The Facebook Ads platform occupies a unique position on the social media marketing landscape. Even with TikTok, the only rival of Facebook, rising quickly to match its capabilities in advertising, its ad platform yet provides the best reach and targeting options and, after going through lots of iterations over the years, its dashboard is easy to use and it serves millions of marketers around the globe. In fact, for any startup that launches a new product or service and needs to reach its potential customers, Facebook Ads is one of the two options, Google Ads is the other one, that they have to use to succeed in a market. And knowing what are Facebook Ads cost is essential.
Because Meta, its parent company, also owns Instagram – the leading photo + video-sharing social media platform, WhatsApp – the leading messaging platform, advertisers are provided with a full spectrum of tools to reach multiple generations with specific interests chosen from a very comprehensive list built on data Facebook users provided the platform over the years.
To give you an example of the platform efficiency, running an app marketing campaign via Facebook Ads, app marketers can reach out to females 30-35 years old, who are moved to the city recently and looking for new furniture to buy. It must be said that Facebook’s immense database of information on its users, including their habits, likes, and dislikes has been a double-edged sword. Deliberate malign use of this data lead to many negative consequences and it forced Facebook to reduce the number of different targeting options it used to offer app marketers.
According to eMarketer, in 2021 Facebook Ads held ~23.8% of the digital advertising spending. Last year Apple’s introduction of ATT ad framework with iOS 14.5, which led to Facebook’s loosing of information about Facebook and Instagram app users about their actions off-platforms, made a serious dent in the Facebook advertising revenue and slowed down its growth, only 0.4% in 2022 against 2% in 2021.
Now, to address the question – how much does Facebook Ads cost, we need to explain how its bidding system works first. The platform is built on a blind auction system, which implies that hundreds of thousands of advertisers bid for ad placements, both mobile and desktop, to reach specific audiences. To keep the bidding process fair, while advertisers may choose to set any bid they want if she or he wins the bidding, they will be charged by the system only 1 cent more than the top bid. A quick example would be if the top bid for a particular ad spot costs $1 and the advertiser sets his bid equal to $2, she or he will be actually charged only $1.01. This applies to all business models supported on the Facebook Ads platform, such as CPM, CPC, and CPA.
Essentially, the Facebook Ads bidding platform serves ads, taking into account three major factors:
- a price for a bid advertisers are willing to pay to generate specific events such as view, click, install in-app purchase, or other action. As well as daily budget – how much advertisers are willing to spend daily
- relevance score for each ad, calculated based on how many interactions Facebook users have with a specific ad
- Facebook’s internal algorithm estimates if a specific ad will generate higher engagement if it’s given higher priority against other ads.
To be efficient with a given app marketing budget, you need to understand what factors affect Facebook Ads cost and how to reduce them.
Factors that affect Facebook Ads Cost & how to reduce it
Running a Facebook Ads advertising campaign, one would need to meet two goals – achieve the desirable outcome (e.g. generate sales, registrations, subscriptions, and so on) and do it at the lowest cost.
There is a number of factors that influence a cost of a particular Facebook ad. These go into three general buckets – targeting, placement, and creatives.
Depending on a specific goal, be it driving app installs or raising awareness of a particular brand via ad views, targeting options is what allows app marketers to be either very precise and reach out to a narrow segment of a population or very broad to appeal to a wide range of people. To apply the right set of targeting options, marketers need to have a solid profile of an app user or customer they are after for their brand. Today Facebook Ads provide marketers with the following ad formats – Image ads, Video ads, Poll ads, Carousel ads, Slideshow ads, Collection ads, instant Experience ads, and Lead ads. Without running A/B tests, it’s impossible to define what specific ad format will be the most efficient for a particular Facebook Ads campaign. It’s a given that a certain advertising budget needs to be allocated to run such tests.
Ad placement defines at what specific moment Facebook users will interact with the ad and hence how likely it will persuade them to take a desirable action. There are more than 15 total ad placements across Meta’s multiple assets – Facebook, Instagram, Audience Network, and Messenger. Specifically, ads are displayed in Feeds, Stories, In-Stream, Search, Messages, In-Article, and Apps.
Ad creatives, just like with any other advertising platform, are extremely important because, at the end of the day, the best targeting and placement wouldn’t be sufficient to persuade people to install an app, make an in-app purchase or buy from a brand if the ad creatives don’t appeal to that individual. You can listen to a conversation about ad creatives in one of the episodes of Business Of Apps podcast.
Facebook Ads Cost Statistics:
- Facebook Ads CPM (Cost Per 1,000 views) – $14.9
- Facebook Ads CPC (Cost Per Click) – $0.44
- Facebook Ads CPI (Cost Per Install) – $1.97
- Facebook Ads CPA (Cost Per Action) range – $8…$55
Facebook Ads CPM (Cost Per a Thousand Views)
Analyzing any online advertising platform, one needs to begin with establishing an average CPM (Cost Per Mile or per 1,000 impressions cost). Looking at the last 5 years, we see the average Facebook Ads CPM fluctuating from $11.2 in 2017 to $14.9 in 2021. These numbers represent an average value across multiple verticals and locations, because of the COVID-19 pandemic, in 2020 the rate fluctuated severely, going gown 30% in March from $11.5 in February to $8.82 a month later.
Facebook Ads average CPM, over time
Source: Adstage, Revealbot
Going from the average CPM for the whole market over time to CPM for various business verticals, we get the following picture. According to AdCostly data for Q3, 2021, the absolute leader in CPM rates was US with $35 per 1,000 impressions, followed by South Korea and Australia with $34 and $33.5 respectively. Other countries on the chart offered significantly lower CPM rates, in Canada app publishers could expect $25 per 1k views, $17 in Germany, $21 in Japan, $19 in the United Kingdom, and only $11 in France.
Facebook Ads average CPM, by location
Source: AdCostly
Next up is the benchmark that is highly relevant app publishers that own a portfolio of mobile games. Specifically, let’s review CPM for mobile games.
According to AdCostly data for Q1, 2021, the absolute leader among popular categories of mobile games was Simulation, which allowed game publishers to make $25 per 1,000 views, followed by Adventure and Family which generated a CPM of about $21. The opposite side of the spectrum was presented with Board and Music genres that were capable to bring only $3 per game ads 1,000 views. It’s interesting that the Puzzle genre, which is, according to Statista is the most popular mobile games genre that commands 22% of the gamers’ interest, generated roughly the median CPM value – $13 per 1k views.
Facebook Ads average CPM for mobile games, by genre
Source: AdCostly
Moving from mobile games to non-games, which in 2020 generated $32 billion versus $79 billion generated by mobile games. Despite the fact that the non-games sector is 2.5 times smaller than the mobile games one, it doesn’t mean app publishers can’t make money in it.
In Q3, 2021 app publishers with apps from News, Dating, Lifestyle, and Photo categories were clear leaders with CPM – $14, 11, 10 and $9 respectively. The opposite side of the 20 category non-gaming CPM spectrum belongs to Video Players, Photography, Personalization, and Comics, which generated $1-2 per 1,000 views.
Facebook Ads average CPM, mobile non-gaming apps
Source:
Moving from CPM rates – the favorite benchmark of web and app publishers, because with this model they are paid for ads exposure, regardless if those ads triggered any action or not, to CPC rates – Facebook Ads benchmark that is on the financial radar of any app marketer as one of the factors that define how efficient her or his app marketing budget is being spent.
Facebook Ads CPC (Cost Per Click)
Crunching together the numbers for Facebook Ads Cost Per Click over the last five years, we get the following picture. Despite significant fluctuations we see on the Facebook Ads CPM rates chart for the same period, Cost Per Click rates tends to hover around 40 centers per click, ranging from $0.39 in 2017 to $0.44 in 2021.
Facebook Ads average CPC, over time
Source: Statista, Adstage
Essentially, CPC rates represent app marketers paying capacity and because it correlates with overall economic conditions in a specific country, the picture for Facebook CPC rates in multiple locations looks quite diverse. Hands down the absolute leader is South Korea with $3.75 per click, which dwarfs rates in all other countries on the graph you can see below. The bulk of Facebook Ads CPC for other countries on the graph is congregated around $2, ranging from $1.5 for the United Kingdom to $2.75 for Japan. Some European countries like Italy and Spain, as well as Asian countries such as Malaysia, Thailand, Vietnam, the Philippines, and the only country from South America – Brasil are on the lower part of the Cost Per Click rates for the Facebook Ads platform, ranging from $0.2 to $0.5 per click.
Facebook Ads average CPC, by country
Source: AdCostly
Now, there is a number of objectives that brand marketers can focus their Facebook Ads campaigns on, among these relevant to our analysis are – Brand Awareness, App Installs, and Video Views. With Brand Awareness objective marketers aim at raising awareness of their brands and don’t persuade achieve any specific action such as sales, in-app purchases, subscriptions, registration, and so on. The App Install objective is specifically aimed at acquiring mobile app users and with Video Views marketers are interested in increasing the number of views videos they are promoting are getting.
Looking at the numbers crunched with Revealbot data, we see the following picture. Since 2020 and to this day, the CPC rates for raising awareness are stable – it takes around $2.15 to generate a click that leads to increased awareness about a particular brand.
With App Installs, it’s all over the map – from $0.72 in 2020 to $1.2 in 2021 and back down to $0.54 in 2022. Because much more people turned to mobile to adjust to the new world of COVID-19, the competition shot up like never before, the mobile space became even more crowded than it was before and it lead to CPC rates for app installs to went up as well.
The most dramatic difference in CPC rates for Facebook Ads can be observed with Video Views. The rate for 2020 was $1.18 per click, in 2021 it doubled and reached $2.39, and this year, as of January, it went down to $2.07 per click. To understand such big fluctuations one would only need to look at the rise of TikTok, which has been pulling people away from Facebook and the video content they can see on that social media giant. This trend leads to a big increase in CPC for video views.
Facebook Ads average CPC, by campaign objective
Source: Revealbot
Facebook Ads CPI (Cost Per Install)
Moving from rates for views and clicks to mobile app installs as the objective for a Facebook Ads campaign.
Just like we’ve just seen above with Facebook Ads Cost Per Click, which varies significantly for the 2020-2022 period, the Cost Per Install for Facebook Ads campaign has been going up and down. In 2020, the average CPI rate was slightly above the number that has been known to app marketers for the last several years, namely ~$2.5, historically it ranged from $1 to $2 per install and so $2.5 was close to that range.
In 2021, following the fallout of 2020, the COVID-19 pandemic forced people to rely on their mobile devices more heavily, begin using mobile apps for things that they didn’t consider using before the pandemic, the Cost Per Install for Facebook Ads shot up to $4.1 per install.
The other powerful factor that triggered the rise of CPI on Facebook Ads was Apple’s introduction of the ATT framework – the switching of the app user tracking from opt-out to opt-in when app marketers have to ask app users to give permission to be tracked across multiple apps. This introduction made Facebook’s tracking of their apps’ users practically next to impossible, which lead to the situation when it became much more complicated to be able to target a Facebook Ads campaign precisely and hence higher CPI rates.
As of late January 2022, a single install of a mobile app via Facebook Ads costs only $1.97 but it remains to be seen how this price tag will be fluctuating through the entire year.
Facebook Ads average CPI, over time
Source:
Facebook Ads CPA (Cost Per Action)
And finally, let’s analyze numbers for how much does it cost to generate an action associated with a mobile app, such as in-app purchase, subscription, registration, and more. Looking at all Facebook Ads costs, app marketers and brands, in general, should realize that this is the most important benchmark for their ROI calculations.
The rates for generating an action via Facebook Ads vary significantly across different industries. There are many factors that influence the rate for a particular business vertical, among those the level of competition, the level of Facebook users engagement with ads representing products and services from various industries, and paramount of all pricing of products and services being advertised with those ads on Facebook. Meaning it’s small wonder that a Facebook Ad CPA for the Auto industry costs $44 per action, meanwhile for Education it’s only $8.
Facebook Ads average CPA, by industry
Source:
Final Thoughts
Summing up all Facebook Ads benchmarks we’ve reviewed, it’s worth noticing that because the platform hosts millions of advertisers that represent a broad spectrum of industries, average costs for CPM, CPC, CPI, and CPA costs do vary significantly. For app marketers and brands to be efficient with Facebook Ads, they need to run multiple ads in parallel, do lots of testing and focus on ads that do generate desirable outcomes better. Also, ad creatives are paramount to being able to stand out from the army of other advertisers who are on the same quest to reach out to new app users, new subscribers, new customers they hope will become loyal.