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How to maximise your ROI on your Facebook advertising costs

Facebook advertising expenses vary widely and are determined by a variety of criteria, including your business, region, and goals. With more businesses paying for Facebook ads and Facebook restricting the number of ads displayed, quality and targeting are critical.

In this article, we'll go over essential terms used in Facebook advertising as well as tactics for optimising your budget.

  • Definitions of advertising

  • Cost-affecting factors

  • Creating a marketing budget

  • Reduce your expenses.

Any size business can profit from Facebook ads. There are numerous targeting choices available, and the ROI for any ad is simple to determine. Furthermore, your ad budget is changeable, so your limit will be honoured and can be modified at any time.

The most common error that businesses make when first starting with Facebook advertisements is mistargeting their audience. You don't have to be overwhelmed by all of the possibilities available. Continue reading to learn more about optimising your Facebook advertising expenditures and getting the most out of the platform.

Definitions of Facebook advertising

Facebook advertising has its lingo, which you should become acquainted with before embarking on your campaign travels. You will only be charged for your campaign goal, although an ad may be interacted with in other ways. Boosting a post for engagement, for example, still generates a modest Like button that users can click. Only post engagements will be charged to you. Even if the purpose of your campaign is not to charge for impressions, you may still view the average cost per 1000 impressions.

  • Cost Per Click (CPC): Cost per click (CPC) is a paid advertising phrase in which an advertiser pays a publisher a fee for each ad click. If your campaign is set to charge for clicks (users must click on an ad), your measure will be the CPC. The average CPC is $1.72.

  • Cost Per Like (CPL): The CPL is utilised in Like campaigns when a person clicks Like when presented with an ad.

  • Cost Per Mille (CPM): Cost per 1000 impressions. This is most commonly used to assess brand awareness.

  • Cost Per Action (CPA): For campaigns that include specific actions, such as an App Install, CPA is calculated per action. For you to be charged, the user must click the button.

  • Relevance Score: Only applicable to advertisements, this estimated score ranges from 1 to 10. It appears only once your ad has received more than 500 impressions and is determined by how your audience responds to the ad.

  • Frequency: An estimate of how frequently a user will see your ad. This figure is calculated by dividing total impressions by reach (total unique users). Ad weariness may be indicated by high numbers.

  • Cost-affecting factors

Numerous elements influence the overall cost of Facebook advertising. Keep these important considerations in mind while creating a budget. Other cost-influencing factors include your nation, audience age groups, gender, and ad placement.


Costs might be influenced by your industry. A hobby crafts firm may have a cheaper advertising expense than an obscure agricultural production tool.

WordStream discovered an average CPC of $1.72 across all industries. However, within the industries analysed, the CPC ranges from $0.45 in fashion to $3.77 in finance and insurance.

Time of year

The expense of advertising or running a campaign on Facebook is significant. When Q4 and the holiday season arrive, you'll be competing with many more enterprises, which will raise your costs. Keep this increase in consideration when creating your annual budget.


Your campaign goals are important. Because it takes more user buy-in, an app installation frequently costs more than a post-engagement.

Statista discovered that product catalogue sales cost the most, at $4.77 CPM, compared to the least, at $0.48 CPM, with the brand awareness target.

Facebook objectives are broken down into three types:

Awareness: This goal, which includes Brand Awareness and Reach, is intended to build interest in your product. You will be paid in CPM. For new customers, copy and creative are typically written.

Consideration: This includes various varieties. Traffic, engagement, app installs, video views, lead generation, and messages are all included. You will be charged in CPA. This type of goal is intended for clients that are already familiar with your product and want to learn more. You can even set it up for new consumers, but keep in mind that you're asking them to take action on the advertisement.

Conversion: Conversions, Catalogue Sales, and Store Visits are all part of this goal. This will be paid for in cost per conversion, or CPM.

Setting a Facebook advertising budget

Outline your goals for a marketing initiative at the start of any budgeting session. Do you want to enhance your Facebook fan base or your website shop conversions?

Knowing which aim to address will help you choose an objective. As previously stated, objectives have varying costs.

Set a lower budget cap when building your campaign for the first time so you can see how the ad performs. You can set a daily budget cap or a lifetime cap. Both categories can be changed as the campaign progresses.

Decide on your bid strategy next. Your ad will be competing with thousands of others at the same time. You can specify a low-cost bid strategy, which Facebook will determine for you. With an optional bid cap, you'll obtain the most conversions per budget. Set a number for a target cost, and Facebook will bid around that amount. This may be more expensive in the near term, but it will be more stable in the long term. Your bid strategy options will change depending on the objective you select. Only lead generation, app installs, conversions, and catalogue sales have a target cost.

You can find more strategies to minimise your expenditure by expanding the advanced choices in the Budget & Schedule section. This viewpoint will differ depending on the objective you select.

If you discover that you are spending more during a specific period, it may be beneficial to set a schedule for the ad. This is only an option for lifetime budgets. For time-sensitive advertisements, a schedule is ideal. Advertising for a happy hour, for example, will be less effective at 3 a.m. than at 1 p.m., when clients are making decisions about their evening activities.

Finally, decide on your advertising copy and creative. You don't have to pay Facebook for this, but creating your ad wording and creativity takes time and money. Get ideas from other companies advertisements. If you've worked hard to create adverts, optimize the visuals, and change the location. Your ad will not be universally successful across Facebook's whole advertising network, so don't worry about creating one-size-fits-all media.

Reduce your Facebook advertising expenses.

Starting with Facebook advertisements is a game of trial and error. Your company's ads on Instagram Stories may be more successful than those on Facebook Newsfeed. Alternatively, your target group may be more receptive to a video ad than a carousel ad. However, when it comes to cutting costs, some things are universal.

Make several audiences

One of the most crucial aspects of any Facebook ad is the audience. A broad undefined audience will not respond to your ad as well as a well-targeted one. The more you segment your audience, the more successful you will be in determining how they respond to your adverts. You can find your stored audiences in Ads Manager's Audiences tab.

There are several methods for building an audience on Facebook:

  • Target audience: You can apply demographic constraints to your audience while establishing your ad campaign. You may also save and name this group of people.

  • Custom audience: Create and save a bespoke audience made up of previous customers or website visitors. The website visitor audience necessitates the use of a Facebook Pixel and is most effective in retargeting advertising.

  • Lookalike audience: Using your existing audiences, Facebook will search for people who are similar to the audience you selected. This is an excellent approach to broaden your audience types.

You can have multiple ad sets in a single campaign. You can assess how much budget to distribute for each variation. This budget management method is ideal if you want to display the same ad to multiple audiences while keeping the budget changeable.

Having a diverse audience gives you additional alternatives for who to target. It also reduces ad fatigue for your fans.

To see if your audiences have excessive overlap in your ads, use Facebook's Audience Overlap tool. This may be found in the Audiences section of your Ads Manager. To compare saved audiences, select any of them. This is especially useful when you're running numerous commercials at once and don't want your viewers to get tired of viewing the same video over and over.

A/B split test your ads

Use the A/B testing option to see what works best for you. To accomplish this, choose a marketing objective and conduct a split test. This is an excellent way to get your feet wet in the advertising industry without investing too much money.

Facebook will A/B test your ads automatically based on creative, delivery optimisation, audience, and placement. When you set it up, you'll be able to specify your budget, split (even or weighted), timetable, and duration. If you're not sure which audience or placement to utilise with your new ad, an A/B split will help you decide and save you money in the long run.

When the test is finished, Facebook will send you an email with the findings. If a winner is found before the time limit, the test might be terminated early.

Adapt your inventiveness

Facebook is a visual-first advertising platform. When scrolling through your Newsfeed, images and videos work great. Users are more likely to notice innovative media before reading the linked copy. Use this to your advantage by upgrading and optimising your material for the spot you desire.

If you select a single photo format for your ad, you can upload up to six images. Facebook will then run A/B tests on the images for you. Each image becomes its ad, and you can observe how each one performs. When there are many photos, the budget will adapt to favour the best-performing one.

According to Sprout's social advertising analysis, 41% of ad audiences favour an entertaining ad and 37% will engage with offers. Make use of this while crafting advertisements for products that aren't often "entertaining."


For newcomers, Facebook advertising might be intimidating. Even as you grow more acquainted with the software, new features are added monthly. There are numerous ways to target and modify your advertisement. We propose focusing on a single goal and honing your audience and creativity to determine if it's a good fit for you.

Track your campaigns in Ads Manager as you progress, and respond to comments with a tool like Sprout Social. You won't have to divide your social team's attention between replying to comments on your advertising and ordinary comments with this strategy.

Campaign performance can be tracked using the Tag Report. This includes your social ads as well as any hashtag efforts.

In short, don't be hesitant to try out new Facebook advertising. There is no harm in A/B testing, reaching out to different audiences, or limiting your budget. You'll be able to limit your spending and analyse the results to improve your ROI.

We hope you found this information useful. DigitalxMarketing is dedicated to giving Business Owners, Executives, and Marketers Digital Strategy, Training, and Education. We offer the world's most advanced digital marketing training as well as cutting-edge tools and resources.

DigitalxMarketing Ltd has its head office in Wellington NZ with its support and resource centre based in the Philippines. DigitalxMarketing implements the latest digital strategies, tactics, tools, platforms and technologies to deliver integrated digital marketing services so your digital footprint can be found online.

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