Facebook is a highly attractive platform for advertisers due to its strong targeting capabilities and budget-friendly pricing, among other benefits.

It’s important to note that your Facebook ad expenses will fluctuate depending on several variables, such as your target audience, industry, campaign goals, and optimization settings.

Typical cost per action on Facebook According to Dan Rohsler, a social account manager at the digital agency Power Digital Marketing, it’s reasonable to anticipate cost per thousand impressions (CPMs) to range from $5 to $10, while cost per click (CPC) usually falls below $2. Similarly, Kevin Miller, director of growth at the home-buying app Open Listings, suggests that a safe average cost per click on Facebook for most companies is $1.50. Peter Messmer, director of growth and strategy at the conversion optimization platform AddShoppers, adds that CPC costs for retargeting typically fall between $0.75 and $1.25, with cost per acquisition (CPA) costs for retargeting ranging from $5 to $10. These costs are competitive and manageable, even for businesses with limited budgets.

Nine strategies to reduce your Facebook ad expenses

Let’s explore nine practical steps your brand can implement to optimize your Facebook ads and achieve lower-than-average costs.

1. Refine your target audience

Update! Due to privacy updates shrinking audience sizes, you might need to broaden your targeting. Find all the Facebook ad targeting advice you need here. Ben Cook, marketing director of social media agency JC Social Media, advises advertisers to be as specific as possible when defining their audiences. “When you narrow your target audience, you can significantly reduce competition from other brands targeting a similar demographic,” he explained. “Remember that you’re competing with numerous other brands – only bid on those you truly want to engage.” Cook emphasized that this approach increases the likelihood of promoted content resonating deeply with target individuals. “It allows you to customize ads to appeal to people within a specific demographic, geographical location, and set of interests, maximizing your chances of getting clicks and gaining traction,” he added.

This strategy proved successful for children’s book brand Clever Tykes, which worked with JC Social Media to focus on mothers of children aged six to nine who were also self-employed or business owners, rather than simply targeting parents with children in that age group. (Cook co-founded Clever Tykes.) “While targeting a broader audience yielded good reach metrics, click-through rates and conversion rates remained low,” Cook said. “Conversions only improved once we refined the target audience to those who perfectly aligned with the brand. By ensuring the content, tone of voice, and product resonated with the target audience, all key metrics showed improvement.” This success is partly attributable to the limited inventory and high ad costs associated with targeting a highly sought-after audience, as explained by Timothy Masek, senior growth strategist at growth marketing agency Ladder Digital. “Targeting a segment with fewer advertisers vying for ad space – such as international markets – can lead to lower ad costs,” he added. Masek also highlighted that Facebook adjusts ad pricing based on relevance.

“To reward advertisers for providing valuable content to Facebook users, Facebook will lower your ad cost if your content is relevant to your target audience,” he said. “This relevance is measured by Facebook’s quality score.” Free guide » 7 Essential Facebook Advertising Tips for every advertiser.

2. Implement bid caps

Katy Lowe, social media executive at digital marketing agency Passion Digital, offered a contrasting perspective: The more granular the audience targeting, the more expensive the results tend to be. This is because Facebook, recognizing the value of reaching your most valuable audience, charges a premium for this service. Lowe explained that Passion Digital addresses this for its clients by employing rules and bid caps, especially for app installs, determined by the lifetime value of each lead or sale. Discover more ways to lower your Facebook ad costs (quickly!) with our Free Facebook Ads Performance Grader.

3. Identify audience overlap

Phillip Reinhardt, CEO and cofounder of digital marketing agency PBJ Marketing, suggests using the Facebook Audience Overlap tool to determine if there is significant overlap between audiences. If so, select the audience most aligned with your marketing objectives. “If overlaps exist, mutually exclude those audiences to avoid competing against yourself in the bidding process,” he added. PBJ Marketing implemented this approach for the University of Maryland’s Master of Professional Studies in Technology Entrepreneurship program, which targets part-time students and focuses on entrepreneurs and startup founders in the US. “We initially created two distinct audiences: individuals living in the United States interested in ‘Entrepreneurship’ and those interested in ‘Startup Company.’ We then promptly conducted an audience overlap check on Facebook,” Reinhardt said.

“The results showed that nearly 50% of the ‘Startup Company’ audience was also interested in ‘Entrepreneurship,’” he explained. “Without any audience exclusion, running a campaign targeting these two audiences in separate ad sets with a hypothetical cost per click of $0.10 could lead to wasting up to $220,050 due to internal bidding competition.” To optimize the campaign, Reinhardt excluded the interest in entrepreneurship from the startup company audience and vice versa. After rerunning the overlap tool, the result was 0%.

Addressing audience overlap is crucial because a high percentage indicates you are essentially competing against yourself in the Facebook auction to reach the same individuals. “Not only are you advertising to the same person multiple times, but you’re also incurring higher costs to reach them due to internal competition,” Reinhardt explained. Maintaining low or no overlap allows for effective A/B testing of different audiences and customizing bids based on each audience’s ROI. “For low-intention audiences, we keep bids lower,” Reinhardt said. “For remarketing audiences or converters, we bid higher. This ensures we’re not overspending on individuals with lower interest levels.” For those interested in both categories, Reinhardt suggests creating a dedicated audience that encompasses both criteria:

“By running the audience overview tool one last time for all three audiences, we achieve a perfectly segmented group,” he added.

4. Implement the Facebook Pixel

Important note! The Facebook Pixel is becoming less effective in the wake of iOS 14 and the decline of cookies. Learn how (and why) to set up the Facebook Conversions API here. Morgan McGregor, photography and online content specialist at social media marketing firm Hyped, emphasizes the importance of setting up the Facebook Pixel. This code snippet, inserted into your website, tracks conversions and provides valuable client data. “Not only can it track who your clients and visitors are, even linking them to their Facebook profiles, but it also gathers detailed information, such as their interests, location, number of children, income level, recent purchases, average purchase price, and upcoming travel plans,” McGregor explained. This granular data enables marketers to target individuals who are ready to make purchases. “You can retarget individuals who have visited your website and even narrow it down to specific actions they took, such as those who added items to their cart but didn’t complete the purchase,” she added. The Facebook Pixel also allows brands to identify high-performing ads driving sales, enabling strategic budget allocation. “It also facilitates the creation of dynamic sales funnels [for Top Of Funnel, Middle Of Funnel, and Bottom Of Funnel] that can generate passive income – a dream scenario for any business,” McGregor added.

5. Experiment with different creative elements

Cook also recommends experimenting with your Facebook ad creative to identify the most effective executions. “Facebook ad sets allow for running multiple ads concurrently with the same budget,” he said. “Even with a deep understanding of your audience, subtle variations in imagery, copy, and call to action can significantly impact results over time.” He elaborates: “Testing different combinations of text and images helps identify trends in ad performance. By incorporating the best elements from high-performing ads and eliminating weaker elements, you can optimize your ad campaigns based on data. This data-driven approach ensures maximum value from your ad spend.” Facebook Ads coach Monica Louie shared her approach, which involves testing the image first, followed by the headline and ad copy. “It’s remarkable how a simple image change can significantly influence costs,” she said. “Following this specific testing order helps minimize costs and boost conversions.” Even minor improvements in click-through rate and conversion rate can have a substantial long-term impact on ROI. The following ad sets from a B2B client demonstrate how JC Social Media lowered CPC using this testing methodology.

High cost per click

Low cost per click

6. Leverage retargeting segments

Messmer strongly advises segmenting website visitors based on engagement levels to create more effective retargeting segments within Facebook. “We utilize a custom retargeting algorithm that automatically categorizes your website visitors into low, medium, and high engagement groups, pushing those audiences to any ad network,” he explained.

Jason Parks, president of digital marketing agency The Media Captain, shared his strategy of using dynamic retargeting and retargeting advertisements to generate sales at a low cost per acquisition on Facebook. For a comprehensive guide to Facebook remarketing, check out nexus-security’s resource.

7. Create a separate audience for your fans

Reinhardt recommends segmenting consumers connected to your Facebook page into a dedicated fan audience and creating tailored campaigns for them. Simultaneously, exclude existing Facebook fans from other audiences. A similar approach can be applied to website visitors and converters. This strategy stems from the observation that Facebook fans typically exhibit the highest engagement and conversion rates, he said.

“By creating a separate audience for Facebook fans, we can ensure they are all reached effectively,” he added. Reinhardt cited an example of a nonprofit client running a fundraising campaign. The segmented Facebook fan audience yielded a cost per conversion of $1.16 and a return on ad spend (ROAS) of $56.58. In contrast, the interest-targeting audience (excluding Facebook fans) achieved a cost per conversion of $98.45 and a ROAS of $2.22. “As the fundraising campaign progressed, we strategically reduced the daily budget and bids for interest targeting, prioritizing high-return audiences,” he said. “A well-segmented account allows us to clearly identify opportunities and allocate our client’s budget to the most effective audiences.”

8. Regularly refresh your creative assets

Miller suggests refreshing your Facebook ad creative every two weeks to combat ad fatigue. Jomel Alos, online PR lead and content marketing strategist at digital marketing company Spiralytics, agrees. “One of the most common mistakes we see among our clients before they partner with us is neglecting to refresh their ad visuals,” Alos observed. “They often fail to monitor ad frequency after identifying a high-performing ad, leading to ad fatigue – the point at which the audience becomes overly familiar with the ad.” This can result in a significant decline in ad performance and hinder scalability. Alos pointed to a case study what he considers a healthy campaign, demonstrating consistent CPC/CTR/CR and CPL for the first six days. However, on day seven, CPC and CPL started to rise as the target audience had already been exposed to the ad an average of four times. Spiralytics, in a blog post, explained that as user clicks decline, Facebook’s revenue from the ad decreases, prompting the platform to either stop showing the ad or increase the advertiser’s cost. To prevent this, advertisers should monitor ad-level conversion metrics daily. Spiralytics suggests that after running a few ads, advertisers will develop an understanding of their average impressions per person before ad fatigue sets in. This metric can be tracked in reports, allowing advertisers to pause ads as they approach the fatigue point.

9. Utilize video content

Damon Gochneaur, founder and managing partner of digital marketing firm Aspiro Agency, recommends incorporating video content whenever possible to reduce Facebook advertising costs. “On average, video ads cost 10% of what carousel or single-image ads cost,” he explained. “For the same target audience, we typically pay between $0.15 and $0.50 per click for video campaigns, while single-image ads can cost $2.00 or more per click.” Lowe echoed this sentiment, emphasizing that Facebook prioritizes video content in ads, granting videos greater impression share and, consequently, lower CPCs. “For smaller clients with limited budgets for dedicated video ad production, we often leverage Facebook’s built-in tools to create slideshows using product or service imagery. These slideshows can then be downloaded as video content optimized for Facebook video ad specifications,” she added.

Additional ways to lower Facebook ad costs

The ever-evolving landscape of ad platforms requires advertisers to stay agile. Consider these additional resources to help you control your Facebook ad expenses:

• 15 Ways to Lower Your CPC in Google and Facebook Ads
• 7 Ways to Combat Rising Facebook CPMs Post-iOS 14
• 7 Budget-Wasting Facebook Ad Mistakes to Avoid