Facebook Ad Costs - How much does Facebook advertising cost in eCommerce?

Facebook ad costs involve a lot of variables. You can set your target audience by location, demographics, interests and behaviors. You can also set the time period of your campaign as well as how much you're willing to pay per click or impression. These factors determine the cost for running an ad on Facebook which is determined by demand using Facebook’s auction model.

In this blog post we'll review what goes into the formula and how it determines who pays what based on supply and demand in the market!

Facebook ad costs - how the Facebook ad auction works

- Decide your target audience by location, demographics, interests and behaviors.

- Set the time period of your campaign as well as set a budget for it. This will determine how much you're willing to pay per click or impression. These factors all come into play when determining the cost for running an ad on Facebook.

- The price you pay is determined by how many other brands are bidding for that audience at that time, as well as how enticing your ad and offer are to the audience. Facebook will give you exposure to more and better audiences if your ad creative is really strong.

Facebook ads are one of the most effective ways to reach your target audience with a relevant message at just the right time, but it can also be extremely expensive if not managed properly.

How much on average does it cost to gain a customer?

We are an eCommerce agency and only work with product brands - we spend many millions of dollars per year on the Facebook ad platform for our clients - so we can only speak authoritatively about the eCommerce industry - but here are some averages to give you an idea.

We tell clients that they will usually pay around $1-$2 per click and depending on their conversion rate it would take between 20-100 clicks to drive a sale. If your conversion rate is 5% you can get a sale for as little as $20 but if your conversion rate is only 1% it might cost you $100 dollars to generate a sale!

Typically - we see between a 3X and a 10X return on ad-spend for our clients - meaning for every $1 in they typically get back between $3 and $10 in tracked revenue.

So if your average order value is $100, you can expect to pay between $10 and $40 to acquire a customer - and it all depends on your conversion rate.