Whether you’re running ads to generate leads, increase impressions or make more sales, knowing how much to budget is key to maximizing your price of Facebook ads. Facebook provides multiple budgeting options for advertisers, including a campaign budget, ad set budget, and manual bid strategy.

Your bid represents how much you’re willing to pay for a desired outcome, and is based on the type of advertising goal you choose, such as cost per click (CPC), cost per mille (CPM) or cost per lead (CPL). A manual bid strategy allows you to specify your maximum amount that you are willing to spend on each result (i.e. $5 for each like).

Understanding the Price of Facebook Ads: Factors That Influence Cost

When your ad is competing to win an auction, Facebook evaluates the total value of all the ads competing for that space (i.e. ad quality, relevance, and estimated action rates) to determine the winner and its associated cost. You can then adjust your bids to improve the chance of your ad winning the auction and increasing the likelihood of your desired outcome.

The time of day you run your ads also impacts the price you pay for ad delivery. For example, ad prices are typically higher during holiday periods, such as Christmas or Black Friday. In addition, some ad objectives may be more competitive than others, such as website visits and post-link clicks.

Finally, the location of your audience also impacts the price you pay to reach them on Facebook. It’s generally more expensive to reach 1,000 people in the United States than it is in Japan, for example.

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