But Facebook Ads are essential for companies that want to grow. They're awesome. You can use Facebook advertising to cheaply build brand awareness and affinity or create new demand for your products or services.
Whether you're new to running Facebook ads or you're about to start targeting a new industry, it's always helpful to know where you stand.
How does your Facebook ad performance compare to the rest of your industry?
To find out, Mark Irvine of WordStream recently crunched some numbers, examining 256 WordStream client accounts based in the U.S. This represents $553,000 in aggregate Facebook spend.
We wanted to know what the average click-through rate (CTR), cost per click (CPC), and conversion rate (CVR) was on Facebook ads.
We came up with the following new Facebook Industry Benchmarks for 18 industries (Apparel, Auto, B2B, Beauty, Consumer Services, Education, Employment & Job Training, Finance & Insurance, Fitness, Home Improvement, Healthcare, Industrial Services, Legal, Real Estate, Retail, Technology, and Travel & Hospitality).
Average Click-Through Rate
The average CTR across all industries is .90 percent. But your ads aren't competing against every business on Facebook.
Really, you need to worry more about competing with businesses in your own industry. So check out the chart below to see the average Facebook ad click-through rate for your industry.
You'll notice that only five industries (Legal, Retail, Apparel, Beauty, and Fitness) had an average CTR above 1 percent. Employment & Job Training had the lowest average CTR (0.47 percent) of the 18 industries we looked at.
Facebook rewards advertisers who create ads with above average CTRs. Ads that have high CTRs get a discount, which means you pay less for ads; the lower your CTR is, the more you'll pay.
Speaking of costs...
Average Cost Per Click
Finance & Insurance companies are spending the most for each click they get - $3.77. However, these Facebook CPCs probably seem like a steal when you consider Google AdWords keywords like "insurance," "loans," and "mortgage" are ridiculously expensive, going for around $50 per click.
The cheapest Facebook ad clicks are in the Apparel ($0.45), Travel & Hospitality ($0.63) and Retail ($0.70) industries.
The average CPC for Facebook ads across all industries is $1.72.
Average Conversion Rate
Clicks are important, but for many businesses it's the almighty conversion that matters.
Fittingly enough, the Fitness industry has the healthiest Facebook conversion rates (14.29 percent). Other industries with Facebook conversion rates above 10 percent are Education (13.58 percent), Employment & Job Training (11.73 percent), Healthcare (11 percent) real estate (10.68 percent), and B2B (10.63 percent).
Technology had the worst conversion rate, just 2.31 percent. Travel & Hospitality and Retail also had conversion rates around 3 percent (2.82 percent and 3.26 percent, respectively).
The average CVR for Facebook ads across all industries is 9.21 percent.
The full WordStream Facebook advertising benchmarks infographic includes additional data on the average cost per action.