competitive industry like apparel.
Similarly, your price may be higher if you're targeting a particular, niche audience than if you're targeting a more general audience.
Examples of cost per result benchmarks
To give you a better idea of what you can expect to pay for Facebook ads, here are some benchmarks for different industries:
- Apparel industry: $0.45 cost per click.
- Finance and insurance: $3.77 cost per click.
- B2B: $2.52 cost per click.
Keep in mind that these are just averages, and your actual costs may be higher or lower depending on the specifics of your campaign.
How to lower your Facebook ad costs
While many factors affect the cost of Facebook ads, there are also strategies you can use to lower them and get a better return on investment.
First, continuously test and optimize your ad creative. Switch up formats, images, videos, and copy to see what works better with audiences. A/B testing helps you understand the top ad performers, driving data-driven decisions when adjusting campaigns over time.
Another way to cut costs is to use Facebook's Advantage+ options when setting up your campaigns. This feature uses AI to automatically optimize ad targeting, placement, and bidding, all to deliver the best result at the lowest cost.
You can also use lookalike audiences to reach more people similar to your best customers. Facebook allows you to create these lookalike audiences from your existing customer data, website visitors, or page engagement.
Finally, monitor ad frequency and check relevance scores to prevent ad fatigue and guarantee high ad quality. If the frequency becomes too high or the relevance scores start to drop too low, it is a sign that your ad creative or targeting needs are freshening up.
How to determine a good cost per result for your Facebook ads
Setting a target cost per result for your Facebook ads is key to achieving your desired outcomes while maximizing your ad spend.
Here's how you can determine what a good cost per result looks like for your business:
1. Set clear campaign goals
Define the actions you want your potential users to take right after seeing your ad: they could be anything from a purchase to completing a lead form or installing an app. For each of these desired "results," assign a monetary value based on its business impact.
For example, if a lead were otherwise worth $100, then in theory, you'd be willing to pay up to $10 per lead that Facebook sent your way.
2. Analyze historical ad performance
Refer back to your past Facebook ad campaigns' data to understand the cost per result you've been able to achieve. It will help you set a baseline and be able to put your expectations right in successive campaigns.
You can also do some benchmarking research within the industry to understand how your costs stack up against your competition. Just remember these are benchmarks, and your actual costs will be different, depending on such things as audience targeting and ad quality.
3. Monitor and optimize campaigns
Once campaigns are live, monitor performance closely to see how actual costs compare to your target cost per result. Use Facebook Ads Manager to check key metrics, such as cost per click, cost per conversion, and return on ad spend.
If these metrics come in higher than expected, go ahead and start tweaking; that could be targeting, ad creative, or bidding strategy. A/B testing different elements can help you identify opportunities for improvement and gradually lower your cost per result over time.
Strategies to improve cost per result on Facebook ads
Achieving a good cost per result on Facebook ads is a process that requires continuous testing and optimization.
Here are some strategies you can implement to improve your ad performance and lower your costs:
1. Refine audience targeting
Ensuring your ad reaches the right people is a great way to improve your cost per result. Now, with Facebook's Advantage+ AI, targeting is automatically optimized concerning campaign objectives and user actions on the ad.
You can also create lookalike audiences based on your best customers to expand your reach while targeting high-potential users.
2. Optimize ad creative and copy
It is the ad’s creative and copy that forms the first impression, which guides the user to act. Test out different ad formats, such as single images, carousels, and videos, to see what resonates with your audience.
Experiment with other visuals, headlines, and copy to zero in on the combinations that drive the most significant engagement and conversions at the lowest cost.
3. Leverage retargeting campaigns
This is your opportunity to show ads to people who have interacted with your brand, such as visiting your website or Facebook page. Most of the time, these people convert more than cold audiences, so you are likely to drive a lot more results at a lesser cost.
Use Facebook's pixel or SDK to create retargeting audiences and build ad content based on the interests and behaviors of your potential customers.
4. Experiment with ad scheduling
Running your Facebook ad at certain times of the day and days of the week can impact your cost per result. In general, advertising during peak hours usually comes with a higher cost because there's more demand for ad space at that time.
Experiment with ad scheduling to see if running your ads during off-peak hours results in lower costs and better performance. With Facebook Ads Manager, you can create custom ad schedules and analyze performance broken down by time of day.
How to calculate cost per result for Facebook ads
Calculating cost per result is pretty simple: It's essentially the total ad spend you've incurred over a certain period divided by the number of expected results the ad has incurred (clicks, conversions, or leads).
For example, if you have $100 invested in a Facebook ad campaign and receive 50 leads, the cost per lead is $2. This means, on average, you pay $2 for every lead brought through your ads.
Over time, monitoring your cost per result will help you estimate the effectiveness of your ad campaigns and make data-driven decisions about performance optimization. If you see a rising price, it may suggest that something needs to be corrected in your targeting, ad creative, or bidding.
A really detailed report on the performance of your ads can be found in Facebook Ads Manager; it includes reports on metrics like cost per click, cost per conversion, and cost per result. Checking these metrics regularly will help reveal trends and areas that need improvement.
The point to note here is that your target cost per result will always change with industry, campaign objective, or value per action to your business. What may be a reasonable cost per result for one company could be unfeasible or unprofitable for another.
So, you'll have to set some meaningful goals and then put an associated monetary value on each type of result within your campaign so that you can make a judgment of what you are willing to pay for any specific action or a benchmark for success.
As you move forward with running and optimizing your Facebook ad campaigns, you will have a much clearer idea of what cost per result is feasible for your business. You can then use this information to optimize the strategy and distribute the ad budget to receive the maximum return on investment.
Is focusing on cost per result the best approach for Facebook ads?
Cost per result is a good metric to understand how effective your ad campaigns on Facebook are, but that should not be the end of consideration. While a lower cost per result could save your ad budget, one has to look at the bigger picture and evaluate how their ads contribute to the more significant business objectives.
Here, if the cost of acquisition per result is high, but the lifetime value of a customer brought into the business by your ads makes that acquisition cost seem relatively low in comparison, it becomes bearable.
For example, you may pay more for each conversion if you are targeting a high-value audience or selling a product or service with high average orders and excellent customer retention rates.
For instance, in a lead generation campaign, the quality of the leads acquired may outweigh the quantity. A higher cost per lead can be justified because the leads are more qualified and far likelier to convert into actual paying customers down the line.
You should strike a balance by tracking cost per result with other KPIs like return on ad spend (ROAS), customer lifetime value (CLV), and conversion rates (CR).
Regularly checking these KPIs will give you an idea of whether your Facebook ads are working, and decisions must be made based on insights.
Ultimately, the best way to advertise on Facebook is one that gels with your business and audience. It's great to have a low cost per result, but consider that just one element of the larger puzzle, one that consists of ad creativity, targeting, and overall campaign strategy.
So, keep an open mind as you continue testing and honing your Facebook ads. Try different new approaches that best suit your business. Focus on continuous improvement and commit to adding value to the people you are reaching. This will lead to the development of a Facebook advertising strategy that can yield significant results that support the long-term objectives for growth.
What tools can help optimize Facebook ad cost per result?
Managing a successful Facebook ad campaign requires more than just setting a budget and launching ads. To truly optimize your cost per result, you need the right tools and strategies in place.
One effective approach is to leverage a platform like Foreplay where you can save and organize ad inspirations from various sources, such as Facebook Ad Library or competitor pages. This allows you to analyze what works well in successful ads and apply those insights to your own campaigns.
One of Foreplay’s powerful tools is AI-powered brief creation. By using artificial intelligence to generate ad scripts, storyboards, and iterations based on your saved ad inspirations, you can streamline the ad creation process and produce high-quality content that resonates with your target audience.
Collaboration is also key to optimizing your Facebook ad performance. Foreplay facilitates seamless collaboration between team members, allowing you to share ad inspirations, provide feedback, and align on campaign objectives.
With Foreplay, you can save and organize ad inspirations, create AI-powered briefs, and collaborate efficiently with your team, all in one place.
Sign up today and optimize your Facebook ads with Foreplay.
