If you Google the question, you’ll see this is a hotly debated topic. Many agencies here in Singapore have an opinion.
Some will say the average cost per click is $2.32 SGD while others say it’s $0.93 SGD.
Though these numbers aren’t drastically different, there are a few problems with most of the data out there on Facebook ad costs in Singapore:
- Many of these estimates come from US or global statistics – not original data from Singapore.
- Many rely on Facebook’s estimates for audiences interested in “Singapore” – which is flawed in more ways than one
- Very few of these claims take into account differences in campaign objectives and industry, which play a big role in ad costs
- Some of the data is 2-5 years old
Our team really wanted to know how much it costs to run Facebook and Instagram ads in Singapore, and we weren’t satisfied with any of the data claims out there.
So we gathered our own original data from nearly $1.5 million in Facebook / Instagram ad spend over the last year.
This post will look into:
- The (actual) average CPC and CPM in Singapore for Facebook and Instagram
- Average costs based on campaign objective and industry
- The true cost of running ads on Facebook or Instagram
- How to project ROI for an advertising campaign
The Real Cost of Advertising in Singapore
The data we’ve gathered is based on actual account data from ads run in Singapore throughout 2021. The below report shows how much ads cost each month broken down by objective, industry, and platform (Facebook or Instagram).
As mentioned in the intro, these are the three biggest factors that impact digital marketing costs.
- Campaign Objective: Ads run to generate leads are generally the most expensive, while ads focused primarily on brand awareness and reach are generally the cheapest.
- Industry: Industry costs are based primarily on competition. Ads tend to be more expensive in more competitive markets and sectors.
- Platform: Though it has changed over times and continues to vary, Facebook ads are a little more affordable than Instagram ads – but this depends largely on where the ad shows (in the feed, story, video, etc..)
How Much Do Facebook Ads Cost in Singapore?
The average cost per click of Facebook ads in Singapore is $0.55 SGD. The average CPM is $7.80 SGD.
Ads focused on lead generation and sales average $1.33 SGD per click, while ads whose goal is to generate brand awareness average $0.48 SGD per click.
Check out the complete data:
How Much Do Instagram Ads Cost in Singapore?
Based on our data, $2.05 SGD is the average cost per click of Instagram ads in Singapore. The average CPM for Instagram ads is $8.08 SGD.
How Much Do Facebook and Instagram Ads Cost by Industry?
As mentioned, objective isn’t the only factor that plays into ad costs – industry has a big impact as well.
We broke our data down by industry to find that healthcare and finance advertising is the most expensive in Singapore. Advertising for nonprofits and industrial brands is the most affordable.
The True Cost of Running Facebook and Instagram Ads
The true cost of advertising on Facebook and Instagram isn’t just the price you’re paying for the ads. You also need to factor what you’re paying the employee or agency running them.
So for example, let’s say you wind up deciding on a monthly budget of $2,500 SGD.
If you have an employee run these ads, you’ll need to consider how much time it requires of them and how much of their salary goes to their management and optimization of the ads. Let’s say you pay this employee $50,000 per year and about one fifth of their time goes toward these ads. Technically, you’d be spending $3,300 per month.
Note: Don’t let an intern or someone without experience run your ads. It’s tempting to have someone else on your marketing team run them, but without any prior experience, you won’t get the results you want.
If you don’t run these ads yourself, your other option would be to engage a digital marketing agency. Every agency will have a different approach and pricing structure, but let’s say they charge a base fee of $1,000 per month + 10% of your ad spend. You’d be paying $1,250 per month to the agency.
So your all-in cost to run Facebook ads in this scenario would be $3,750 per month.
A good agency will make this money well worth your while – and if the ads aren’t as effective as they should be, a good agency will work with you to consider other channels, tactics, and strategies.
How Much Should You Invest in Facebook and Instagram Ads?
So you know how much Facebook and Instagram ads cost in Singapore, and you have an idea of the extra costs associated with running them.
But just how much should you invest in a Facebook advertising campaign?
The ROI of Social Media Advertising
The question you’re probably asking – and should be asking – is what kind of ROI (Return On Investment) should I expect from Facebook ads? In other words, “If I spend $2,500 a month on Facebook ads, how much revenue will I earn from it?”
Before we dive into how to calculate your potential ROI, let’s differentiate between two primary types of campaigns. There are lots of different objectives within Facebook, but to keep things simple, let’s look at two primary goals.
Reach and Awareness Ad Campaigns
A reach or brand awareness campaign is perfect for:
- Introducing your brand in a new location or region
- Introducing a new product or service
- Remaining top-of-mind within a competitive industry
- The first stage of a funnel or retargeting campaign
The goal is not necessarily to generate a lead or sell a product, but to build awareness and grow an audience.
Calculating your ROI (or potential ROI) for a campaign like this can be tricky. Because few direct deals or sales will come from the campaign itself, it’s wise to take a long term view by considering things like:
- Contacts collected
- New social media followers
- Website traffic
- Branded search volume
All of the above can help future acquisition or lead generation campaigns. So though a brand awareness campaign might not lead to direct ROI, it can certainly improve the ROI of future campaigns and create customers down the road.
Lead Generation and eCommerce Ad Campaigns
When running lead generation or sales campaigns, it is possible to calculate potential ROI (or ROAS – Return on Ad Spend) – if you have some key data points. To make an accurate projection, you’ll need to know:
- The average CPC for your industry. You can find these above for Singapore!
- Your average website conversion rate. How often to website visitors convert on your site? You’ll probably use a dedicated landing page for your ad campaign, but your average conversion rate will give you an idea – as long as the offer is the same or similar.
- Your average lead-to-close rate. Once you’ve collected a lead, you’ll need to know the percentage that will close.
- The average lifetime value of a customer. Once a deal has closed, it’s important to know the average deal value or average lifetime value of a customer.
Once you have the above data points, you can use this calculation to project ROI.
For lead generation campaigns:
((((Advertising Budget / Average CPC) x Avg Conversion Rate) x Average Lead-to-Close Rate) x Avg Customer Lifetime Value) / Project Budget
Let’s look at an example:
- Advertising Budget = $20,000
- Average CPC = $0.90
- Website conversion rate = 2.5%
- Lead-to-close rate = 10%
- Customer Lifetime Value = $10,000
- Agency Costs or Employee Salary= $15,000
(((($20,000 / $0.90) x 2.5%) x 10%) x $10,000) / $15,000 = 3.70 = 370% ROAS
For sales and eCommerce campaigns:
(((Advertising Budget / Average CPC) x Avg Conversion Rate) x Avg Sale Value)
/ Project Budget
Let’s use some of the same numbers, but say average sale value is $50:
((($20,000 / $0.90) x 2.5%) x $50) / $15,000 = 1.85 = 185% ROAS
Should You Invest in Facebook Ads?
There’s a lot to consider when thinking about running a social media ad campaign. We’ve helped a lot of businesses think through and run successful campaigns.
If you’re considering investing in Facebook ads, our team would love to help. Sign up for a free digital marketing audit and let’s chat!