Facebook ads (and now extended to Instagram ads) are hugely popular for eCommerce brands across the popular industries such as fashion, apparel, beverages, and others.
Facebook and Instagram are popular social media networks for several eCommerce brands for a simple reason: it’s an expansive, active, and contemporary audience base that’s active on these networks.
Facebook boasts of more than 2.8 billion monthly active users and 3,7 billion businesses active on the platform.
It only makes sense then that you’d want to consider running paid ad campaigns on Facebook ads.
So, the important question is this: How much should an eCommerce business spend on Facebook Ads?
TL; DR: The short answer: It depends.
According to Shopify, the average cost per click (as of January 2022) is roughly $0.948 per click. The average price paid for every 1000 impressions is $12.07.
Do note that the geographic audiences chosen for targeting, seasonality, and competition play a huge role in determining how much you pay for Facebook Ads.
The long answer? Here we go:
Get the overall numbers (for basic understanding)
How much you spend on Facebook Ads depends on a bewildering list of factors that most business owners and even rookie marketers are usually unaware of. How much you spend depends on:
- The geographic locations (in isolation or grouped together) selected for your campaigns
- The type of advertising objectives you choose
- The campaign type you pick -- paying for impressions (CPM), paying per lead (CPA), and so on.
Make some calculations
With some back-of-the-napkin calculations, you should be able to get a fair idea of what Facebook ads can cost you, depending on your primary and secondary objectives while you run your campaigns.
Let’s assume that you were running eCommerce ads (featuring eCommerce products or product categories) where the ads lead directly to your eCommerce store.
We’ll also assume that while you are pointing to your store and featuring products themselves, you’ll also be giving away a discount coupon.
Assume Each Facebook/instagram user signing up to receive the coupon is a lead.
Take into account your CPA: You should be able to have at least 2 sales per day with your budget (ie. 2*CPA = $____ your daily budget)
If you’re just starting with Facebook ads or instagram ads, go with at least $30 to $40 a day to generate conversions and get a sense of your first CPA.
As you go along with your campaigns (and with enough data in terms of the average CPA, the results you get, and daily budget spends), you’ll be able to fine tune your campaigns.
Tweak & Optimize Campaigns
The secret of success when it comes to ad campaigns is the quality of your ads -- the images, videos, copy, offers, angles, and more. The quality of your creatives will determine exactly what happens with your Facebook Ad Campaigns.
After rolling out your initial campaigns above and getting a basic understanding of your unique costs of Facebook campaigns for impressions (CPM) or for conversions (CPA), it’s time to tweak and optimize.
Start with your first optimizations (Creatives, ads, copy, images, videos, and landing pages) to improve your CPA
We also have a handy Facebook Ads Budget Profitability Calculator, created just for you.
