Want to know the secret to lowering your Facebook ad costs? We know how crazy it can be to see those costs slowly going up and have no idea how to fix it.

In this post, we are going to give you 5 tips on how to reduce your Facebook ad costs so you can make the most of your budget.

Why are my Facebook ad costs going up?

If you find that your ads are costing you much more than you thought (or more than you would like) or you see that your ads are slowly producing fewer results, you may be paying too much for your ads.

This can be especially frustrating if you don't know why your ads are behaving this way when they were doing well before. Usually, your Facebook ad costs go up for a few simple reasons.

We will now discuss these issues in more detail:

1. Start using Retargeting ads
2. Keep the frequency of your ads below 5
3. Change your ad formats and messaging
4. Don't rely on automated placements
5. Pay attention to the Relevance Diagnostics of your ad

If you want to reduce the cost of your Facebook ads, read on.

Use Retargeting Ads

We use Facebook to advertise because of its targeting options. And the magic of Facebook targeting really comes when you start using retargeting. Retargeting ads are shown to people who have interacted with your page, website or content. These ads work well because you show them to an interested audience.

You have a lot of targeting options for Facebook ads (we took this all verbatim from the Facebook help page):

• Viewed or added to cart but not bought: Promote products from your catalogue to people who have viewed or added them to their cart.

• Added to cart but did not buy: Promote products from your catalogue to people who have added them to their cart.

• Upsell Products: Upsell products from your catalogue to people who have viewed products from your product set.

• Cross-Sell Products: Cross-sell products from your catalogue to people who have viewed products from your product set.

• Custom combination: Promote products from your catalogue to a Custom Audience based on how people have interacted with your products.
  
  If you choose this option, you can select audience interactions by selecting inclusions and exclusions.
  
  For example, you can include people who have added products to their cart in the past 45 days and exclude people who have bought products in the past 45 days.
  
  

We will show you how to set up retargeting ads. With retargeting ads, we recommend using Dynamic ads. You need a Facebook Pixel properly set up to collect data to use these ads.

How to set up Dynamic retargeting ads in Facebook?

1. Start creating your Dynamic ad
   
2. When you select your audience, choose Retarget ads to target people who have interacted with your products or service
   
3. Choose a retargeting option (we have covered these above)
   
4. Enter the number of days on which the action took place for your retargeting option
   
5. (Optional) Select Advanced Options to add a Custom Audience or Lookalike Audience to your targeting

This should lower your Facebook ad costs and increase your click-through and conversion rates. Do pay attention to your frequency when running retargeting ads. This refers to how often each person sees your ad. If these numbers get too high (more than 5) you run the risk of irritating your audience, which could cause you to lose customers.

If you don't already have a retargeting audience, you need to build one.


Read here Why retargeting is so important!

Keep ad frequency below 5

Perhaps you have the "if it ain't broke, don't fix it" kind of mentality when it comes to your ads. And while this idea may apply in general, it can be harmful to run your ads unchanged for a long period of time. Even if they work.

How is frequency calculated by Facebook?

Facebook tracks how many times your ads are shown on average to each person in your audience. Facebook gives its best estimate of the number of times each person in your audience has seen your ad.

The right frequency for your ads is between 1 and 4. When the ads reach a frequency of a 4, it is time to refresh the ad.

The way to keep your frequency low is to keep an eye on your frequency and adjust the creative part of your ads if necessary. If you have a little less time to do so, you can use Dynamic Ads which will prevent you from having to manually adjust your ads every so often. If you give Facebook enough interesting combinations, you can use those ads much longer than others before your frequency starts to increase. This will depend on the size of your audience and how many options you have uploaded.

Follow these steps to find the frequency of your ads:

1. Log in to your Ads Manager
   
2. Navigate to the Campaigns tab, Ad Set or Ad
   
3. If the frequency is not in one of your available columns, add the column
   
4. Click on the blue plus sign and find "Frequency" in the list
   
5. Tick to add it and click Save
   
6. Now you can see the numbers in the new column

Change ad formats and messaging

Even your biggest fans will get irritated if all they see is the same ad. When we talk about this problem, we are talking about one ad being seen too often. Now if you are thinking about frequency, we are happy about that! But this point applies more generally to your ad formats and messaging as a whole.

It is easy to find an ad format and style that works, make it a template and pump out the ads. Many companies make this mistake of using a standard ad format and style to then run as many ads as possible. That may be great for productivity or efficiency, but it's a bad marketing tactic.

If you look at major brand campaigns, you will notice that no one sticks to the same format, style, or messaging every time. Of course, logos, slogans and puns stay the same over time, because we need that continuity to build a relationship with your audience. But, they take risks with other aspects of advertising. And that includes changing:

• How to communicate with the audience
• What your message to them is
• What your images or videos look like
• Which products you show
  
  

You have to keep even your biggest fans interested, and you don't do that by showing the same thing over and over again. You need to strategically test out new styles and tones, especially if they are a big departure from your normal way of doing things, but you need to prioritise them. To test and track these ads, we recommend running A/B tests. Then create a document that you can use to keep track of what you test and how the ads perform.

Don't rely on automated placements

Depending on your campaign objective (clicks, video views, likes), your ads may be displayed on:

• Facebook
• Instagram
• Messenger
• In-stream video
• Marketplace
• Apps

By looking in the reports within your Ads Manager, you can find out the best placement for you. Follow these steps to find the right placement for your ads:

1. Log in to your Ads Manager
   
2. Navigate to the Campaigns tab, Ad Set or Ad
   
3. Navigate to Reports
   
4. If the placement is not in one of your available columns, add the column
   
5. Click on the blue plus sign and find "Placement" and possibly "Platform" in the list
   
6. Tick to add it and click Save
   
7. Now you can see the numbers in the new column
   

Once you know which placement is best for your ads, you can apply it by setting it up in Ads Manager and you do it in the following way:

1. Go to Ads Manager
   
2. Choose your objective and click Continue. However, not all objectives support all placements
   
3. Go to the placements section, Automatic placements (Recommended) is preselected
   
4. Choose Manual placements to exclude certain placements. Uncheck the box next to each placement that does not work for you to remove it
   
5. If you do not see a box, your ad type or objective does not support placement

You can also choose to disable placements by unchecking the Facebook, Instagram, Messenger or Audience Network checkboxes.

Pay attention to Ad Relevance Diagnostics

If you've been advertising on Facebook for a while, you know this topic by its old name: Ad Relevance Score. This has been replaced by Ad Relevance Diagnostics, which includes 3 measurements and means the following (we have taken all of this verbatim from the Facebook help page):

• Quality ranking is the perceived quality of your ad compared to ads competing for the same audience.

• Engagement Rate Ranking is the expected engagement rate of your ad compared to ads competing for the same audience.

• Conversion Rate Ranking is the expected conversion rate of your ad compared to ads with the same optimisation goal competing for the same audience.
  
  

Facebook measures whether you have a high-quality ad that is shown to the right audience. Facebook recommends looking for the ideal combination of ads and targeting, not just focusing on the ideal ads or targeting.

What is a good score?

You want each of the three metrics to be at or above average, ideally. If your Ad Relevance Diagnostics are below average, there's a chance your ads will cost quite a bit of money without seeing any results. You will see significant ad performance and cost improvements if you increase your metrics from below average to average or above average (by changing your creative and targeting). You will see small improvements if you increase your average score to above average, so focus on increasing your below-average scores if you have them.

Where can I find Ad Relevance Diagnostics in my account?

1. In your Ads Manager, navigate to your Ads tab (Ad Relevance only applies to Ads, not to Ad Sets or Campaigns).
   
2. After that, Quality Ranking, Engagement Rate Ranking, and Conversion Rate Ranking should be visible
   
3. If you do not see these columns, reset your column view to "Performance (Default)" or click on the blue plus sign to add the columns
   
4. You will then find the Ad Relevance Score

What do these Diagnostics mean?

None of that information is useful if you don't know what to do with the information you get, right? So, let's look at some possible outcomes and what that might mean for you.

If you have everything at average or above average levels, you are doing great and probably don't have to worry too much about adjusting the ads that run. If that campaign is over, it is one that we would consider running again (or running a similar campaign) for a similar audience.

But suppose your conversion rates are below average, but your engagement and quality scores are above average. That means you might:

• You are targeting an audience with lower interest than you think
• You don't have an attractive CTA
• That you lose people after the click through website or leadform experience
  
  

We would look for the simplest solutions first. Here's what you can do:

• Target a higher-interest audience
• Write a better CTA
  
  

If the performance of your ads is still not improving, look at the post-click experience and change it.

In some cases, you don't need to worry about a below-average Conversion Rate Rank. We know, it may sound weird, but sometimes you already have a lower conversion rate because you sell high-ticket items, for example. If the conversion rate meets your expectations, don't worry about it.

Suppose your Facebook quality score is below average, but your engagement and conversion are above average.

In that case, most people would say, "I need to design better ads", and that may be true.

Or, it could be that you are just not showing the ads to the right people. It means they are low quality for that audience, although they might not be considered low quality for any other audience.

It is important to look at each metric in combination with the other two and make adjustments based on that. Also remember that you will need to make adjustments all the time and that you will just have to test certain things as you go along. A/B testing can be super useful for this too.

Conclusion

When you run ads, you want to show your ad to the best audience at the best price. Even though Facebook is the most affordable ad platform for small businesses (for now), you can spend more money than you want if you don't optimise your ads properly. Ads will naturally increase in cost over time. No campaign can last forever.

But, now you know what to do to lower your Facebook ad costs.