How much do Facebook ads cost for a local business?

Facebook and Instagram ads do not have a fixed price. You set a budget and enter an auction against every other advertiser trying to reach the same people. So the useful question is not what ads cost. It is what a new customer costs you, and whether that is worth it.

What moves your costs

• Your market. A dense city with many advertisers costs more to reach than a small town.
• Your creative. Ads people watch and tap are rewarded with cheaper delivery. This is the biggest lever you control.
• Your objective. Asking for leads or purchases costs more per impression than asking for views, because you are competing for people who act.
• Time of year. Costs usually rise when many advertisers spend at once, such as the weeks before major holidays.
• Your landing page and follow-up. These do not change what a click costs. They change how many clicks become customers, which matters more.

Work backward from a customer

Here is the math we walk through on strategy calls. The figures below are an example to show the method, not a forecast.

1. What is a new customer worth? Not just the first visit. Suppose a new client spends $600 with you in their first year.
2. What can you afford to pay to get one? Suppose you are comfortable spending $120.
3. How many leads become customers? If one in four leads books and shows up, you can afford $30 per lead.
4. How many new customers do you want? Twenty a month means 80 leads, which at $30 each is a $2,400 monthly ad budget.

Now you have a target cost per lead to judge the campaign against, instead of a feeling.

Start with enough to learn

The system needs a steady flow of results to work out who to show your ads to. A budget that produces only a lead or two a week gives it very little to learn from. It is usually better to run one focused campaign with a meaningful budget than three tiny ones.

What else to budget for

• Creative: photos and video of your real business.
• A landing page with booking.
• Follow-up tools for text and email.
• Management, if you are not running it yourself.

The bottom line

Decide what a customer is worth, set the cost per lead you can live with, and judge the ads against that number. If you want help running the math for your business, book a strategy call or read about our Instagram and Facebook ads service.