More than 2.6 billion people log into Facebook every month, with around 4.4 million Singaporean users on the social media network. That’s 78% of the population of Singapore. As a marketer, that number is hard to ignore. Advertising on Facebook means reaching more people than any other platform can offer.
But the question isn’t, “Should I advertise on Facebook?” It’s “How much should I spend on Facebook ads?”
The question is pretty straightforward. The answer, unfortunately, isn’t.
Your Facebook advertising budget depends on a lot of factors – there’s no “magic number” that will maximize your ROI.
So we’re not going to tell you what your ads cost should be. Instead, we’ll go through the basics of Facebook advertising in the Singapore market. This guide will give you the information you need to compute your marketing campaign spend on your own as well as a few strategies on how to minimize your cost per click.
Facebook advertising is very different from search engine marketing, SEO, and PPC. Most Facebook users consume content passively – there’s usually little to no purchasing intent as they scroll through their feeds. This usually results in a lower clickthrough rate than other advertising methods, which may turn some marketers off from advertising on the platform.
Advertising on Facebook provides many other advantages, however, which makes the popular social network an essential part of any digital marketing strategy.
Here are the three biggest reasons your business should run Facebook ad campaigns for your page:
Before you can estimate your monthly ad spend, you need to understand how Facebook delivers ads to its users. When you spend on a Facebook ad, you’re not technically buying placements. You’re actually bidding. And as with all auctions, there’s a “winner”: the business that gets to show their ad to their target market.
If Facebook tried to show every ad that targeted you, your feed would be spammed with ads to no end. To avoid overwhelming (and annoying) users, You’re basically competing with other businesses that are targeting the same audience.
But unlike most auctions, it’s not necessarily the highest bid that gets delivered to users. There are other factors such as quality and estimated engagement. But with all other things being equal, how much you bid will be the deciding factor. So you don’t have to have a huge advertising budget to be successful at Facebook advertising, you just need to be smart with how you approach it.
Aside from your bid, here are two things you need to pay attention to:
When you try to place an ad on Facebook, you’ll be given a few options for your bid strategy. These are divided into two categories: no cost control and cost control.
If you get the most bang for your buck and you’re not worried about budget, the lowest cost strategy might be the best choice for you. You just set a maximum bid per conversion, and let Facebook do the rest. It’s completely hands-off, but it also gives you the least control over your spending.
Then there are the cost control options, which are further divided into three: cost cap, bid cap, and target cost. We won’t go into detail about the differences between the three so that we don’t stray too far off-topic, so if you want to dive deep into bid strategies, just check out this quick guide from Facebook.
If you bid too low, Facebook may not show your ads to your target market. If you bid too high, your campaign budget will run out much faster. You have to strike the right balance so that you maximize clicks and minimize spend.
Facebook ads don’t come at a single, one-size-fits-all price. Many factors determine your cost per click, cost per impression, or cost per conversion. We break down each of them below:
Again, you’re competing with other businesses to deliver ads to specific markets. If there are certain audience “profiles” that are highly sought-after, then the law of supply and demand dictates that securing those audiences come at a higher price.
You might think that narrowing your target demographic down would be the solution, but that just creates new problems. Not only do you limit the number of people that you reach, but you may even end up spending more.
Smaller audiences don’t have as much demand as bigger ones, so Facebook offers fewer ad placements for these markets. Since there are fewer placements, there’s naturally more competition and, therefore, higher costs per click.
Digital marketing (actually, just advertising in general) is all about timing. Supply and demand still apply here – when there are a lot of businesses trying to advertise, costs go up. When there’s not a lot of competition for ad placements, costs go down.
You can expect your cost per ad to skyrocket during peak periods like Thanksgiving, Christmas, and other holidays. But it’s not just the time of year that matters since the day of the week or even the hour that you run your campaign will impact your advertising costs.
Facebook lets you choose where on the page you want to promote your business. Do you want it to appear directly on users’ feeds? Will it show up in the Marketplace? Or do you prefer advertising in the right-hand panel? Here’s the list of where you can place your ad:
|Feed||Directly on the news
feed on the desktop version of Facebook
|– Most visible placement
– Higher CTR
– Lower cost per conversion
|– Higher CPC
– More competition
– Missing out on mobile impressions
|Mobile feed||Directly on the news
feed on the mobile version of Facebook
|– Best for engagement
– High CTR
– Lower CPC
|– Lower conversion rate|
|Stories||In the Stories section of
Facebook and Messenger
|– Good for retargeting
– Full-screen ads
– Lower CPM
|– Higher CPC
– Lower CTR
|Instant articles||Directly on the feed in
the mobile version of Facebook
– Good for retargeting
– Media rich
– Fast loading
– Lower CPM
|– Low conversion rate|
|Right column||On the right-hand
column on the desktop version of Facebook
– Good for retargeting
– Lower CPC
– Higher “screen time”
– Lower conversion rate
– Less control
– Small placement
|Marketplace||In the Marketplace
|– Low CPM||
– Low conversion rate
– Fewer placements
|In-stream video||Before, after, or in
– Best for video ads
– Lower CPM
– Low conversion rate
– Fewer placements
Each ad placement has its own pros and cons. Some are more visible (like ads on the feed) and will, therefore, help you reach more users. But there’s a trade-off: these come with higher costs per click.
The Facebook ads platform also lets you advertise on their sister platforms like Instagram and Messenger. Just keep in mind that Instagram ads (both on the feed and in stories) generally have a higher cost per impression than advertising on Facebook.
You have to set your marketing objective before you can place an ad. Facebook offers many different options, from general brand awareness to engagement to conversions. Be careful when choosing your marketing objective because this can significantly influence the cost per click rate.
Here’s a rule of thumb: The harder the objective, the more it costs your business.
If you just want users to visit your website, you wouldn’t pay as much as a business that wants to increase their sales, but you would pay more than someone who just wants eyes on their ad.
In the same way that Google assigns “scores” to every page in order to rank them, Facebook assigns a score to the ads you put out on the platform based on its quality and engagement.
Basically, if people ignore your ad (low engagement) or report your ad for low quality, then that signals to Facebook that your campaign isn’t relevant to their users. This will result in a lower ad relevance score. The lower your score, the higher your cost per click. The higher your score, the less you have to shell out for engagement.
Now that you’re familiar with the basics of Facebook advertising, let’s get into how much a small business can expect to pay for a campaign.
As we’ve already mentioned, Facebook ads don’t have a uniform price tag. It varies wildly from niche to niche, market to market, location to location, and even day to day.
And every business handles it differently – some may be content with their hundred dollar per month budget, while others may have the capital to spend a thousand times that.
So instead of looking at the overall budget, which could vary from business to business, let’s take a look at some industry benchmarks. Knowing the averages in your niche will help you plan out your business’s advertising spend.
Unfortunately, there’s not a lot of recent data for markets outside the United States, where the average CPC in 2019 was $1.72.
But we do have some recent historical data that could give you a good idea about what present-day advertising costs are like.
In 2015, Nanigans found that all of Southeast Asia had an average CPC of $0.11, while the CPM was at $1.61.
But what about Singapore specifically?
Well, we can turn to a 2017 AdEspresso report for that. According to their findings, Singapore registered an average Facebook cost per click of $0.76, lower than the global average of $1.10 per click.
This aligns with WordStream’s 2018 study which estimated that Singapore’s CPC was, on average, 58% less than the United States’ CPC. Since this is the national average, expect more competitive industries to have higher rates.
We may be able to apply the 58% figure to industry-specific benchmarks to get the estimated CPC in the corresponding Singaporean niche. For example, WordStream’s 2020 report puts the average US CPC at $1.72, so we could estimate a national average of $0.99 per click for Singapore. Depending on the industry, Facebook advertising in Singapore could range from $0.26 on the lower end to around $2.18 on the higher end.
Of course, while this may be sound mathematically, it may not be entirely accurate. Especially since industries in the US will have a different demand compared to the industries in SG, so take this with a grain of salt. And only use it to estimate, not predict, how much your business will have to spend on advertising.
Also, remember that CPC isn’t the whole picture. While a lower cost per click is always advantageous, you could still risk going over budget if the industry you’re in has a large audience. You’ll still need to manage your campaign well so that your advertising spending doesn’t go out of control.
Between fluctuating CPCs and a not-so-straightforward bidding system, it can be difficult to predict how much costs will change from one month to the next. But you can keep your marketing budget in check by monitoring your bids and choosing the most profitable strategy.
You can run a campaign for your Facebook page by setting either a daily budget or a lifetime budget.
If you choose to set a daily budget, Facebook will try to get you your budget’s worth. This isn’t an absolute cap, though, since Facebook wants to maximize your result. They might spend up to 25% more than your budget on days that provide more opportunities for engagement. This lets you have more control, but you’ll also need to monitor your campaign closely to maximize your ROI.
But if you have a strict budget, setting a lifetime budget might be a better choice. A lifetime budget tells Facebook how much your business is willing to spend over the duration of the entire campaign. When the budget runs out, your campaign ends.
This means your ad spend will vary depending on the day, and your results will likely vary as well. It’s a more hands-off approach, and it’s an easy option for any campaign with a set budget and time frame.
However, it does make it difficult to change your campaign on the fly – if you change your spending limit or the length of the campaign, Facebook will have to reprioritize how they spend your budget, and that could negatively impact your ROI.
These simple strategies will help you avoid costly mistakes and get a higher return on your advertising investment:
Advertising on Facebook is incredibly affordable, especially when you compare it to other marketing channels. Singapore, in particular, enjoys an average CPC that’s lower than the global average.
But your CPC is just one piece of the puzzle. You need to know how best to allocate your budget so that it reaches the most number of people without draining your finances.
But if you want the best possible results, you need to call in the experts. Adtreme is a Singapore-based social media agency that can get you more likes, more shares, and more sales. Contact us today to find out how we can help your business!