The Real Cost Of Facebook Ads For B2B Sales

You might be thinking about hiring a consultant or marketing agency to run your Facebook ads.?

The question on everyone's mind is “How much will it cost?”

Just as you can't always give a precise pricing model for your services, advertising equally depends on a variety of factors before presenting a price.

I’ll try to explain how much this could cost you and what’s involved so that you can decide if this path is right for you or not.

But let’s be clear: Unless you hire a rubbish one, hiring an agency or consultant to help you with your ad campaigns isn’t going to be cheap.?

If you’re a small business that’s turning over less than $20,000 per month then it might not be worthwhile for you to hire an ad agency.?

More often than not, the costs will simply outweigh the benefits.

Everyone has read about Facebook ads and knows they can be a powerful way to scale any business.?

But it’s going to take a long time for you to learn how to run ads and make them profitable.?

You’re also going to waste a lot of money learning how to get it right.

Sure, if you’re a small business owner then you’re probably short on time, have your fingers in a lot of pies, and just need some level of consistency in your business so that you can make more sales.?

That leaves you with two options. Hire someone in-house or outsource.

Outsourcing your Facebook ads makes a lot of sense ONLY IF you find the right agency that understands your industry and has the case studies and testimonials to back up that claim.

So if you’re a small business that turns over less than $20,000 per month the biggest mistake you can make is outsourcing any of your lead generation to an agency that doesn’t understand your industry.

You may as well just withdraw some money, put your money into an envelope and send it off to Facebook HQ. Because that’s exactly where your money is going to go if you use an agency that doesn't know your industry like the back of their hand.

But in all seriousness, if money is tight, I do not recommend hiring an agency. Facebook ads, and really any social media advertising can cost quite a bit of money to get right.

When you consider the ad spend you need to make ads work, plus the agency management fee (some call it a retainer) the costs add up.?

If money is tight, that expense can be unaffordable.

If your business has been built on shaky foundations and you’ve come to a point where it’s 'make or break' please do not spend your savings on ads!?

An advertising campaign is meant to supplement what is already working in your business.

Throwing money at a problem doesn’t work unless you know what your problem is.?

That’s why I invite you to schedule a call with me before you make any decisions.

If you're reading this, chances are that you're looking to make money with Facebook ads.

And as a business owner, why wouldn't you be?

You can 100% make money with Facebook ads IF you have the budget to test offer+ad combinations over a period of time.

Brand awareness and consumer engagement from Facebook ads can lead to better customer relationships, more sales, and lower overhead costs for your business.?

When you put all of this together, you have a great potential for growth, all at an inexpensive cost.

When you compare the cost of social media to other, more traditional forms of advertising such as billboards, TV commercials etc.) you’ll see the cost per result is infinitely less on social media.

Facebook ads have transformed the way we make money for our customers - particularly video ads.

Let's say you sell a monthly high-ticket service at $1,000 per month. As long as you spend less than $1000 on advertising that service (and make a sale), you’re making a positive return on investment.

That’s because your $1,000 per month service might be on a retainer, so your client pays $1,000 a month for 6x months.

If you spend $1,000 to get that customer, you’re actually making $5,000 over the customer's lifetime.

Obviously, you really need to understand your numbers, profit margin, and what you’re capable of spending to acquire a customer.

And that’s really the big question, ‘how much are you willing to spend to acquire a customer?’

So, when’s the right time to outsource your ads?

When I speak to business owners I’m often looking to find out a few things.?

Do they:

1. Have an ad budget of at least $3,000 per month or more?

2. Have an existing list of customers, prospects, and leads?

If the business has a budget of $3,000/pm or more then I know that there's enough cash to test multiple offers and then scale the winner once we find which offer+ad combo works best.

A business that is short on cash will not have the patience to trust the testing period.

Although I’ve got experience running hundreds of ad campaigns for technology firms, in particular, every market is different and every offer has a different market fit.

Sometimes it takes less than 2-weeks to get results, other times it could take 6 weeks.

But once the testing stage is completed and we have found the winners, it’s time to scale.

That’s why it’s important to have a decent budget before running ads.?

Initially, your budget is for testing. Hundreds of ads are tested during this period at $5 or $10 per day.?

Once you find profitable ad+offer combinations you can scale them to hundreds of dollars or even thousands of dollars per day for maximum results.

Obviously, if you have the budget you can pump a lot more money into your ads. But make sure you scale SLOWLY or you'll break the algorithm.

So how much does it ACTUALLY cost to run Facebook ads for b2b service providers?

Well, I’ve seen ad consultants charge as little as $250 per month right through to $12,000+ per month. It’s a HUGE gap.?

In the early days of running my agency, I actually paid one expert $1,000 for monthly consulting (and I’m afraid to admit they weren’t exactly an expert)

Once you figure out what your budget is, and whether or not you want to run ads yourself or pay an agency to do all of that for you, it all comes down to the average benchmarks.?

After running hundreds of ad campaigns for B2B companies over the last few years, I’ve nailed down the typical benchmarks we aim to reach when working with a new client in the B2B space.

The average cost per clicks range from $1-$3 while cost-per-thousand impressions are on the rise.?

It wasn’t too long ago we could reach an audience for $15 CPM - that’s the cost per 1,000 impressions…but nowadays it’s closer to the $25 mark.

For clickthrough rates, you’re gonna want your campaigns to convert at 0.8 to 1.5% but this can vary heavily from industry to industry and the type of ads you’re running.

The average cost-per-lead in the B2B space, with Facebook, is roughly $15 per lead - at least from my own experience.

In fact, I’m working with a few IT companies right now that are achieving a $9 cost-per-lead.

Regardless of what you’re paying an agency or whether you’re doing it yourself, the main thing you need to consider is the long-term value of the customer.

It’s the only way to truly figure out how much you can afford to spend to acquire a customer, and therefore figure out what your benchmarks should match.?

For example, if you’re a typical service provider you're probably charging on average $2,000 per month for a 12-month contract term.?

That's an LTV of $24,000.

That means if you pay an agency $6,000 for 3-months of work and they help you get 3 new customers after that 3-month period, you’ve made your money back instantly - and actually stand to make $72,000 over the next 12 months.

That sounds like an incredible deal to me, right? That’s a 12x return.

But even if you spent $6,000 and got 1x customer, even if that customer only signed on at $2,000 per month, that’s still a 4x return! –?

$1 in, $4 out.

Some of the best Facebook ad results I’ve been able to achieve for my clients came down to using videos.?

People just prefer watching a video advertisement to a text/image combo - but that’s not to say you shouldn’t test things for yourself.

If you want help with your video advertising strategy, make sure to check out this free training .

At the time of this video, you’ll be speaking to me, but you might be watching this video 3x years from the upload date and things might have changed - either way, book a call to find out!

If you have any questions just ask me in the comments below and I’ll do my best to answer those personally for you.

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