Cost of Advertising on Facebook
The Cost of Advertising on Facebook
With a majority of successful marketing campaigns taking place on the internet, an increasing number of companies are now turning to social networking sites to reach their target audiences. With more than 500 million users worldwide, Facebook is quickly becoming the ideal platform for businesses to raise awareness of their brand and to, hopefully, expand their client or customer base. Therefore, it makes perfect sense that company’s should be investing in the advertising opportunities offered by Facebook.
The Two Costs Associated with Advertising on Facebook. There are, essentially, two ways to pay for advertising on Facebook. There is no set cost to place an ad on Facebook. There is simply a cost per click option and an ad impression option. Here are the differences between them:
- Cost Per Click (CPC). This option, in essence, allows you to determine how much you are willing and able to pay each time someone clicks on your ad. When choosing your budget for this during the setup process, you will be asked to specify your target audience. This information will enable facebook to provide you with a “suggested bid”, which is the amount of money currently being spent on similar ads that are being clicked on at that very moment. Starting bids for CPC are $.01, however, that rarely wins the bid. This pricing option is ideal for those that prefer to have facebook users click through to their website, due to the conversion factor, rather than simply having their ad displayed numerous times.
- Cost Per Thousand Impressions (CPM). Those that choose this option are more interested in seeing their ad displayed often, in order to raise brand awareness. Here, when setting up the ad, you decide upon how much you are willing to pay for every 1000 times that the ad is shown on Facebook. The minimum bid is $.02 for CPM, but, as with the CPC option, the “suggested bid” is usually higher.
Other Key Points of the Facebook Pricing Structure.
- Facebook allows you to choose a daily budget, for which it will not allow you to exceed. For instance, if you set $20.00 as your daily budget, the system will stop displaying your ad once the cost per clicks or cost per impressions accumulate to that amount. The minimum daily budget is $1.00.
- You are also provided with a daily spending limit, which is the maximum amount that facebook will allow you to pay out on any given day. It is, essentially, facebook’s billing management system, to ensure that payments to them are made. The daily spending limit will increase each time you successfully pay the previous amount due.
With 1 in 13 people worldwide logging into Facebook each and every day, the cost of Facebook Advertising can be miniscule compared the amount of business you receive as a result of your ad. After all, it has the potential to reach more potential clients and customers than was ever possible before.
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