Paid social is the lifeblood of growing ecommerce brands. Unfortunately, few owners, operators, and marketers play the game with a clear strategy on how to win. Fewer still calculate Facebook ad costs on a single outcome: profit. Good news. That’s exactly what this article contains: a Facebook budget calculator, step-by-step instructions, and a video tutorial. To cover those ingredients, we’ll ask and answer three questions . How Much Should You Spend on Facebook Ads? What Type of Facebook Ad Budget Performs Best? Where Does Campaign Budget Optimization Go Wrong? How Much Do Facebook Ads Cost for Ecommerce? Before the acronyms, formulas, and tactics . let’s start with benchmarks. Why? Because large and small businesses alike face the same questions: What is a good CPM for Facebook? What’s the average CPC? How does that stack up against ROAS? Finding reliable answers isn’t easy. Especially nuanced answers that separate ecommerce from other industries and distinguish between verticals. Not to mention prospecting versus remarketing. The numbers below come from our ecommerce data newsletter — a set of ~200 online retailers totaling +$5.9 billion in sales between 2020–2022. You’ll see two timeframes . Trailing 12 months (TTM): the 12 months leading up to publication Previous 12 months: the 12 months before TTM Don’t let those timeframes confuse you. Essentially, we’re looking back at the last 24 months, breaking them into two 12-month blocks, and comparing them year-over-year (YoY). First, the big picture: Facebook and Google costs over the last two years. Facebook CPM Trailing 12 months (2021–22): $14.10 Previous 12 months (2020–21): $9.92 YoY Change: +42.1% Google CPC Trailing 12 months (2021–22): $0.83 Previous 12 months (2020–22): $0.67 YoY Change: +22.7% Facebook ROAS Trailing 12 months (2021–22): 1.53 Previous 12 months (2020–21): 1.76 YoY Change: -13.2% Google ROAS Trailing 12 months (2021–22): 4.51 Previous 12 months (2020–21): 5.31 YoY Change: -15.0% In short, the cost to advertise has increased while the efficiency of advertising has declined. Much of that one-two punch can be traced back to post-COVID struggles, broader ecommerce trends, and the effects of iOS 14.5 on digital advertising. Having identified the trailing 12 months’ CPM and CPC, it’s tempting to assume we have an answer to our opening question: How much do Facebook ads cost? Average Facebook CPM is $14.10. Average Facebook CPC is $0.83. However, that’s far from the full picture . Next, let’s compare all ecommerce to its dominant verticals, separated into non-holiday versus holiday costs. 1. All Ecommerce Brands Facebook CPM TTM Non-holiday: $13.34 Holiday (Nov–Dec. 13): $19.97 Facebook CPC TTM Non-holiday: $0.85 Holiday (Nov–Dec. 13): $1.15 Google CPC TTM Non-holiday: $0.84 Holiday (Nov–Dec. 13): $1.00 2. Fashion & Apparel Facebook CPM TTM Non-holiday: $12.66 Holiday (Nov–Dec. 13): $18.78 Facebook CPC TTM Non-holiday: $0.70 Holiday (Nov–Dec. 13): $0.92 Google CPC TTM Non-holiday: $0.55 Holiday (Nov–Dec. 13): $0.71 3. Cosmetics & Beauty Facebook CPM TTM Non-holiday: $20.41 Holiday (Nov–Dec. 13): $31.95 Facebook CPC TTM Non-holiday: $1.17 Holiday (Nov–Dec. 13): $1.72 Google CPC TTM Non-holiday: $1.12 Holiday (Nov–Dec. 13): $1.53 4. Food & Beverage Facebook CPM TTM Non-holiday: $14.43 Holiday (Nov–Dec. 13): $16.89 Facebook CPC TTM Non-holiday: $1.13 Holiday (Nov–Dec. 13): $1.31 Google CPC TTM Non-holiday: $0.94 Holiday (Nov–Dec. 13): $0.97 5. Health & Wellness Facebook CPM TTM Non-holiday: $20.95 Holiday (Nov–Dec. 13): $30.86 Facebook CPC TTM Non-holiday: $1.52 Holiday (Nov–Dec. 13): $2.04 Google CPC TTM Non-holiday: $1.05 Holiday (Nov–Dec. 13): $1.17 For clarity — and, in particular, to highlight the differences — here are all those data points in table form: Industry Facebook CPM Facebook CPC Google CPC Ecommerce $13.34 $0.85 $0.84 Ecommerce: Holiday $19.97 $1.15 $1.00 Fashion $12.66 $0.70 $0.55 Fashion: Holiday $18.78 $0.92 $0.71 Health $20.95 $1.52 $1.0...