How much does Facebook Ads cost?

Facebook ads is affordable. In most cases running around 10 cents and other ads cost 75 cents per click. In real word of marketing, what’s more important is how much you’re earning for every time you get a click. We call it EPC.

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What is EPC (Earnings Per Click)

Earnings per Click (EPC) is a mathematical formula used to determine the commissions earned per click in online advertising. It can be calculated by taking your commissions and dividing it by the total number of clicks. The formula to determine EPC is as follows:

Commissions Earned / Total Clicks = EPC

It is important to understand your EPC, because it not only indicates how well an offer will convert; it also shows the real worth of a click. This is a good way to determine which offer will perform the best when comparing similar offers with different payouts.

How to Evaluate Earnings per Click

To help you understand how to evaluate EPC, consider the following example:

You are about to promote two offers. Offer A pays $25 per sale and Offer B pays $50 per sale. Offer A received a total of 10,000 clicks. Offer B received a total of 15,000 clicks. At the end of the month, Offer A has a total of 40 sales and Offer B has 25 sales.

Which offer performed better?

Offer A

EPC: $25 * 40 sales = $1000 commissions

EPC = Commissions Earned ÷ Total Clicks = $1000/10,000 clicks = .10 EPC or Earnings per Click

Offer B

EPC: $50 * 25 sales = $1250 commissions

EPC = Commissions Earned ÷ Total Clicks = $1250/15,000 clicks = .08 EPC or Earnings per Click

As you can see, Offer A performed the best. The highest payout does not always perform the best.

Looks complicated? Don’t worry. I’ll show you what is the real meaning of Earnings Per Click.

Here’s a few examples about EPC:

Example A.)

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Facebook Pay Per Click = $0.50
Earnings Per Click = $1.00
Return of Investment = 200%
Lifetime Value = n/a

Example B.)

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Getting more clicks. The same Facebook Ad with better targeting such as custom audience, interest, age ranges and more.

Facebook Pay Per Click = $0.50
Earnings Per Click = $2.00
Return of Investment = 400%
Lifetime Value = n/a

Example C.)

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What if you have existing  customers that trust you? Or maybe you have a product that they really love and you provide good customer service with hassle free? What if you have all of those trust and have more than two or three products?

What would be the expected ROI?

This is the power of auto-responder softwares (email, apps etc.). Follow-ups to your existing customer is very critical when it comes to Internet Marketing.

Facebook Pay Per Click = $0.50
Earnings Per Click = $2.00
Return of Investment = 400%
Lifetime Value = 4,000% ROI (TRUST) with you Upsells, Cross Sells, Affiliate Offers, Follow-up through email or Phone.

The video and images will explain to you step by step about FB ads cost and other Marketing Terminology. Each terminology will help you explaining for each confusing words about Facebook ads and online marketing. Click the image below for more information about Facebook Ads Terminology

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Now that we know now how Facebook ads work, we would like to know what it looks like for pricing, bidding and Facebook ads currency.

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First you choose a currency for your account (depending on your billing preferences) and an Account Time and Zone that are necessary for the system to understand when the campaign starts and when it will end.

Choose a name for your campaign and set a Daily Budget or a Lifetime Budget if you prefer. You decide how much you are going to spend for running Ads on Facebook and how to manage your campaign budget.

If you choose to set a Daily Budget your ads will stop showing once the limit is reached.  Similarly, if you set a Lifetime Budget, once your budget is met, the ads will stop showing.

You can decide when your ads will run by scheduling the campaign’s starting day and time, and decide whether to set an ending day and time for it, or let it run continuously (to do that you just have to flag the checkbox next to  ‘Run my campaign continuously starting today’, below the ‘Campaign Schedule’ selection boxes).

Facebook itself suggests how much you should bid per click, but you can set a different bid if you want, just click on the ‘Set a Different Bid (Advanced Mode)’ on the bottom and discover Facebook’s Pricing options!

Facebook Ads Pricing

facebook-ad-pricing-selection

Which one is better? CPC or CPM?

CPC pricing can be safer, at least you are paying only when users click, and if you know your conversion rate, you can set a maximum bid that will guarantee profitable results.

CPM pricing is ideal when your ads are compelling and have high click through rate. You can also notice that certain ads perform better at night, or during the day: In this case pausing campaigns when they aren’t profitable and only waste impressions would be wise. The problem is that Facebook doesn’t allow day parting, and you have to pause and resume campaigns manually.

So would you prefer CPC rather than CPM? Let us know your thoughts about Facebook Ads pricing.

 

  • I only ever hear bad things about Facebook Paid Adds. Mostly that they scam customers by sending clicks from random ineffective customers. A bit like how the scam sites get you Likes.

  • ivildev

    Hi Ryan,

    We have developed tool for calculating Facebook Ads Cost for our clients. First you need to select business goal, here is the link: http://goo.gl/RVZt3t. Please check the results and share your opinion about the numbers.