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Cost of Ads on Facebook

Like Google, Facebook generates revenue by charging money for advertisements. Facebook utilizes a bidding process where an advertiser sets the amount they are willing to pay for the ad. The cost for each advertisement depends on a variety of factors such as target audience, quality and time of the year. If many companies are targeting the same audience then the price is likely to go up and more popular times will have higher costs. The quality of the ad depends on relevance and click through rate. The ad will receive a relevance score between 1 and 10 based on how relevant the ad is to the target audience. The higher the score the lower the cost. The click through rate is calculated by dividing the number of clicks on the ad by the numbers of impressions.

As we learned in class, most websites charge advertisers for number of clicks on an ad and display the ad for free. Facebook offers many bidding options for you to choose from. Some options include cost per click (pay for number of clicks on ad), cost per impression (pay cost per 1,000 impressions), cost per action (pay when an transaction is made) and cost per like (pay for each like). With many options, advertisers can choose an option that will benefit them the most. Moreover there is no set cost for an advertisement.

The Complete Resource to Understanding Facebook Ads Cost – 2016 Q2 Results!

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