No matter how long you have been running Facebook Ads, or if you are just starting out, the cost of the ads is an important consideration.
Facebook has billions of users all over the world in every demographic, so it is a great place for brands to spend their advertising dollars. To help them do this, Facebook provides advertisers with powerful tools that enable them to fine tune their campaigns in order to get the most value for their money.
The cost of advertising on Facebook has been going up for a few years now. This is because Facebook Ads have become more popular. This can be a risk for brands, because if their ad campaigns aren’t successful, they could lose a lot of money.
The problem with these types of ads is that even if they don’t completely flop, the money spent on them may not be enough to return an investor’s ad investment. It’s easier said than done but not impossible. There are a number of ways that you can reduce your Facebook Ads cost, and we’re going to take a look at some techniques for doing so today.
How are Facebook Ads costs calculated?
Before we dive into the techniques to reduce facebook ad spend, we need to understand the factors that determine how much Facebook charges for ads. The social network sets prices based on real-time auctions that are powered by AI algorithms. These algorithms look at things like location, interests, and ad placements to reach a final cost. For example, brands will pay more for a campaign targeted to users in the United Kingdom than for those in Thailand. The time of year also has an impact on ad costs. During peak shopping seasons, the average CPMs tend to jump by double digits.
You also need to think about competition. There are a lot of businesses that are trying to get the same people to see their Facebook posts. This means that the prices for ads go up, and all things being equal, the people who pay more get will be prioritised by Facebook’s AI algorithms.
It’s also worth keeping in mind that you are competing against other businesses for the same Facebook audience. This drives up the prices for everyone, as the auction model prioritises those who pay more.
The highest bidder usually wins ad placement, but there are other factors that weigh in as well. Relevance is one of them- Facebook wants to make sure its users see ads that are relevant to them, so it tries to find a balance.
Tips to reduce your Facebook Ads costs in 2022
1. Use the Campaign Budget Optimisation feature
Facebook offers a feature called Campaign Budget Optimisation that helps advertisers optimise their campaign budget. When this feature is turned on, Facebook’s ad algorithm will decide how to split the budget for your ad campaign. It will distribute the budget across ad sets, depending on your delivery optimisation choices and bid strategy.
Once you have set the total budget for your campaign, this feature will then distribute it among the ad sets, favouring those that are performing better than the others. Keep in mind that this feature is different from split testing.
Campaign budget optimisation means that Facebook will spend more money on ad sets that are doing well and less money on ad sets that are not doing well. This can help prevent your budget from being wasted on ad sets that are not successful.
2. Use fresh ad creatives at least once every month
If the cost of your ads is increasing, you can try refreshing the ad creatives. Facebook’s ad algorithm prefers new ad creatives better than old ones, so it will spend less money on pushing them in people’s news feeds.
Many marketers think that changing creatives every month is enough. The advice for ads with a higher budget is that if the statistics show that it is getting more expensive, then you should test changing creatives even sooner.
Please remember, you only need to use this if the stats show that the ad costs are rising. If your campaign is delivering conversions quickly and at low costs, then there is no need to change it. No need to fix something if it’s not broken.
3. Improve audience targeting
You need to target the right people for your Facebook ad campaign to be successful. If you target the right people, your ad will reach its goals and it will do this at a low cost. Even if your ad is great, if you don’t target the right people it won’t be very effective.
When selecting the audience for your ads, try to find people who are more likely to be interested in them and actually engage with them. You may need to test new audiences to see if they are interested in your message and engage. You should also use the ad targeting features to exclude sections of the audience that are not relevant, so you don’t waste impressions showing your ad to people who are not interested.
Work on improving your audience targeting to achieve a higher click-through rate (CTR) for more conversions. By doing so, you’ll be able to lower your CPM (cost per thousand impressions), which will in turn lead to a higher return on ad spend (ROAS).
4. Don’t sleep on lookalike audiences
Facebook offers its advertisers a powerful tool called lookalike audiences. Facebook’s algorithm can find new audiences that are very similar to the audience that has already taken a certain action related to your business, such as visiting your website or purchasing a product.
The algorithm will use this data to find new audiences that are similar to the audience that has already engaged with your brand. The source audience can come from a custom audience that you provide Facebook with or you can also use the Facebook Pixel to collect data.
The source audience helps inform the algorithm so it can find people who share similar attributes and therefore more likely interested in what you are selling. This is more efficient than trying to find new people without any direction.
5. Capture leads with retargeting
Converting cold traffic, or people who have never heard about your brand before, is extremely difficult. Brands in almost every industry struggle with this. It is rare for someone to buy a product after seeing just one ad for it online.
Through retargeting, you can put ads in front of people who have already interacted or engaged with your brand. Retargeting allows you to continue to capture their attention and if so desired, even provide them with an incentive such as a special discount to get them to convert.
Retargeting is less expensive than advertising to a cold audience. If done correctly, it can help improve your click-through rate (CTR) and conversions.
It’s not impossible to reduce Facebook Ads cost
It may seem difficult at first, but if you follow these steps and other best practices, it is possible to reduce the cost of Facebook Ads in 2022. Competition will continue to increase and ad rates will go up, but there is always room for optimisation.
Brands should not lose faith in Facebook ads yet because they provide an incredible opportunity to reach new customers across the globe at a scale that few other social networks are capable of matching.