Updated: Jan 2
The growth of a business with no doubt requires the use of standard advertising platforms. It’s no news also that Facebook has been and is still fast growing when it comes to advertisement. Well, the reasons for this are not far-fetched. Naturally, it’s because of the target audience you can reach per time and ultimately for the flexible ad costs. Now speaking of the flexibility that comes with Facebook ads, the question has been up for a while to know how to cut down this cost. This question, exactly, is what this post is set to answer, but before we dive fully into that, it might be necessary to know the factors that affect your ad cost.
It is noteworthy that your Facebook ranking does affect how much you will pay for ads. Also, your audience is a significant determinant of your ad cost; once other advertisers are trying to get through the same audience as you, the cost of placing ads go up since there is a limit to what can show on their newsfeeds. Your bidding and purpose for which you want to advertise (things you seek to achieve with the ad) affect how much you will have to pay. By “bidding”, we mean how much you are willing to pay, it is more like an auction getting ads on Facebook in which you are allowed to set the price of your choice for various activity options ranging from ‘conversation” to “like views” and “clicks”. Size of the industry also is quite notable, of course, a start-up trading petty things will advertise at a much lower price than commercial firms. Other factors to put in mind include your nationality, location, age and gender.
As more and more businesses spring up daily, the need for ads has since had similar growth too. The problem, however, is that despite the businesses out there, there's a limit to the number of ads Facebook can show, hence, very keen competition. You might not have to worry anymore why it is of utmost importance to target your audience carefully before placing ads, so as not to be paying so much for so little. Also, for first timers, it requires you to do some in-depth research, else, all you will get despite your paid ads are likes and likes do not translate to actual sales. You need people to get across to you and not just like the ad.
Now, having known the factors that determine Facebook ad costs, before moving to how to reduce the price, we should at least see how the costs are determined. How does Facebook come about their ad costs?
Intending advertisers are charged for ads by ad impressions offered in units of 1,000. Facebook denotes this as CPM (cost per 1000 impressions). The CPM differs from ad to ad according to the factors we’ve established above (bidding, audience, country e.tc.) Findings have revealed that depending on these factors; one might expect Cost Per 1000 impressions, CPM, to come between $5 and $10. Also, Facebook will charge you for ads by Cost Per Clicks, CPC. CPC however often comes below $2.
Costs of Facebook ads could be overwhelming, especially when the input doesn't seem to equal the output. Spending almost half of your income on Facebook ads is no longer necessary. It safe then at this point to unveil some sure ways to reduce the costs of your Facebook ads:
Retarget: Retargeting is when you continue to show your ads to your friends (people who already know you and what you do). The term “warm audience” is used to describe this set of people. Going by the previous and existing relationships between you and the warm audience, you are likely to get more interactions and ad clicks from them. Therefore increasing your Click-through rate, CTR, and decreases your CPM. You could use retargeting in quite many ways. Audiences from your email might come in handy. You could also pull off a list from those who interacted with your previous ad one way or the other when you put it to a cold audience. In simpler terms, having a record of people who have previously engaged with your ad and showing it to them again gets you their attention in your next ad. They won’t mind clicking.
Ensure to use Bid Caps: Ads, as earlier stated, are like auctions. The bid you make to place your ads directly affects the target you reach. Facebook readily offers an automatic bid option; however, marketers can influence this setting by manually setting bids. Manually putting up your requests will go a long way in cutting down the costs of the ad. There are two bid strategies available on Facebook which you can utilise in order attain much lower cost of ads- (1) Lowest cost and (2) Target cost, with the former being the default. While using the default setting isn’t bad, we can say however that setting your bid caps is better and will lower your cost, and at the same time give you the desired result. Setting your bid cap will mean you are granting Facebook the maximum you are letting the Facebook bid for a single event. Since you always will likely spend less than what you set, we recommend you set higher bid caps to increase the coverage of your ads
Be Specific in your audience targeting: By now, you know that by placing ads on Facebook, you are entering a severe competition with many other advertisers or marketers who are trying to reach out to the same audience as you. Generalising your targets would rather be a waste of space and money. What you want to do is reduce unnecessary competition from other brands trying to get through the same audience as you. Precise and specific planning while targeting your audience is what it takes to reach you facebook ad goals successfully. For instance, if you're going to market books meant for high school students who are orphans and sponsoring themselves through school. It would be much better to state it as it is than merely targeting “high school students”. Targeting just high school students will, of course, reach several thousands of students but only a few of those thousands will benefit from the ad. The reach is high, but the conversion is low. In ad placement, the clicks and reactions are much more important than the actual range.
Use Facebook Pixels: Facebook pixels are codes you input into your website. Setting Facebook pixel does the work of keeping track of your clients and their activities. Beyond allowing you to know the identities of your clients, it gives you much more personal information about them; their interests, hobbies, how they spend their time, how much they make, where they like to holiday, their family size, just about anything about them. When you have a track of this info, doing your math right, you can deduce the type of people who can do business with you. Also, Facebook pixel allows you to have records of activities going on in your website (people who have visited and clicked one thing or the other e.t.c). With this, you can predict how well your business is moving, and this will help you to target your next ads to the people that matter.
Be creative with your ads: It is not enough to post just one ad and relax. What matters to every person differs by interest. When it comes to appealing to an individual through ads, a lot of things can contribute such as; colour, images and much more. Considering all these factors, it is beyond doubts that a single ad cannot satisfy all these criteria for different people. Since Facebook allows you to run multiple ads at the same time, instead of knocking yourself out to create what appeals to everyone in a single ad, why not break it down and address different issues in different ads! Create different ads and check how far each one goes, see how much sales each could convert. This survey of the best performing ad will help you to know what to emphasise in your next ad to get the best result — resulting in reduced financial cost on not-so-important ads.
Use videos: Placing your ads by the use of videos cost less than the usual non-video adds. The reason for this is that Facebook takes note and credits more of videos, gives more impression shares. Therefore, when you use videos, Facebook naturally charges you pretty low for running your ads. Also, as a gesture of goodwill, Facebooks allows you to use their tools to create some simple slideshows, and it has proven to be useful to start-ups. For much more prominent firms, however, you could use whatever device you so desire in creating your video ads
Utilise news feeds: Use of Facebook news feeds is especially essential for increasing your Cost Per thousand impressions. Every single person logging on to Facebook goes through their news feed more than any other thing. Putting your ads on news feed will increase the visibility and over time increase the number of reactions you get.
Define your audience: You have quite some people you engage with already. Some are already your friends(fans), some you have done business with before, others you have never had met. Getting through to these different sets of people will require different energy. It then would be wrong to muddle up your ad campaign. Focus on different sets of the audience at different times for different purposes. When you create a separate post for your fans, your CPM increases better than when they are all mixed up.
Always check for audience overlap: Audience overlap means you are targeting a similar audience. It, in turn, means you are bidding against yourself because Facebook will serve your ad to the same people, (more like paying to advertise to the same person twice) waste of money, right? Well, yea. It is essential to bypass this overlap and choose the audience most relevant your desired result. We recommend that you use Facebook Overlap tool to check for your audience overlap and adjust to having little or no overlap.
Work on your relevance score: Just as it sounds, a relevance score is how relevant Facebook thinks your ad is to your audience. Relevance score has a direct impact on how much you will pay for ads. High relevance score translates into lower cost, and this is why you might want to look out for your score relevance and work to increase it. How then do you boost your relevance score? Activities going on with your ad is a significant determinant of your score relevance (e.g. clicks, saves, and engagements). Also, increasing your Click-through rates, CTR is useful for improving your relevance score.
Increase your CTR: Click-through rate, CTR, is the ratio of users who click on your website link to the number of people who view the ad (number of times your ad will show to the rate of when it’s clicked). CTR is a yardstick for knowing how well your advertisement is fairing. Increase in your CTR often leads to a rise in your relevance score and ultimately, a lower ad cost. There are things however to do to increase your CTR. Always ensure to use ad extensions, this increases the visibility of your ads. Also, use desktop news feed ads. Work on your call to action buttons, make sure they are appropriate. Besides, make sure your contents are short and precise. Ambiguity in your texts might piss off intending customers and scare them away from clicking your ad.
I would also recommend watching this video about how to test products with Instagram ads, I teach you step by step how to setup your instagram ads, I recommend instagram ads as they are cheaper and just as powerful I explain everything in the video see you there
I am committed to seeing your business blossom through Facebook ads. I can assure you that all the methods outlined above if carefully studied and strictly adhered to, will help you advertise on Facebook at a very reduced price.
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