Related Posts
Podcasts
Imagine this: As the head of marketing for an esteemed RTO, you sit down at your desk, the dim glow of the early morning sun seeping through your blinds. A freshly brewed cup of coffee in hand, you open your institution’s social media metrics from the past month. Engagement is up, and so are enrollments. It’s clear that advertising on social media platforms works. But as you click over to the monthly budget breakdown, there’s that niggling question again: “Am I paying too much? Is there a better way?”
The world of social media advertising can often feel like a maze—filled with fluctuating algorithms, a tonne of audience targeting options, and, most dauntingly, a range of costs that seem to change with the wind.
For RTOs in 2025, the stakes are higher than ever.
If you didn’t already know, “RTO” stands for “Registered Training Organisation”, which refers to any business that offers training services that result in registered qualifications.
Every dollar counts, especially when you’re trying to reach potential students in an increasingly competitive digital space.
Navigating this digital landscape can feel overwhelming, if not isolating.
But you’re not alone in this quest.
We’ve been there, right at that desk, sipping that coffee, and delving deep into the intricacies of social media advertising costs.
Armed with current data, tried-and-tested strategies, and a passion for RTO success, this article will guide you through the real costs of advertising on social media for RTOs in 2023, ensuring you’re equipped to make confident, informed decisions.
Cost of Facebook & Instagram Advertising in 2025
What metrics should we look at?
There are many metrics we can look at to get an idea of averages, but here are some of the most important:
- Cost per click: the amount it cost to generate one click, which usually (but not always) means a landing page view
- Cost per 1000 impressions: this gives you an indication of the number of times your ad can be shown within a certain budget
- Cost per lead: this gives you an indication of how much you can expect to pay for every lead
So, what do the averages look like?
Average Costs Overall
The average cost of ads globally is approximately $0.94 per click and $12.07 per 1000 impressions (Shopify) and the average cost per lead globally is $25.91.
Cost of Facebook & Instagram Ads in 2025 for RTOs
The industry you’re in has a massive influence on the cost you pay per click and per lead.
In Australia, the average Cost Per Click (CPC) across all industries is $1.72. When looking at RTOs specifically, the average cost per click sits around $1.06.
It’s also important to consider the Cost Per Result (aka Cost Per Action). This is akin to the cost per conversion action. For example, cost per lead, cost per purchase, cost per app install, and so on. Depending on your business, the specific customer action will be different.
In Australia, the overall average Cost Per Action across all industries is $18.68, and for RTOs, it sits around $7.85. However, keep in mind that depending on other factors, this cost may increase or decrease for you (for example location and competition). Averages give you an idea of what you can expect to pay, but this isn’t necessarily always the case.
Let’s take a look at what factors might influence your costs, and how you can use them for your benefit.
The factors that impact cost on Facebook & Instagram
Let’s take a look at how the Facebook system determines the cost for advertisers.
The formula that determines the winning ad in an auction is written as:
[Advertiser Bid] x [Estimated Action Rates] + [User Value] = Total Value.
The ad with the highest total value in an auction will win and will generally pay less for an impression the more valuable the ad is to the user.
So, the advertiser bid, estimated action rates, and user value impacts the cost for advertisers. On top of this, you’ll find that industry, competition levels, and the campaign settings you choose will also influence the cost of your ad.
Let’s take a look at what these mean.
Advertiser Bid
When you advertise across Facebook, you must choose a specific bid strategy to use. Facebook will bid for you, according to the settings you have chosen, which will impact how, when and who you compete with in the ad auction, which will have an impact on your results.
There are two main bid strategies you can choose from:
- Lowest cost bid strategy: this tells Facebook to aim for the lowest possible cost per optimisation event (which could be a purchase, landing page view etc. depending on your campaign objective and ad set settings).
- Target cost bid strategy: this tells Facebook to aim for the average cost to be within a 10% range of the cost control you enter.
Using the first option will result in your cost per event (such as your cost per lead) fluctuating more, which also means that it’s easier to win in the auction stage because you aren’t adding any cost control measures and instead allowing Facebook to be flexible in delivering your ad at different costs.
Using the second option will result in a tighter and less fluctuating cost per event, however, you may lose out in some auctions due to this and your cost may end up being higher.
Ultimately, the bidding method you choose will influence the cost you pay.
Estimated Action Rates
Each ad has an optimisation event, often an action you want a person to take, such as clicking to a website or becoming a lead.
Estimated action rates represent how likely Facebook thinks someone is to take that action. The higher the estimated action rate, the lower you’ll likely spend to get the same result.
Facebook bases their estimates on the user’s previous actions and your ad’s historical performance data. This helps Facebook deliver your ads to the people most likely to give you the result you care about.
The audience you choose to target and the ad you choose to use, as well as the previous performance of your ad account, will ultimately influence the estimate action rate, ultimately impacting the cost you pay.
User Value
User value is another factor influencing the amount you pay per result on Facebook and Instagram.
The more relevant your ad is to your audience, the more user value Facebook perceives it to have. And as a result, the more relevant Facebook predicts an ad will be to a person, the less it may cost the advertiser to show it to them, all other things being equal.
By encouraging positive feedback in your copy and on your landing page, you can improve ad relevance and thus increase user value, increasing your chances of paying a lower cost per result.
Post Click Experience
Ads that link to web pages with poor user experience will likely carry low user value and increase costs.
Here are a list of factors that impact the post click experience:
- Slow load time: advertisers with fast website performance may see higher click rates for certain audiences and at a lower cost
- Poor content experiences: Facebook takes into account any content on landing pages that’s prohibited by their Advertising Policies. If you have any of the following on your landing page or website, it may increase your costs:
- A disproportional volume of ads relative to content – in other words, if there’s many ads but not much on your website, this will have a negative impact
- Sexually suggestive or shocking content. See Facebook’s policies about sensational content and adult content
- Malicious or deceptive ads that include prohibited content as defined in our Advertising Policies
- Pop-up ads or interstitial ads that block people from engaging with the web page
By ensuring your landing page has a faster loading time and better content experiences, you can increase post click experience, user value and thus reduce the cost you pay per action.
Ad Quality
Ad quality is another factor that makes up user value and can be used to decrease costs on Facebook & Instagram. It is determined by Facebook through two measures:
- Your target audience’s history of level of interest in content similar to yours (this is determined by their level of interaction with similar content in the past)
- The relevance of your ad content to the users you target
- Overall ad quality, determined by ad interactions, both positive and negative
Check out Facebook’s guide on how to use ad relevance diagnostics.
So to sum up, the factors that impact the amount you pay on Facebook & Instagram ads are:
- Advertiser bid
- User value
- Estimated action rates
What Can You Do to Decrease Costs on Social Media Advertising?
Now you know what the average costs are overall and the differences between each industry, and you understand the factors that influence these costs.
So, what can you do to decrease your costs?
Going back to our formula, you need to improve either advertiser bid, estimated action rates or user value:
[Advertiser Bid] x [Estimated Action Rates] + [User Value] = Total Value.
User Value is one factor that you can have a lot of control over, so let’s take a look at what you can do about this to decrease costs.
Decrease Costs through User Value
To improve user value and therefore decrease costs, you need to improve ad relevance, post click experience, or ad quality.
Improving Ad Relevance
- Encourage your audience to engage with your ad in your copy. The more users engage with your ad, the more positively your ad relevance will be impacted
- Build a high converting landing page. The more positive actions users take on your landing page, the higher the ad relevance
- Ensure you have proper data tracking set up on your website and that it is feeding through to Facebook. You need Facebook to be able to track events (such as leads, clicks on relevant buttons etc) to determine ad relevance
Improving Post Click Experience
- Increase your website or landing page load time
- Make sure your content on your website follows Facebook’s advertising guidelines
- Ensure that the content you use in your ad matches what you have on your website. If they’re vastly different, it will decrease your post click experience
Improving Ad Quality
- Make sure you’re targeting a relevant audience that is likely to engage with your ad
- Make sure your ad content is relevant to the audience you’re targeting
- Encourage positive engagement on your ad through your copy, or use creatives and copy that is likely to garner positive interactions with your audience
By following these steps, you can reduce your costs and end up paying less per lead.
However, keep in mind that it’s not black and white. Even if you follow these steps, you won’t necessarily see a cost lower than the averages we’ve already covered.
So, what’s next?
Social media advertising in 2025 is no longer a choice but a necessity for RTOs. However, it doesn’t have to be a confusing or overwhelming process.
Every dollar spent needs to yield tangible results, making the decision-making process even more critical.
As you sip that coffee and crunch those numbers, here’s what you need to remember:
- Average Costs Matter but Are Just a Starting Point: Expect to spend around $0.94 per click and $12.07 per 1000 impressions with an average CPA of $25.91
- Factors Impacting Costs are Multi-faceted: The formula that decides your ad’s fate involves the advertiser bid, estimated action rates, and user value. By understanding the dynamics of each, you can strategise better and potentially drive down costs
- Leverage User Value: Of the factors mentioned, user value is one you can influence without a budget increase. Enhancing ad relevance, post-click experience, and overall ad quality can be game-changers. Aim for higher relevance scores, ensure your landing pages provide an excellent user experience, and regularly review your ad’s quality
Lastly, remember, while the costs and strategies are essential, it’s the value and quality of the education you provide that will always be paramount.
Want to learn about how to make a creative ad that generates revenue? Check out our 5 point framework for social media ads.
