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How Much Should I Spend On Facebook And Google Advertisements?

Updated: Jan 29, 2020

Before you decided to launch your product or business, you probably hated advertisements as much as the next person. However, as you’ve come to learn, marketing and advertising are very important regardless of the type of business that you run. Businesses require customers, right? How else are you going to find these customers if you don’t spend a portion of your startup costs or profit on advertisements?

Advertisements come in many different forms. You can advertise on the television, on a website banner, on the radio, or even through social media. However, depending on how much you’re putting into your advertising budget, you might be limited as far as where you can advertise. Fortunately, two of the biggest names on the internet also offer some of the most affordable paid advertising costs: Facebook and Google. Let’s take a quick google at advertising through both and then we can look at how much you should spend on Facebook and Google advertisements.

Facebook Advertisements Overview

As much as the average consumer claims they only use Facebook for friends and family, they actually spend more time on Facebook than almost any other social media website. In fact, people spend hours at a time in total daily just scrolling through cute cat videos and their aunt’s political opinions.

The Social Sharks Facebook Marketing Agency

That’s why you should look at Facebook to help you reach your target audience. Unlike Google, you can target the specific demographic that you want to advertise to. You can advertise to people based on their industry, whether they’re married, what gender they are, or even the industry that they work. Facebook also offers video advertisements that you can use to bring customers to your brand as well.

The best part is, Facebook advertisements are very simple to set up. When you’re setting up a business, the last thing you want to do is have a complicated and time-consuming advertising process.

How The Facebook Advertising Model Works

Advertisers can also set bids to control how their ad budget is allocated. In addition to specifying the maximum daily budget they’re comfortable spending, advertisers can also set maximum bids for their campaigns. Just like bids in the Google ad auction, Facebook Ads’ bids allow advertisers to control how much they spend on certain actions (such as a user downloading a piece of content or signing up for a newsletter) in concert with their daily budgets. This gives advertisers a great deal of control over how and when their ad budget is used.

While Facebook’s pricing model for its online advertising inventory offers advertisers the control they need to run effective campaigns even on modest ad budgets, it’s still a little confusing to newcomers – especially if they’re coming from the comparatively more straightforward world of PPC and CPM models. Let’s take a look at it in a little more depth

How Much Should I Spend On Facebook Advertisements?

If your goal is to grow your business using Facebook advertisements, then you can do it as easy as just $5 a day. That’s really affordable if you have a smaller advertising budget, but you’re not going to reach a lot of people. Obviously, if you want to expand your reach, then you’re going to want to eventually put more into spending for Facebook advertisements, but it’s worth it if you’re only after a niche market. At some point, you’ll want to aim for $3,000 a month. That comes out to $100 a day to spend on Facebook advertisements.

Here are some more insights on Facebook Ads. Although this is the industry average, we are seeing much lower results with The Social Sharks.

  • The average cost per click of an online Facebook ad is $1.72.

  • The average cost per action on Facebook Ads is $18.68.The typical CPM on Facebook Ads is around $10.

  • The typical CPM for an Instagram ad is closer to $5, but Instagram ad costs are rising as the platforms gains in popularity

Check out some of the industry average stats for Facebook Ads below:

Average cost per click facebook ad

In addition, the average cost-per-action (CPA) on Facebook is significantly lower than on AdWords:

  • Apparel: $10.98 

  • Auto: $43.84 

  • B2B: $23.77 

  • Beauty: $25.49 

  • Consumer Services: $31.11 

  • Education: $7.85 

  • Employment & Job Training: $23.24 

  • Finance & Insurance: $41.43 

  • Fitness: $13.29 

  • Home Improvement: $44.66 

  • Healthcare: $12.31 

  • Industrial Services: $38.21 

  • Legal: $28.70 

  • Real Estate: $16.92 

  • Retail: $21.47 

  • Technology: $55.21 

  • Travel & Hospitality: $22.50

Like we said earlier, we have been seeing much cheaper acquisitions than this, but obviously all ad campaigns have different variables and many moving aspects that can affect these numbers to go up or down. It's our job to make them go down :)

How Well Do Facebook Ads Work Per The Cost?

Overall, Facebook Ads perform extremely well and offer outstanding ROI, particularly for small businesses or brands with a highly niche focus, due to its highly sophisticated targeting options. There aren’t many online advertising platforms that offer a decent return on an ad budget of $50, but even this modest sum can go a long way on Facebook Ads.

Remember: People browsing (or wasting time) on Facebook don't show as much intent to purchase as people searching for exactly what they want on AdWords, but running Facebook ads is an excellent way to reach new audiences, influencing them toward your brand when they are ready to buy.

Google Advertisements Overview

Unlike Facebook, customers are looking for you. They’re not scrolling through their social media feed and coming upon your advertisement. They’re looking for a product or business similar to yours, so you want to make sure that you’re one of the first ones they see. There isn’t going to be a shortage of potential eyes on your product or brand either as Google gets billions of searches every single day. Even niche products get views depending on the type of inquiries users are searching for.

Social Sharks Google Advertising

The best part about advertising through Google is you can aim for your target audience through a combination of keywords or demographics. For example, if you have a product aimed towards women in after they’re forty, you can reach that specific demographic. If you’re the type of person who likes to track how effective your advertising campaign is doing, then Google offers analytics for you to track your data and see everything such as impressions and clicks. This makes it easy to track your return on investment, especially if you run your re-invest in your campaign.

If you’re on a tight budget, then Google helps you stay within that budget by allowing you to set a maximum amount that you can spend for your ad. If you find that it’s working for you, then you can easily as more to your marketing budget. Google makes it really easy for companies, big or small, to get noticed. You can go with trying organic SEO marketing, but Google advertising is the best way to go.

As the world’s largest and most widely used social network, Facebook is a true juggernaut in the online advertising world. It’s not at all uncommon for a single business to operate multiple online advertising campaigns across both PPC and paid social, and Facebook Ads are an excellent way to diversify your digital strategy and drive leads and sales.

What Is The Google Advertising Pricing Model?

Google’s search network is where pay-per-click (PPC) ads appear, above and below the organic search results for a user’s search query. Because Google serves online ads that are highly relevant to the search query, businesses that use Google advertising are able to drive highly qualified traffic to their site and landing pages. Instead of showing your ads to huge audiences that may or may not be in market for your products (like you do when you buy billboard space), you can target your ads at people who are searching specifically for the kinds of products or services you offer.

Basically Google Search Ads will be on a cost-per-click basis (CPC) and Google Display Ads will be on a cost-per-impression model (CPM). Businesses that are service based and are trying to generate more "leads" compared to "sales" will be best going with the Google Search Ads. Businesses that are trying to sell products or increase their ecommerce sites will be best fit with Google Display Ads and Google Shopping Ads.

Here is a little overview on how Google chooses advertisers ads to show per search result.

how google chooses ads to show chart 1

how google chooses ads to show chart 2

How Much Should I Spend on Google Advertisements?

Before you decide how much you want to spend on Google advertisements, you have to decide what your goals are. Are you looking for ten new customers a week, ten new customers a month, or ten new customers a day? After you sit down and figure out your goals, then you need to figure out how much your advertising budget is. You can set your goal through Google and only pay if your link is clicked. You will pay about $5 per click, so if your monthly budget is only $1,000, then you’ll pay up until 200 clicks to your website.

Once users are there, that’s when you should convert them into customers.

Make sure you sit down with yourself or your team to work through your advertising goals, budget, and targets. Once you do, then you’ll know whether you want to go through Facebook or Google.

Check out this overview on the estimated costs per industry when running Google Ads and see how your business matches up:

As you can see, The Average Cost Per Click (CPC) The average CPC in AdWords across all industries is $2.32 on the search network and $0.58 on the Google Display Network.

Here are these numbers in an easy to read list:

Industry Average CPC (Search) 

  • Advocacy: $1.72

  • Auto: $1.43

  • B2B: $1.64

  • Consumer Services: $3.77

  • Dating & Personals: $0.19

  • E-Commerce: $0.88

  • Education: $1.74

  • Employment Services: $4.20

  • Finance & Insurance: $3.72

  • Health & Medical: $3.17

  • Home Goods: $3.19

  • Industrial Services: $2.00

  • Legal: $5.88

  • Real Estate: $1.81

  • Technology: $1.78

  • Travel & Hospitality: $1.55

As you can see, some of the most expensive keywords on the Google search network are in the Legal industry, with an average CPC of $5.88. This isn’t terribly surprising, given how expensive legal services can be and the often large sums of money at stake in high-profile lawsuits. In other common industries, average cost per click for an ad varies from as low as 19 cents to $3 to $4 per click. Generally, the most expensive the product or service for sale, the more expensive the ads.

The Bottom Line On Paid Advertising

As we see with the brands that we shop from, have insurance from, have healthcare from, and live our everyday lives with ALL ADVERTISE CONSTANTLY. Paid Ads are always evolving and audiences are always hungry for a new ad, new product, or new service they have not seen before. Good thing for you, that even the two advertising GIANTS (Facebook/Google) have made it possible for ANY business to use their platforms to drive business. This may be over your head, but there are people out there (like us) who understand these advertising platforms and what works and what does not! Reach out to use at The Social Sharks or at our support email if you think it might be time to advertise your business! We hope you enjoyed this class! Subscribe to our website and continue to get these FREE marketing classes :)


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