How competition affects advertising costsĮach year, more businesses start advertising on Facebook, and the budgets existing companies put towards digital marketing and social media also go up. Why is advertising on Facebook more expensive in 2021? We tracked our ad spend in the same quarter last year, and the prices are much different compared to today.īelow, you’ll see an average CPC of £0.19 and a CPM of £2.15. Nothing in Facebook advertising stays static, certainly not the prices. While at the bottom of the funnel, cost-per-install is much more important as your ads here emphasise conversion. For example, CPC and cost-per-like are important for ToFu or MoFu prospects. The importance of each metric changes depending on the funnel. We’ve found that driving traffic through impressions and reach objectives come with the highest cost. Focusing on the wrong goal may lead to your ads costing more than they should. The stage of the funnel that your potential customer is in should determine your campaign objective. As you go further down the funnel, the audience size decreases, but they’re more likely to buy, so advertising to them is more expensive. Naturally, the top of the funnel has the most people. Mainly due to the size of the audience at each stage. Why is there a difference between CPMs and CPC at each stage of the Facebook Ad funnel?Ī few factors. That’s because the ads here are much more likely to convert into a sale, making them much more valuable. While the total ad spend here is low, the average CPC and CPM costs are much higher than the other stages. The prospects targeted here are product page visitors and those who have added items to their cart but not yet purchased them. This is the last stage of the funnel, prospects here are very warm, and as such, the focus of the ads is on conversion and retention. The total ad spend falls because we’re now targeting a smaller number of people. We show them why we’re unique, emphasise the benefits and let them know why they should buy from us.Īs expected, the average costs begin to rise, not by too much, however. These are low intent website visitors or prospects who have engaged with our Facebook or Instagram content.Īds here are essentially nurturing those leads and further warming them up to us. As such, you’ll spend the bulk of your ad budget here. However, these ads are vital as they target a large pool of prospects, sending a number of them further down the funnel where they’ll become paying customers. That’s because prospects are less likely to buy at this stage, so the ad placements aren’t as valuable. You’ll notice that the average CPC and CPM costs are lower here. Our ads here are to drive these cold prospects to the website and improve brand awareness. ToFuįor this stage, we assume that prospects have never heard of our brand and are completely cold. Our Facebook ad spend in the UK between January 1st - 23rd March 2021 across 35 of our client accounts. Further down, we’ll show you the average costs for each funnel stage and how they differ. However, this a broad look at our ad spend and shows all stages of the funnel. The average CPC cost was £0.40, and CPM was £3.57. In the image below, you’ll see our Facebook ad spend in the first quarter of 2021. These prospects are more responsive and likely to buy from you, meaning you can be more direct with your offers in your ads. As you go further down the funnel, there are fewer prospects, but they’re much warmer to you. Imagine that prospects at the top haven’t heard of you adverts here tell them who you are and what you do. That’s because of the funnel.Ī Facebook marketing funnel is a model that shows your prospects’ journey as they go from unaware of you to paying customers via Facebook. These costs can also vary within a Facebook marketing campaign too. The cost for these can vary depending on what you’re selling, the competition and who you’re targeting. With CPM (cost per mile), you pay for every 1000 views of your ad. CPC (cost per click) is where you pay each time your ad gets clicked. Facebook charges you for these placements in two ways, either CPC or CPM. Facebook makes money by offering “placements” for ads on their platform, and advertisers bid for these placements.
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