Advertising on Facebook and Instagram is an essential strategy for businesses in Malaysia to reach their audience and drive sales. However, understanding and managing Instagram and Facebook advertising cost in Malaysia is crucial to ensure a good return on investment (ROI).
Many factors influence ad costs, including audience targeting and bidding strategies. Without proper optimisation, businesses may end up spending more than necessary. By understanding key metrics and adopting cost-effective strategies, businesses can maximise ad performance while staying within budget.
This guide explores how Malaysian businesses can optimize Facebook and Instagram ad costs, covering important metrics, budget allocation tips, and expert strategies to help improve campaign efficiency.
Key Takeaways
- Understanding CPC, CPM, CTR, ROAS, and conversion rates helps businesses track and optimise Facebook & Instagram ad performance.
- Industry competition, audience targeting, ad placement, bidding strategy, and seasonality impact advertising costs.
- CPC ranges from RM0.50 – RM6.00, while CPM varies from RM8 – RM50, depending on industry and ad format.
- A/B testing, remarketing, audience segmentation, and smart budget allocation help reduce costs and maximise ROI.
6 Key Advertising Metrics for Instagram and Facebook
To optimise Facebook and Instagram advertising costs in Malaysia, businesses must first understand key performance metrics. These indicators help measure the effectiveness of ad campaigns and guide budget allocation for better returns.
| Metric | Definition | Importance | Benchmark Performance |
| Cost Per Click (CPC) | The cost incurred for each click on an ad. | Lower CPC means more clicks for the same budget. | RM0.50 – RM2.00 per click (varies by industry). |
| Cost Per Mille (CPM) | The cost of reaching 1,000 users with an ad. | Essential for brand awareness campaigns. | RM10 – RM40 per 1,000 impressions. |
| Click-Through-Rate (CTR) | The percentage of users who click on an ad after seeing it. | Higher CTR indicates an engaging and relevant ad. | 1% – 5% (higher for engaging content or niche audiences). |
| Return of Ad Spend (ROAS) | Revenue earned for every RM spent on ads. | Positive ROAS shows a profitable campaign. | 3x – 5x for e-commerce, 2x+ for lead generation. |
| Conversion Rate | The percentage of users who complete a desired action (purchase, signup, etc.). | Higher conversion rates mean better campaign effectiveness. | 2% – 10% (depends on industry and landing page quality). |
| Ad Relevance Score (Facebook)/Quality Ranking (Instagram) | Facebook and Instagram’s measure of ad relevance and engagement quality. | A higher score reduces costs and improves ad performance. | 6 – 10 (higher scores lead to lower ad costs and better reach). |
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6 Factors That Affect Instagram & Facebook Advertising Cost
Understanding what influences Facebook and Instagram advertising costs in Malaysia is essential for businesses looking to optimise their ad spend.
Several factors determine how much you’ll pay per click, impression, or conversion. Here’s a breakdown of key factors:
1. Industry & Competition
Different industries have varying levels of competition, which affects ad costs.
Highly competitive industries like finance, real estate, and e-commerce often have higher CPC and CPM rates because multiple advertisers bid for the same audience.
Niche markets with less competition may experience lower advertising costs.
Example
A luxury real estate company in Kuala Lumpur wants to generate leads for million-ringgit properties. Since real estate is a competitive industry, the CPC may range from RM2 – RM5, significantly higher than a local clothing brand that only pays RM0.50 – RM1 per click.
2. Target Audience & Demographics
The audience you target plays a major role in ad pricing. Specific factors such as age, location, interests, and behaviour influence costs.
- Targeting high-income professionals may cost more than general audiences.
- Ads directed at urban areas like Kuala Lumpur and Selangor often have higher costs compared to less populated regions.
- Audiences with higher engagement levels typically result in better ad efficiency, reducing overall CPC and CPM.
Example
A premium skincare brand targeting women aged 25-40 in urban areas like Kuala Lumpur and Petaling Jaya will likely face higher advertising costs due to high demand from competing brands. On the other hand, a business targeting students for affordable stationery products may enjoy a lower CPC of RM0.30 – RM0.80.
3. Ad Placement & Format
Where and how your ad appears on Facebook and Instagram can impact its cost:
- Placements – Ads in Facebook Feeds and Instagram Stories generally cost more than placements in the Audience Network or Messenger.
- Ad Formats – Video ads often have higher engagement but can be more expensive than image-based ads. Reels and Stories ads have lower costs due to their high engagement rates.
- Device Type – Ads shown on mobile devices may perform differently compared to desktop, influencing cost efficiency.
Example
A fast-food chain runs an Instagram Story Ad promoting a limited-time burger deal. Since Stories have higher engagement rates, the cost is RM8 – RM15 per 1,000 impressions. In contrast, a Facebook News Feed ad promoting a corporate catering service might cost RM15 – RM40 per 1,000 impressions, as it requires more targeting precision.
4. Bidding Strategy & Ad Relevance
Facebook and Instagram ads use an auction-based system where businesses bid for ad placements. The way you bid impacts costs:
- Manual vs. Automatic Bidding – Manual bidding allows more control but may increase costs if not optimised, while automatic bidding adjusts to find the best price.
- Ad Relevance Score & Engagement – Facebook assigns a quality score based on how relevant your ad is to the target audience. Higher relevance results in lower costs.
- Engagement Levels – Ads that receive more interactions (likes, shares, comments) tend to cost less as they appear more valuable to users.
Example
A fitness app runs two ad campaigns:
- Campaign A: Uses high-quality visuals, clear copy, and relevant audience targeting, achieving a Relevance Score of 8/10 and a CPC of RM1.20.
- Campaign B: Uses generic content with no specific targeting, getting a Relevance Score of 4/10 and a CPC of RM3.50.
This shows that higher relevance scores reduce advertising costs and improve ad performance.
5. Seasonality & Market Trends
Advertising costs fluctuate throughout the year due to seasonal trends:
- Peak Seasons – Festive sales periods like Chinese New Year, Hari Raya, 11.11 Sales, and Christmas drive up competition, increasing ad costs.
- Off-Peak Periods – Advertising during less competitive months can result in lower CPC and CPM rate.
- Economic Trends – Market conditions, such as consumer spending patterns and inflation, may impact digital ad costs.
Example
A fashion e-commerce store runs ads for Hari Raya promotions in March, with a CPC of RM1.80 due to high competition. In contrast, when they advertise off-season in September, the CPC drops to RM0.80, as fewer brands are running ads during this period.
6. Campaign Objective & Funnel Position
The goal of your campaign influences costs:
- Awareness Campaigns (Brand Reach, Video Views) – Generally lower CPC and CPM since they focus on engagement and visibility.
- Consideration Campaigns (Traffic, Lead Generation) – Moderate cost, as they encourage user action without immediate purchases.
- Conversion Campaigns (Sales, Sign-ups, Add-to-Cart) – Higher costs due to their direct impact on business revenue.
Example
A travel agency runs three different campaigns:
- Brand Awareness (Reach & Engagement) – Promoting travel destinations with video content, achieving a low CPC of RM0.50 since engagement is high.
- Consideration (Traffic & Lead Generation) – Encouraging users to click and learn more about tour packages, with a moderate CPC of RM1.50 – RM2.00.
- Conversion (Bookings & Sales) – Driving actual purchases with an urgency-based CTA, costing RM3 – RM6 per click, as sales-driven campaigns typically have higher competition and conversion costs.
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Estimated Ad Costs in Malaysia for Facebook & Instagram
The cost of running Facebook and Instagram ads in Malaysia varies depending on several factors, including industry, competition, audience targeting, and ad objectives. While ad costs fluctuate due to market conditions and bidding strategies, businesses can use the following estimates as a general guideline.
1. Cost Per Click (CPC)
CPC refers to the amount you pay for each click on your ad. The more competitive the industry or target audience, the higher the CPC.
| Industry | Estimated CPC (RM per Click) |
| E-commerce & Retail | RM0.50 – RM2.00 |
| Finance & Insurance | RM2.00 – RM6.00 |
| Real Estate | RM1.50 – RM5.00 |
| F&B (Restaurants) | RM0.30 – RM1.50 |
| Education & Training | RM1.00 – RM3.50 |
| Travel & Hospitality | RM0.80 – RM3.00 |
Tip: Lowering CPC involves improving ad relevance, testing different creatives, and refining audience targeting.
2. Cost Per Mille (CPM) – Cost Per 1,000 Impressions
CPM measures how much businesses pay to reach 1,000 people on Facebook or Instagram.
| Ad Type | Estimated CPM (RM per 1,000 Impressions) |
| Facebook Feed Ads | RM15 – RM40 |
| Instagram Feed Ads | RM12 – RM35 |
| Instagram Story Ads | RM8 – RM20 |
| Facebook Video Ads | RM20 – RM50 |
| Messenger Ads | RM10 – RM30 |
Tip: Using high-engagement formats like videos and Instagram Stories can lower CPM by improving user interaction.
3. Click-Through Rate (CTR) Benchmark
CTR indicates how often users click on your ad after seeing it. A higher CTR means more effective ad engagement.
| Industry | Average CTR (%) |
| E-commerce & Retail | 1.5% – 3.5% |
| Finance & Insurance | 0.5% – 1.5% |
| Real Estate | 1.0% – 2.5% |
| F&B (Restaurants) | 2.0% – 5.0% |
| Education & Training | 1.2% – 3.0% |
| Travel & Hospitality | 1.8% – 4.0% |
Tip: Improve CTR by writing compelling ad copy, using high-quality visuals, and A/B testing different ad creatives.
4. Cost Per Lead (CPL) for Lead Generation Ads
For businesses running lead generation ads (such as sign-ups, inquiries, or form submissions), costs depend on industry and audience.
| Industry | Estimated CPL (RM per Lead) |
| E-commerce & Retail | RM5 – RM20 |
| Finance & Insurance | RM15 – RM60 |
| Real Estate | RM10 – RM50 |
| Education & Training | RM8 – RM30 |
| B2B Services | RM10 – RM40 |
Tip: Optimising landing pages, using engaging lead magnets, and remarketing to interested users can help reduce CPL.
5. Return on Ad Spend (ROAS) Expectations
ROAS measures the revenue generated for every RM1 spent on ads. A positive ROAS means the campaign is profitable.
| Industry | Target ROAS (RM Earned per RM1 Spent) |
| E-commerce & Retail | 3x – 5x |
| Finance & Insurance | 2x – 4x |
| Real Estate | 3x – 6x |
| Education & Training | 3x – 5x |
| F&B (Restaurants) | 2x – 4x |
Tip: Using Instagram and Facebook Remarketing with Custom and Lookalike Audiences can significantly boost ROAS by re-engaging potential buyers.
7 Ways to Optimise Budget for Instagram & Facebook Ads in Malaysia
Businesses need a strategic budget allocation plan to maximise Facebook and Instagram advertising costs in Malaysia.
Proper budgeting helps ensure cost-effectiveness, higher engagement, and better ROI. Here are key strategies to efficiently allocate your ad spend:
1. Set Clear Advertising Objectives
Before allocating your budget, define your campaign goals:
- Brand Awareness – If the goal is to increase visibility, allocate more budget to Reach & Engagement Ads with a lower Cost Per Mille (CPM).
- Lead Generation – Focus on Traffic and Lead Ads, which may have a higher Cost Per Click (CPC) but generate valuable leads.
- Sales & Conversions – Allocate a bigger budget for Conversion Ads, as these typically have the highest cost per result but deliver direct revenue.
Example
A fashion e-commerce store looking to drive direct sales should dedicate 60% of its budget to conversion-focused ads, while a new brand entering the market may allocate 70% to awareness ads.
2. Use the 70-20-10 Budgeting Rule
To balance risk and optimise performance, businesses can follow the 70-20-10 rule for ad budget allocation:
- 70% – Main proven campaigns (e.g., best-performing ad sets).
- 20% – New experiments (e.g., different audience segments, ad formats).
- 10% – High-risk tests (e.g., testing new creative strategies, A/B testing offers).
Example
A restaurant promoting online delivery services may allocate:
| Type of Ads | Budget Allocation (%) |
| Best-performing food menu ads | 70% |
| Testing different audience groups (e.g., office workers vs. students) | 20% |
| Experimenting with Instagram Reels ads | 10% |
3. Implement A/B Testing to Find the Best Performing Ads
A/B testing (split testing) involves running multiple versions of an ad to determine which performs best. This helps businesses avoid overspending on ineffective ads.
- Test different ad creatives (images vs. videos).
- Experiment with different ad copy (short vs. long descriptions).
- Try various audience segments (broad vs. lookalike audiences).
Example
An online electronics store tests two versions of an ad:
- Ad A: Static image with a product discount.
- Ad B: Video showcasing product features.
If Ad B generates a 30% lower CPC, more budget should be shifted towards it.
4. Retargeting with Facebook & Instagram Remarketing
Retargeting warms up potential customers who have interacted with your brand before but haven’t converted.
- Use Custom Audiences to target website visitors or abandoned cart users.
- Use Lookalike Audiences to find new users similar to existing customers.
- Retargeting campaigns usually have higher ROAS and lower CPC, making them a budget-friendly strategy.
Example
A travel agency running conversion ads for holiday packages should retarget users who viewed the package page but didn’t book, as they are more likely to convert than a cold audience.
5. Leverage Automated Bidding for Cost Efficiency
Facebook and Instagram offer bidding strategies that help businesses control costs:
- Lowest Cost (Auto-Bidding): Good for beginners, as Facebook finds the lowest CPC/CPM.
- Bid Cap: Allows businesses to set a maximum cost per click to control ad spend.
- Cost Cap: Ensures a specific ROAS target, making it suitable for conversion campaigns.
Example
A financial services company setting up lead generation ads may use a Cost Cap of RM5 per lead to ensure it doesn’t exceed its acquisition budget.
6. Allocate Budget Based on Audience Performance
Allocate more budget to high-performing audience segments (e.g., a 25-34 age group that converts well).
Reduce budget for low-performing audiences to minimise wasted ad spend.
Monitor ad fatigue and refresh content regularly.
Example
A beauty brand finds that women aged 25-34 in Kuala Lumpur have a higher conversion rate at a lower cost, so they shift 60% of their budget towards this segment.
7.Monitor and Adjust Budget Regularly
Optimising ad budget is an ongoing process. Use Facebook and Instagram Ads Manager to track:
- CPC (Cost Per Click) – If increasing, refine targeting or improve ad creatives.
- CTR (Click-Through Rate) – If low, test more engaging headlines and visuals.
- ROAS (Return on Ad Spend) – If below the target, shift the budget to high-performing ad sets.
Example
An online bookstore’s CPC increased from RM1.50 to RM3.00. To counter this, it adjusted its targeting and refreshed its ad creatives to improve performance.
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Boost Sales & Maximize ROI with Newnormz’s Expert Facebook & Instagram Ads
At Newnormz, we specialize in data-driven advertising strategies that help businesses optimize their ad spend while delivering real, measurable results.
| Service Features | Facebook Ads | Instagram Ads |
| Audience Targeting | Custom & Lookalike Audiences, AI-driven targeting | Interest-based & influencer-driven audience targeting |
| Ad Formats | Feed Ads, Carousel Ads, Video Ads, Messenger Ads | Story Ads, Reels Ads, Feed Ads, IG Shopping Ads |
| Performance Optimisation | A/B testing, real-time bid adjustments, cost control | High-engagement formats, real-time campaign tweaks |
| Remarketing & Retargeting | Re-engage website visitors, cart abandoners, & leads | Target past engagers, video viewers, & page visitors |
| Creative Development | High-performing ad copy, compelling visuals, and CTAs | Visually appealing, high-quality creative storytelling |
| Bidding Strategy | Manual & Auto Bidding, ROAS-focused strategies | Optimised bidding for lower CPC & higher conversions |
| Best For | E-commerce, lead generation, local businesses | Fashion, beauty, F&B, travel, & lifestyle brands |
We don’t just run ads – we optimize performance by ensuring every ringgit spent delivers measurable results. Our process includes:
- Data-Backed Decisions – Using analytics to guide strategy adjustments.
- Ad Cost Optimisation – Minimising CPC, CPM, and maximising ROAS.
- Performance Reports & Insights – Transparent reporting to track ad effectiveness.
- Continuous Campaign Monitoring – Real-time adjustments to improve outcomes.
Our team ensures Facebook ad and Instagram ad budgets are spent efficiently to drive higher engagement, conversions, and revenue.
Conclusion
Optimising Facebook and Instagram advertising costs in Malaysia requires a strategic approach that balances budget allocation, audience targeting, and performance tracking. By understanding key advertising metrics, businesses can make data-driven decisions that enhance engagement and improve return on ad spend (ROAS).
Factors such as industry competition, ad placement, bidding strategies, and seasonality significantly determine costs. Implementing remarketing campaigns, A/B testing, and automated bidding strategies can help businesses reduce expenses while maximising results.
Newnormz provides customized Facebook & Instagram advertising solutions to help businesses reduce ad costs and increase conversions. Whether you’re looking to drive brand awareness, generate leads, or boost sales, our data-driven strategies ensure every ringgit spent delivers measurable results.
Ready to optimize your social media ad performance? Contact Newnormz today for proposal & quotation and let us help you achieve cost-effective, high-impact advertising.
