As Australia’s #1-rated marketing agency, we’ve spent millions of dollars on social media ads in 2022. On Facebook, our clients regularly see ROAS of 400%+ (making A$4 in revenue for every A$1 spent on FB ads).
But as profitable as FB ads can be, how much do they cost?
How much do you pay per click, per impression, per conversion… And how much should you expect to spend per month for a profitable campaign?
This guide has the answers! Read on to learn what factors determine the cost of your ads and how to reduce your ad spend.
How much does it cost to run Facebook ads in Australia?
The exact costs of Facebook advertising depend on the bidding model of your ad campaign. Here’s a look at the average cost of advertising on Facebook based on each bidding model.
|Bidding model||Average cost|
The two most popular bidding models are CPC and CPM. The low cost of a CPC campaign (A$1.61/click) might look tempting. But remember: your campaign could get a lot of clicks and not make your business any money.
Many companies use the CPM bidding model for their marketing efforts. The average CPM for FB Ads in Australia can range from A$10-A$20+ for quality traffic. But as with CPC, you might get impressions but now downloads or conversions.
Costs vary greatly from niche to niche. Popular consumer niches like skincare can have CPMs as high as A$60-A$80. CPM and CPC costs can be even higher in financial or insurance industries.
What’s the cost of running a Facebook ad campaign?
We recommend having a monthly marketing budget of A$3000 minimum for Facebook Ads.
A$3,000 lets you spend money on high-intent users who buy and bring in money. It also gives you enough budget to run experiments and optimize your campaigns.
Should you spend more than A$3,000? Not necessarily. Start with a small-to-moderate budget around that sum first. Once you start seeing ROAS increase, pump more money into the campaign to see more money.
How much does it cost to have someone manage my ad campaign?
Expect to pay 20-50% of your ad budget to have someone manage your ad campaign. For example, if you’re using A$5,000/month of ad spend, count on paying A$2,000-$3,000 for ad management.
If that seems expensive, remember this. You’re paying someone to optimise your campaign and make sure it delivers maximum revenue each day. This usually offsets the price of Facebook ad management.
Here are a few hypothetical ways you could split up your ad budget if someone else manages it.
|Ad spend||Campaign management costs||Total ad campaign expenses|
If you have a mega-sized ad budget, the management percentages can lower a bit to 15-20% (paying someone A$10-15k to run advertising for A$80-100k).
Should I pay someone to manage my Facebook Ads?
Is it worth it to have another company manage your social media advertising campaigns? Let’s take a closer look at the pros and cons.
- A professional company has more expertise. Megaphone spends millions of dollars on ads each month. We know what works and how to deliver the maximum ROI to our clients.
- It’s easier for the pros to know when ads aren’t working. If that happens, these experts can adjust or scrap non-converting ads.
- Because of their experience, Facebook ad experts immediately get your campaigns off to a good start.
- Managing your ads and campaign objectives can take a lot of time. Outsourcing lets you focus on other parts of your business.
- It costs money, but so does running Facebook ad campaigns on your own.
- If you force a company to run campaigns without letting it perform any optimizations, ad campaigns can continue performing poorly.
- Low-quality ad management companies can burn through your budget.
It’s best to have a company run and manage your ads. That’s why so many people let Megaphone take care of their Facebook ad campaigns – we focus on your ROI to provide the best possible results.
9 components affecting the cost of a Facebook ad
Many factors determine how much you’ll spend to run ads on Facebook. Understand these factors to potentially lower your ad costs.
1. Your bid amount
A bid amount is how much money you’ll spend on an ad. As mentioned earlier, your suggested or best bid amount varies based on your bidding goal.
2. Bidding strategy
You control how much you’re willing to spend on Facebook ads.
Spending too little will rarely get your ads shown. Paying too much can deplete your daily budget fast. Fortunately, Facebook provides bid estimates that show you an optimal amount of money to spend.
If you want to avoid manual bidding altogether, Facebook also offers automatic bidding. You tell Facebook how much money you want to spend, and Facebook automatically bids on ads.
3. Target audience
Your target audience is who will see your Facebook ads.
Trying to target everyone is usually inexpensive but rarely effective. As you narrow your list of potential customers based on their interests, age, and other demographics, the cost to reach this new audience will increase.
We recommend finding a good balance between finding a highly targeted audience with a fair CPM.
4. The budgets of your competition
Since Facebook has an average conversion rate of 9.21%, it’s safe to assume your competitors also use Facebook ads.
The prices other advertisers spend on Facebook ads affects how much you’ll need to spend to show up alongside them.
5. Ad placement
You can place Facebook ads in many locations. Where you choose to have Facebook place your ads (in-feed, right-side, Reels) can decrease or increase how much money you spend on ads.
6. Relevance score
As a business, Facebook wants to be a social media platform that shows relevant content to its massive audience. This content also includes what comes from its advertisers.
Facebook uses a performance-based metric called a relevance score based on how an ad performs.
Users of Facebook see ads with a high relevance score more often than other ads. Ads with low relevance scores aren’t shown as often and may cost more to continue running.
7. Time and day of the week
Almost all advertising platforms have peak and non-peak hours. In Facebook’s case, a broader audience uses this platform during its peak hours.
It might cost more money to run ads on Facebook during peak hours. It typically costs less money to run Facebook ads during non-peak hours.
According to AdEspresso, Facebook CPC costs are the least expensive on Sundays and the most expensive on Fridays.
8. Estimated action rate
An estimated action rate is Facebook’s way of using past data to estimate how well your ad will perform.
Did you know Facebook ads cost up to 25% more to run during the 4th quarter of the year?
Keep an eye on seasonality and ad costs over time as you plan your campaigns.
How to minimise Facebook advertising costs in Australia
The less you spend on ads, the higher your margins. Keep your ad spend low and profits high with these Facebook ad hacks.
1. Experiment with small budgets
Constantly experiment with new creative and targeting using small budgets. Then, as you find which digital advertising campaigns work best, allocate larger budgets to those campaigns.
This strategy lets you risk little to find profitable Facebook Ads campaigns.
2. Split test
Split testing is running new ad variations, usually changing one element at a time
Examples of split testing:
- Changing out ad copy
- Swapping ad images
- Switching up your CTA
Split test often to see which ad variants perform the best with your target audience.
Shut down ads that don’t work
Use Facebook Ads’ analytics to monitor how your ads perform over time. Compare your ads with each other and shut down or pause non-converting ones.
Check out Facebook’s Ad Library for inspiration.
3. Set a limit for your ad spending
Don’t worry about Facebook advertising costing you a fortune. Facebook has account spending limits to prevent overspending. Once you reach your limit, Facebook pauses all your ads.
The Most Important Thing to Consider
We hope this guide helps you understand Facebook advertising costs in Australia. With enough time and dedication, your business can gain many potential customers through
Schedule a free Facebook Ads strategy session today.
Frequently asked questions about Facebook ad costs in Australia
Have a few questions about running ads on Facebook? Here are the answers to a few commonly asked questions about Facebook ad costs in Australia.
1. What’s the average cost of running a Facebook ad?
Using the information from our table above, assume you run ads with a CPC of A$1.61.
If your ad receives 10 clicks a day, you spend A$16.10 per day.
A$16.10 per day x 30 days = A$483 per month.
Your exact costs will vary depending on the industry and keywords you target.
2. What’s the ROI for a typical paid Facebook advertisement?
Knowing your return on investment (ROI) from Facebook Ads helps you get the best results at the lowest costs.
Here’s a classic business equation you can use:
Equation: revenue (profits from ads) – cost of goods sold (ad spend) / cost of goods sold = ROI
Here’s a step-by-step look with actual numbers:
A$2,000 (profit from ads) – A$500 (ad spend) / A$500 (cost of goods sold) = 3 (ROI)
Step 1: Subtract 2,000 – 500 = 1,500
Step 2: Divide 1,500 by 500 = 3
3. What is boosting a post?
People commonly confuse boosted posts and paid ads. Boosted posts are paid ads based on organic content you previously created.