How much does advertising on Facebook REALLY cost?

Well, in the Facebook advertising interface they give a very vague guideline by suggesting a bid price, but it doesn't really give you any clue why. Statements such as 'Suggested Bid: 0.49 – 0.68 USD' is helpful, but after a few days, they may chose to raise the price to a dollar! Going from $0.49 – $1.00 CPC (cost-per-click) can make or break a campaign, and rates can increase for no other reason other than Facebook just raised it.
At Candybox Marketing, we have launched many Facebook Ads campaigns for clients for building a Fan base for a FB Page, or driving qualified leads to a website. In our experience, there are two major factors to price changes, and ways to bring the CPC cost down:

1. Facebook Click Through Ratio (CTR)

We started one of our campaigns at $15.00 / day for a customer trying to increase their Facebook Fan base. The first day, the campaign was averaging $0.80 / click, but every day following, the CPC came down by 5% each day. The major contributing factor was that their ad was generating a very high CTR, which made it profitable for Facebook to show it more often. With a combination of a great message and image, we have slashed their CPC to $0.16 / click over two weeks! If you want to lower your cost of advertising on Facebook – come up with an ad that promotes a higher CTR and you will see the cost drop.

2. Proper Targets

In our research of our customers multi-channel campaigns, we have found that some sociographic groups are sought after more, and therefore more advertisers are bidding on that group. If you are targeting CEO's who smoke cigars (yes, you can do that), you will be paying more than a 18 year old student living in Alaska. Make sure to target your groups specifically and with a proper message, you will get a lower CPC quickly.

Interested in finding out more? Feel free to give us a shout and we can show you how we create these low-cost / high-conversion campaigns!