How often does Facebook bill ads

Why You're Spending Too Much Money on Facebook Ads (and How You Can Change That)

Facebook advertising can be used to attract new and returning customers.

No other advertising platform has so far had such precise functions for targeting target groups.

Unfortunately, because of these functions, you can easily spend too much money and that is faster than you think.

You can create many different target groups, address them based on the most varied of interests and determine demographic characteristics yourself.

In addition, the platform has numerous advertising formats that can put a heavy strain on the advertising budget.

Still, Facebook is one of the best platforms to reach customers.

Users spend many hours on Facebook every week.

But you can't advertise around the clock.

Any business can successfully advertise on Facebook, but most spend too much and then give up.

The money is then gone very quickly.

You can't spend your entire advertising budget on Facebook.

Luckily, I know a few strategies to reduce ad spend on Facebook while increasing the conversion rate.

There are methods for reducing costs and increasing success.

Here are the reasons you're spending too much on Facebook advertising and how you can fix this error:

Where has the budget gone?

First of all, I want to show you what you are spending your money on.

The Facebook ad manager has many different elements and the pricing of your campaign will depend on many different factors.

By and large, however, the platform is very cost effective.

Some companies regularly spend a lot of money on advertising because the ROI is right.

An advertising budget in the four-digit range is rather small compared to the huge sums that some companies invest in Facebook advertising.

But you don't need more than 50 euros if you just want to experiment a little with Facebook advertising and try out the platform.

The cost of your advertising campaign depends on many different factors.

The answer: “It all depends” is of course unsatisfactory.

AdEspresso analyzed the average cost per click of different campaigns to find out which factors influence the costs.

The data is extremely diverse. It seems to depend a lot on your location. Depending on the target area, your CPC can vary by up to one US dollar.

It also depends on the age group of your target group.

The older the target group, the higher the expenses.

The placement of the ad also seemed to play a role.

Advertising on Instagram is much more expensive than advertising on Facebook.

If you're just running ads on Instagram, that could well be the reason for your high spending.

Even the day of the week has an impact on your advertising spending.

Almost every factor on Facebook has an impact on your advertising budget.

Another important factor is the budget available.

You can advertise on Facebook for as little as 5 euros per day.

That is what makes this advertising platform so charming.

Many large multinational corporations use Facebook to advertise.

However, it is also suitable for small businesses and “solo preneurs” on a budget who want to acquire new customers.

But these are just a few of the many reasons that have relatively little impact on your advertising spending.

Here are the factors that do big impact on your ad spend.

The relevance factor and its impact on your advertising expenses

Facebook uses an algorithm to give each advertisement a grade. The whole thing is known as a relevance score.

This rating is not a well-kept secret either.

Here is a simplified form of the equation that is used to evaluate the relevance score.

Now expand the whole thing by 100,000 factors with different degrees of freedom.

Then it gets complicated!

However, the relevance factor per se is not determined completely arbitrarily.

It is the result of a complicated calculation and taking into account a lot of data.

When all of this data has been processed, the system will rate your ad on a scale from 1 to 10.

Facebook didn't share this information with the public until 2015, but “relevance” has always been calculated.

Positive signals include Clicks, likes and shares.

These actions are sometimes rated higher because they have a direct impact on the goal of your campaign.

Negative signals are hidden or reported indications.

The number of positive and negative signals from your target group are weighted.

When a user clicks the link, the value goes up. If he reports your ad, he'll go down.

Users can learn more about the advertisements in their feed and find out why they are being displayed in the first place.

If the user hides the ad because they don't want to see it, your relevance factor goes down.

The relevance of your ad is determined based on the real feedback and the expected feedback.

You can see the relevance factor of your ads in the Facebook ad manager. The whole thing looks like this:

A high value lowers the cost per click.

If you have a bad relevance score, you'll have to pay more for your ads.

Lower costs with the important target group orientation

Above all, Facebook shines when it comes to target group orientation.

You can run super specific remarketing campaigns and target users based on their disposable household income or based on their interests.

Certain target groups cost more money than others.

Why? Because these are in demand and popular.

Your ads may have to compete with ads from other companies that aren't even in the same industry.

So you have more competition to deal with.

You have to compete with any company targeting the same audience.

If a particularly large number of companies are interested in a certain target group with the same demographic characteristics, the costs increase.

Broad audiences based solely on demographics cost more.

You can easily exclude users who wouldn't convert and cost a lot of money with better targeting.

Audience targeting is where most of the mistakes are made and it can cost you a lot of money.

Proper targeting takes a little practice and patience.

Seasonality has an impact on sales

Some products and services are seasonal.

Including inter alia Christmas decorations, garden maintenance or Halloween.

But even if your product is not tied to certain times of the year, certain changes in the purchasing behavior of customers can sometimes be observed.

In the so-called “rush hour” there is more competition and advertising expenditure increases.

In the United States, these are mostly the holidays.

In autumn and winter there is one holiday after another and many, especially Christmas, are real bestsellers.

Customers buy decorations, gifts, and baked goods for the holidays.

However, B2C companies in particular have to struggle with this problem.

If you run a B2B company, you can simply run less advertising during the holidays to cut your costs.

If your costs suddenly go up in November and December, it's probably because of the holidays.

The placement influences the advertising expenditure

The placement of your ad plays a big role in terms of your ad spend.

Where do you place your ads?

Some placements achieve better results than others and are therefore often more popular.

This competition then of course drives up costs again.

There are numerous placements that you can choose from. Here are the most popular:

The placement in the Facebook feed:

Facebook Instant Articles:

The placement in videos:

The placement in the right sidebar:

And advertising on Instagram:

So there are numerous options available to you.

You can determine your placements manually or have them determined automatically.

Facebook recommends automatic placement because it is designed to optimize costs.

Facebook also recommends a healthy mix of ads on Facebook, Instagram and the Audience Network.

You may find that ads on Instagram are a lot more expensive than those on the Facebook feed.

You can then manually determine the best placements to get more out of your ads and save money.

Optimizing your ad delivery can save you money

That brings me to the last big factor that affects the cost of your Facebook advertising: optimizing your ad delivery

You can find this option in the “Advanced Options” section under “Budget & Schedule”.

Your attitudes have a big influence on the costs of your advertising campaign because they also influence the relevance factor.

When you optimize your ad for clicks, you pay per click on your ad.

When optimizing your ad for conversions, you pay per action (CPA).

Your settings also affect which audiences see your ad.

It is entirely possible that the same ad with different settings will produce different results and cost different amounts.

You can just play around with these settings to see if you can cut the cost of your campaign.

Reduce ad spend using the following four strategies

Lowering your ad spend on Facebook is actually very easy.

Facebook has several functions, with which this is for the most part even possible automatically!

Here are four strategies you can use to cut your costs quickly:

1. Optimize expensive conversion campaigns

If you are promoting an online store, this is by far the best strategy for lowering your expenses.

In this case, very specific actions are very likely to cause the majority of your costs.

If you have to pay 20 euros for a customer to add one of your products to their shopping cart, you are spending too much money.

In this case, you should create a new rule in the ad manager.

Now you have to set a condition. The condition must be met for the cation to be triggered.

For example: "If X happens, my ad will stop serving"

You can choose different conditions from a list:

Now you have to adjust the settings of your advertising expenditure. You can stop the ad, adjust the budget, or enter a manual bid.

With this optimization, you can cut your costs and see marketing automation in action!

2. Check the ad frequency. Is the ad showing too often?

Take a look at the frequency of your ad.

If this is set too low, your ad will not be spread far enough.

The user usually has to see your ad multiple times to click.

Why? Because he's not on Facebook for shopping. He has other things on his mind.

However, if the ad is played too often, the so-called “display saturation” occurs quickly.

Have you ever seen the same ad on YouTube continuously? That really gets on your nerves!

No matter how beautiful, clever or interesting the ad, at some point you just can't see it anymore.

Fortunately, you can make changes to the ad frequency and put it on autopilot.

To do this, you need to create a new rule in the Facebook ad manager:

Here are my recommendations for ad frequency:

I have noticed that after six times the users are no longer paying attention and then the relevance factor of the ad decreases.

You can set up the rule as follows:

The rule states:

Stop serving all active ads if they have already been played six times.

If the user has seen your ad six times, they will no longer see it.

You can be notified by email when this happens.

That way, you can then make changes to your campaign and create new ads.

3. Do a split test to see which ads are getting the best results.

If you don't know the answer to a certain question, for example, “Which audience is responding better to my Facebook ads?”, You should do a split test.

If you don't, you are missing out on a great opportunity.

It's one of the best strategies for optimizing ad campaigns on Facebook that goes way beyond cutting costs.

The ad manager allows split tests.

You can test three elements:

  • The target group
  • The ad delivery
  • The ad placements

You can also test six available destinations:

  • traffic
  • App installations
  • Lead generation
  • Conversions
  • Video views
  • Range

Such a test is set up very quickly.

The split test on Facebook is really easy to carry out compared to many other advertising platforms.

Open the ad manager and create a new ad.

Now choose one of the above targets that can be tested.

You can test the target group, placement or delivery of your ad for each of these goals.

To do this, select the “Split Test” option.

Then scroll down and select one of the available “Variables”.

Then you can design the different elements to be tested.

With this function you can find out what goes down well with your target group in order to create particularly cheap advertisements.

4. Turn off ads that do not deliver the results you want.

You should turn off ads that don't deliver the results you want.

If you run multiple ads at once, not all of them will produce good results.

If you spend more money than the ad pays back in the end, it has a negative impact on your advertising expenses.

You always have a few ads with you that don't work as well as others.

This is completely normal on PPC platforms and you shouldn't let it discourage you.

You need to keep a close eye on the performance of your ad campaigns and turn off bad ads that cost too much money.

To do this, open the advertising manager:

Now you have to create a new “rule” in the “Campaigns” area:

With this automated feature of Facebook, you can pause your ads if they cost too much money.

You no longer have to manually check your campaigns every day to avoid accidentally spending too much money.

Here are the things that need to be set:

You can use the new rule for active ads, ad groups, and campaigns.

Now you can select the following setting:

If costs rise and your budget is used up too quickly, either the bid can be adjusted or the ad can be switched off automatically.

The whole thing looks like this:

You can use this feature to turn off bad ads and save money.

Conclusion

Advertising has to generate a good ROI.

Of course, when you run ads on Facebook, you end up making more money than you spend.

If instead you lose money or just don't make enough sales, you should check your Facebook campaign and change it if necessary.

Facebook provides us with a few great functions for this.

For example, you can optimize expensive conversion campaigns that eat up too much budget.

Then you can work on your ad frequency so that the ad is not shown too often, because this has a negative effect on the advertising costs because the relevance factor decreases.

You can split test to determine the cheapest, most effective version of your ad.

Ads that don't deliver the results you want should be turned off so they don't use up your budget unnecessarily.

If you have a problem with your ads, you can be sure to fix it.

What strategies have you used to reduce the cost of your Facebook ads?

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