It’s no longer a secret: getting good results in Facebook advertising is getting harder and harder over the years. Many companies are abandoning this type of advertising for lack of profitability to focus on other acquisition channels in which to invest their marketing budget…
This decrease in results is due to several factors, but the most important of them is the cost: every year, the cost of running Facebook ads increases.
For example, between 2020 and 2021, the average cost to acquire a click on an ad has increased by 15%, from $0.38 to $0.44 (€0.36 to €0.42) ( source: AdEspresso).
So a 15% increase in cost means you will need to spend 15% more on the platform to maintain similar results to the previous year.
Why are advertising costs increasing on Facebook?
Like the majority of online advertising platforms, that of Facebook (or Meta) sets its prices via auctions.
In other words, rather than selling advertising space at pre-determined rates, as television or newspapers might do, online advertising prices are set entirely by supply and demand.
In this context, supply is made up of users to whom ads can be displayed, and demand is the total budget of advertisers who wish to display Facebook ads.
Thus, there are four possible trends:
- If advertisers increase their investment, costs go up;
- If advertisers decrease their investment, costs go down;
- If users increase their presence, costs decrease;
- If users decrease their presence, costs increase.
You might have guessed it, the main reason why Facebook advertising costs are increasing every year is advertisers’ enthusiasm for the platform.
Although the social network has been established for years, many companies are still beginning to take an interest in online advertising and are only starting out in Facebook advertising.
However, the number of user registrations has slowed in recent years (source: Statista).
So we find ourselves with a growing demand for a stagnant supply. More advertisers who have to share the same number of ad slots.
And we can predict that the increase will continue in the coming years, with the acceleration of the digitization of companies.
01. Broaden your ad targeting
As mentioned above, it is the advertising supply and demand that mainly influences the cost of advertising delivery.
In fact, it’s a bit more complex than that: there’s no one-time cost to broadcast all over the world. Supply and demand vary with each Facebook user.
So, depending on your industry and your target audience, the costs could vary. For example, WordStream measured that in finance, an average click cost $3.77 (€3.57), while in retail, a click cost $0.70 (€0.66).
In other words, the more you seek to reach a specific target and in demand by other advertisers, the more the costs could increase.
Thus, an effective way to reduce Facebook advertising costs is to target a wider audience. This way, you’ll be less in fierce competition for ad serving, and can reach more people at the same cost.
Of course, a broadening of the target also means that your advertisements may appear to a less qualified audience. However, this is not necessarily problematic.
If your business is in a “mainstream” industry, you won’t have trouble generating results with a wider audience. Even if your conversion rate drops, the lower delivery costs will compensate and you’ll still get more results.
That said, if your company is aimed at a very specific niche (especially a business target), it is possible that broadening your targeting will harm your results, despite the reduction in costs.
If this happens, you can pivot your advertising strategy to make good use of this reach to a wider audience, such as advertising for your general awareness, or redirecting to another ad network, like LinkedIn. .
02. Expand your investments
As mentioned earlier, each user can cost more or less depending on the competition from advertisers for their profile.
It does not stop there: we observe the same phenomenon with the different advertising placements. Indeed, each location where you can display an advertisement faces auctions, and not all locations have the same demand.
For example, here are the costs obtained for each location at one of our customers:
We can see that depending on the network (Facebook, Instagram or the network of partner Audiences), the location (news feed, right banner, stories) and the device (desktop or mobile), the delivery cost can be drastically different.
Once again, the solution is not to target only low-cost investments because these are the ones that give the least results.
The best way to show up on the right placements and get the best cost and results is to select them all.
Rather than figuring out which locations are right for you, let Meta’s algorithm find the best results for you.
Thus, you will be displayed in the places that can give you the best possible return, according to its cost and its potential results.
To select all placements, simply check the “automatic placements” option in your ad set.
03. Improve your advertisements
Finally, the best option to reduce your advertising costs is to face the problem upside down and improve your results.
If costs increase by 20%, but you manage to optimize your ads to increase your result rate in the same way, you will see stable results over time.
To improve your ads, however, there is no miracle recipe: you have to test.
Also, be sure to post ads of different types (image, video, carousel, etc.) and with different marketing angles.
For example, advertisements of the type User Generated Content (UGG), either with content created by your users, as well as video content tend to generate good results.
In addition, you should know that the cost of distributing your advertisements is influenced by their content. In other words, depending on your advertising, Facebook could benefit you and reduce your costs, or penalize you by increasing them, based on the quality of the advertising you want to broadcast.
By displaying ads on Facebook and Instagram, Meta seeks to strike a balance between make profit and bother people with ads.
On the one hand, if they don’t display ads, they won’t be able to make sales. But on the other hand, if they post too much, users will leave the platform, which will also hurt their income.
Thus, Meta seeks to prioritize advertisements that do not have a negative impact on users, i.e. advertisements that do not look like it.
If your ads are disturbing, selling false promises, or taking away value from the user experience, your costs will increase. And conversely, if your ads get a lot of positive interactions and feedback, they might be favored by the platform.
In short, make sure that your advertisements do not include too many “traditional” advertising codes that are seen and reviewed by users.
About the Author
Charles Davignon: I eat online advertising, and I drink decaf. I founded Antilope in 2018 to promote bold and unifying brands.
YouTube-Instagram-LinkedIn-TikTok