There’s no point in trying to hide the fact that Facebook ad prices are on the rise. Over the course of the last few years, marketers have noticed a steady increase in the cost per thousand ad impressions (CPMs). When you’re running multiple ad campaigns, this can result in a big increase in ad spending and ultimately push you over your ad budget.
Naturally, all marketers thus strive to reduce their cost per leads (CPLs) and in turn, see a better return on investment (ROI).
CPL on Facebook can fluctuate due to a number of different factors such as your industry, your audience, and your campaign goal.
Due to the changing nature of CPL, there’s no one solution for all Facebook advertisers to reduce their individual CPLs.
However, in our experience of running countless ad campaigns, we’ve gained some valuable insights and knowledge in this area. We’ve noticed a thing or two that all advertisers can do to help reduce Facebook ad cost.
What is Cost Per Lead?
This is essentially how much money you spend as an advertiser to acquire the details (contact info etc.) of an individual lead (person or business) that is likely to buy your product or service.
Elements of Ads That Affect Cost Per Lead
As we mentioned earlier, there are a number of different factors that determine your cost per lead. Although Facebook, in general, has a lower cost per lead than most other platforms out there, the price can still vary from a couple of cents to tens of dollars depending on your situation.
The key factors which affect CPL are:
The industry you’re operating in
Type of ad used
Now that we’re more aware of what affects our CPL, we can explore Facebook advertising optimization in more detail.
Here are our expert’s top tips and tricks to reduce cost per lead on Facebook.
3 Ways To Reduce Cost Per Lead on Facebook Ads
Lowering the amount of money you spend on generating leads will result in higher profit for your business. Follow our Facebook “budget planner” below and use three simple steps to increase your return on ad spend:
1. Try Facebook Lead Ads
“Facebook Lead Ads” is a fantastic way to generate quality leads on Facebook. It makes capturing people’s information easier and as frictionless as possible.
When using a regular ad, if a person clicks on the ad they are brought to a landing page on a different site. It’s there that they have an opportunity to supply their information. However, loading a new website can be a point of friction for many people.
Facebook Lead Ads keep the user on the Facebook platform, meaning no new page is loaded. It also pre-populates the fields of your ad form with the user’s information from their Facebook account.
The ease of filling in information and the simple click-through nature of the ad tends to increase conversions for your business and reduce the cost per lead.
In general, by switching to Facebook Lead Ads, advertisers tend to see over 50% reduction in their CPL.
2. Lookalike Audiences
Facebook has the most extensive database of information on people in the world and they kindly make it available to us marketers!
Because of this, Facebook has an incredibly advanced targeting system, allowing you to specify exactly what audience you wish to target. An extra handy extra feature is called “Lookalike Audiences.”
This feature will create new audiences based on the characteristics of your target audience, automatically. Essentially, you provide Facebook with a list of high probability customers and they will create an even bigger list of high-quality customers that are similar to your target.
Powerful tech. We know.
Using these leads compared to your historic lead database results in a lower cost per lead.
3. The Algorithm, Optimize It!
You may see this sentence written down all over the internet and have no idea what it means.
One of the most important elements of Facebook Ads that you should familiarize yourself with is the CPM algorithm, how it works and how to optimize it to reduce your Facebook ad budget.
Choosing the correct goal for your campaign is essential.
Why? Because the bidding algorithm only does exactly what you tell it. If you tell it to chase a goal that isn’t in line with your strategy well, unfortunately, that’s your own fault.
Figuring out exactly what you want to achieve with your ad campaign is vital. There’s no point selecting the ‘Clicks’ option when really your goal is to create leads for your business.
2. True value
Make sure to bid your true value. If you have a budget for acquiring an individual lead, then set that as your bid and don’t sell yourself short. The higher your bid the more auctions you’ll be able to compete in.
There is an automatic bid option, which will optimize cost per lead for each auction. This is a great feature, but is worth testing out first as you may end up spending money on lower quality leads.
3. Relevant Data
The algorithm needs data to function properly and the more data you can provide, the better it will work for you. However, this data must be relevant to your business or ad. Having around 500 leads generated previously on Facebook will provide it with the knowledge it needs to generate accurate and high-quality lookalikes. The more Facebook knows about who your audience is the more they’ll reward you with a lower CPL.
4. Widen Your Net
There are a LOT of people on Facebook. There are potential customers out there who, despite all your hard work researching, you’ll have missed. Missed customers mean missed sales
Allow Facebook to analyze a wide audience, so that they can create a larger list of lookalike audiences for you.
Hopefully, these expert tips will help you understand Facebook budget optimization so that you can implement it for your business and create high-quality, low-cost leads.
Spending more money on your ads doesn’t mean you’ll generate more sales, however, optimizing your ads does.
Focusing on high-quality leads, creating similar lookalike audiences, optimizing the algorithm and using Facebook Lead Ads are just a few of the ways you can use Facebook ads to reduce cost per click for your campaigns.
Now that you have the tools don’t wait around! Get onto Facebook and start generating leads for your business now!
Join the Optily newsletter!
Stay up-to-date on platform changes, digital marketing tactics, and industry news. We promise we won’t spam!
Optily is the only single-click ad spend optimizer for eCommerce. Our plug-and-play online platform quickly links all of your Google and Facebook ads together and helps you easily determine which campaigns are working. With just one click, you can apply our optimization recommendations–like moving budget from a lower performing Google ad to a better performing one on Instagram.
Optily saves you time and money by instantly optimizing your ad spend.