We have mixed feelings about all of the Facebook ad advice we see online.
Is it one of the most powerful platforms for online advertising? Yes, definitely.
Is it cheap and easy to use? Well, easy-ish and less expensive than others.
It’s a great option for small businesses. But things have changed in recent years, so we’ve added a couple of caveats when recommending it to clients.
Let’s take a look at how it works and our advice.
Why run ads on Facebook?
There’s no doubt that Facebook ads are a great choice for most small businesses. It’s the 3rd largest digital ad platform with 24% market share, behind Amazon’s 35% and Google’s 26%. (Data per eMarketer.)
More importantly, Facebook ads are known for having the highest return on investment (ROI) for companies advertising online. Many rated it higher than Google or Instagram ads. (Per HubSpot.)
The reasons why it works so well come down to cost, performance, and targeting.
Take advantage of great targeting
One of the biggest advantages of Facebook ads is the ability to target people at a very granular level. You can narrow it down by age, location, job, hobby or interest, life event, and much more.
Here are a few examples of who you can reach on Facebook:
- Homeowners in their 40s or older
- Newlyweds in their 20s or 30s
- Local retirees in their 60s or older
- Users who watched the videos you’ve posted on your company Facebook page.
- Users within a few miles’ radius of your location
- People who have recently visited your website
- People of all ages interested in fitness, sports, crafting, interior design, tech or specific brands
How Facebook ads work
Facebook ads are run on a bidding system, which determines their price. These prices depend on the competition, the ad goal, ad placement, and relevance.
For each ad, you make a bid for the max amount you’re willing to pay (per click, per impression or per ad objective). This doesn’t mean you’ll always pay the max price.
The bidding system compares all of the bids targeting the same users and decides which ad gets what spot and at what price. It doesn’t always choose the highest bid either. The ad’s relevance for the audience, for example, and even the landing page (page on your site the ad links to) are both important factors.
What can you expect to pay for Facebook ads?
After reading how the bidding system works, you can see why there’s no standard cost per ad. Prices are variable.
You can, however, control how much you spend for an ad campaign, for example, $15 per day or $500 for the total campaign. But you can’t control the cost per click or result.
Fortunately, there are data sources that report average costs to give you an idea. Revealbot shows that the average Facebook cost-per-click or CPC was $1.01 in 2021 and is $0.922 in September 2022 (across all industries).
Many industries are higher though. A few average CPCs include: $2.93 in the home improvement industry, $.70 in retail, $1.81 in real estate, and $3.77 in insurance/finance.
We’ve seen small business clients pay anywhere from 50 cents up to $4 per click for very competitive industries.
Depending on your industry, we suggest spending at least $500 per month on ads, with $300 as the bare minimum. Based on our experience, clients start to see real results at that level. From $500 to $1,000 a month is a good starting point as that’ll give Facebook enough time and budget to get the best results.
Should I hire someone to help me advertise on Facebook?
As much as we’d like everyone to hire a marketing pro like us, we still also used to support the DIY approach for limited budgets.
But things have changed.
Facebook has gotten much more restrictive with its rules for advertising, especially in certain industries like real estate, health/diet and finance.
It’s also clamping down on language used, requirements for images, and targeting for specific industries. On top of this, Facebook is encouraging companies to switch from using the easier Ads Manager interface to its Business Manager, which is more complicated. We’re sure at some point it will be a requirement.
All of this, plus the many Facebook glitches, which have become the norm lately, have led to many rejected ads and even closed accounts. Accounts are also closed for reasons they don’t fully explain. And when Facebook closes an ad account, there’s not much recourse. Unfortunately, customer service is mostly handled by email, with computer responses and very little human contact. This leads to not only lost time, but possibly lost funds on ad spend if a campaign is rejected or cut short.
For all of the above reasons, our advice in this area has changed. We now recommend clients work with a professional to run their ads. Not only to avoid any problems or possibly losing money, but also to get the best results in a shorter timeframe.
The bottom line – with caveats
Overall, we still consider Facebook one of the best platforms for small business advertising. But our 2 caveats now when recommending it is that you should be willing to hire a professional and should have enough of an ad budget to see results. This will position your business for success with Facebook advertising.
Considering it, but still not sure? Contact us with any questions. We’d be happy to help with a free consultation.