What Is The Average Click Per Impression For Facebook Ads?

Facebook Ads

Before discussing this topic, let me explain what is “Click Per Impression alias called “CPM”? CPM is a common metric used by the online advertising industry to gauge the cost-effectiveness of an ad campaign. It’s often used to compare performance among different ad publishers and campaigns. In this article, we are going to discuss “What is the Average Click per Impression for Facebook Ads?”

Click Here: Facebook Ad Collection

How do Facebook Ads work?

Before jumping into the difference between cost per click (CPC) ads and cost per thousand impressions (CPM) ads, we thought we’d provide a basic overview of how Facebook’s ad system works. Ultimately, Facebook’s ad network operates as a blind auction. Advertisers bid to have their ads displayed to various demographics. Facebook then displays those ads which perform the best (or generate the highest CPM for Facebook).

Why Would You Select CPM?

Facebook Ads

CPM, or cost per thousand impressions (aka. cost per thousand page views), is an advertising model that people running tens, hundreds, or even thousands of ad combinations will often use. The reason is that ads can perform better than Facebook’s recommended CPM and CPC bid rates. The only way to maximize your performance beyond a stated bid rate and figure out the lowest possible bid is to run on a CPM basis.

The reason is that your CPM bid has nothing to do with how well it will actually perform. In other words, I could bid $1.00 for 1,000 impressions, but if my click-through rate is exceptionally high, my ads could end up obtaining a CPM of $0.10 despite the fact that I bid $1.00. In turn, my ads will outperform Facebook’s estimated bid rates. Keep in mind, if you are running CPM campaigns, you must monitor your ads closely for two reasons:

  1. You could burn through your budget on low performing ads
  2. Your ad performance will decrease over time, in turn pushing your effective campaign CPM up over time

We previously shared what $5 per day will buy you on Facebook Ads, but how much does Facebook advertising really cost?

Facebook Ads
Facebook Ads

That’s a tricky question! And the short answer is, it’ll never cost you more than you have to spend. If you have a budget of $5 per day, Facebook Ads will never cost you more than $5 a day. However, there are a number of factors that will affect how far your budget will stretch and the success you’ll see for your money.

Maybe a better approach with Facebook Ads could be to think about how you can make your budget deliver the best results for your business. And that’s precisely where I’d love to help you today.

In order to help you understand exactly how to optimize your Facebook Ads spend for the best results, I dug into several Facebook resources and studies to identify some Facebook advertising benchmarks and along the way, I also discovered seven key factors that determine the cost of Facebook Adswhich I’m excited to share with you.

In this post, we’ll give you everything you need to know about the cost of Facebook Ads and how to make your budget work for you.

Benchmarks: How Much Does Facebook Advertising Cost?

Facebook Ads
Facebook Ads

You might be curious about the exact cost of an impression, a click, or a conversion through Facebook ads. However, as many factors influence the cost of Facebook advertising, there isn’t an absolute answer to this question.

Thankfully, Facebook Marketing Partners like AdEspresso, SalesForce, and Nanigans regularly analyze social media advertising spend. While the benchmarks will not tell you precisely how much your Facebook ad campaign will cost, they might be great reference points for your consideration.

The team at AdEspresso seems to have the most up-to-date benchmarks at the moment. They studied over 100 million dollars of ad spend in 2016 Q3 and came up with a set of benchmarks for the current cost of Facebook advertising. Here are a few of their findings (the currency is in U.S. dollars):

  • The average Cost per Click (CPC) is about $0.35 globally and about $0.28 in the U.S.
  • The average cost per like is $0.23 in the U.S.
  • The average cost per app install is $2.74 in the U.S.

Cost Per Click (CPC) By Country 

Cost Per Click (CPC) By Country 
Cost Per Click (CPC) By Country

Cost Per Like By Country

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Cost Per App Install By Country

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How Does Facebook Decide Whether To Show Your Ads?

Facebook Ads
Facebook Ads

We previously shared what $5 per day will buy you on Facebook Ads, but how much does Facebook advertising really cost?

That’s a tricky question! And the short answer is, it’ll never cost you more than you have to spend. If you have a budget of $5 per day, Facebook Ads will never cost you more than $5 a day. However, there are a number of factors that will affect how far your budget will stretch and the success you’ll see for your money.

Maybe a better approach with Facebook Ads could be to think about how you can make your budget deliver the best results for your business. And that’s precisely where I’d love to help you today.

In order to help you understand exactly how to optimize your Facebook Ads spend for the best results, I dug into several Facebook resources and studies to identify some Facebook advertising benchmarks and along the way, I also discovered seven key factors that determine the cost of Facebook Adswhich I’m excited to share with you.

Why Local Small Businesses Might Pay More for Facebook Ads

Facebook Ads
Facebook Ads

If you’re a local small business like a restaurant, the audience that you want to reach is much smaller than the entire country. It may be limited to a city or even a neighborhood within a city.

The great news is that Facebook enables you to target right down to the city or even zip codes. Your advertising will not be wasted on people that live 100 miles away from your business like it might be with television, radio, or a regional paper. The bad news is that a small local audience may have many other local firms bidding for it, in addition to national advertisers that want everyone. So, you shouldn’t be surprised if your costs are closer to $1.00 per click.

How Does Facebook Decide Whether To Show Your Ads?

Facebook Ads
Facebook Ads

Now that we’ve established some benchmarks on how much Facebook advertising costs, it might be helpful to understand how Facebook ads system works — in other words, how Facebook decides which ads to show each of its users.

According to Facebook:

When showing ads, we try to balance two things:

  • Creating value for advertisers by helping them reach and get results from people in their target audiences
  • Providing positive, relevant experiences for people using Facebook, Instagram or Audience Network

The best way for us to do this is to hold an auction in which both interests are represented. That way, advertisers are reaching people receptive to their ads and users are seeing something they’re interested in. This is different than a traditional auction because the winner isn’t the ad with the highest monetary bid, but the ad that creates the most overall value.

So, whenever there is an ad space available, Facebook will batch together all of the ads vying for that specific space and auction the spot, with the winner of the auction having their ad shown to the end user. Billions of these auctions take place every day.

How Do The Facebook Ads Auction Process Work?

Unlike a traditional auction, Facebook advertising space is not won with the highest monetary bid. This is because Facebook wants to provide a positive, and importantly, relevant experience for all of its users. As such, the winner of an auction is decided by the overall value created by the ad for the targeted user.

Facebook determines the potential value created by each ad by analyzing three factors:

  1. Advertiser bid – representing how interested you are in showing your ad.
  2. Ad quality and relevance – decided by how interested Facebook thinks a person will be in seeing your ad.
  3. Estimated action rates – calculated by how likely Facebook thinks a person will take the action you are optimizing for with your ad (for example visiting your website or downloading your app).

Whenever there’s ad real estate on Facebook up for auction, Facebook will combine the three factors into a total value and display the ad with the highest value. This means that you don’t need to have the highest bid each time to have your ad shown if your ad is of higher quality and relevance than your competitors.

After the auction is won, Facebook considers all the ads competing for that ad space and charges the winning ad the minimum amount that’s required to win the auction (meaning you won’t always be charged your maximum bid for ads on Facebook).

Factors that determine the cost of Facebook Ads

Facebook Ad costs
Facebook Ad Costs
  1. Your Bid: How Interested You Are In Showing Your Ad

When you create a Facebook Ad, you’re basically joining a huge, global auction, competing with other advertisers for ad space on Facebook.

Your bid amount represents how interested you are in showing your ad and the higher your bid, the more likely your ad will be shown. When creating your Facebook, you can set your bid automatically or manually.

  1. Ad Quality And Relevance: How Interested A Person Will Be In Seeing Your Ad?

Facebook estimates the quality and relevance of your ad based on how it’s performing. To help you understand how relevant your ad is to your target audience, Facebook provides a Relevance Score metric for each of your ads. When your ad’s relevance score is high, Facebook will show your ad more than ads with lower relevance scores, and you will also pay less to reach more of your target audience.

  1. Estimated Action Rates: How Likely A Person Will Act On Your Ad

When deciding whether to show your ad to a person in your target audience, Facebook estimates how likely the person will take the action you are optimizing for with your ad (this is called Estimated Action Rate).

  1. Your Audience Targeting: Who And How Many People You Are Trying To Reach

Who you target and how many people you target will influence your Facebook advertising cost. This is due to the level of competition to reach a particular audience. When more marketers are targeting a specific audience, it becomes more expensive to reach them.

  1. Time of The Year: How Many People Are Buying Facebook Ads

When the number of advertisers targeting an audience increases, so does the cost of ads. Studies reveal the CPM of Facebook ads during the holiday season in 2014. And found that costs increased across different bid types and ad placements.

  1. Placement: Where your ads appear

Placement describes where your ads are shown within Facebook’s ecosystem. The various locations in which you can display ads include:

  • News Feed
  • Right column
  • Facebook’s mobile News Feed
  • Instagram’s mobile News Feed
  • Audience Network
  • Messenger
  1. Optimization Of Ad Delivery: What Your Ad Is Optimized For

When creating your ad, if you click on “Show Advanced Options” under “Budget & Schedule”, you will find an option called “Optimization for Ad Delivery”.

Conclusion – Get Ready to Run Facebook Ads

Wow, so that was quite a long article on the cost of Facebook Ads. Thank you for staying with me throughout the post!

Facebook Ads optimization and cost is a huge topic, and I think we have barely scratched the surface here. I wish to hear your feedback and suggestions about this article! Feel free to share in the comments below! Stay tuned with Kranthi to know more about Facebook Advertising!

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