For over a year now, the most profitable and fastest growing traffic source our clients have been using to drive leads and sales has been Facebook advertising.
And if Facebook’s ad revenue growth is anything to go by, we’re not the only ones who are spending more on Facebook ads. A recent Wall Street Journal article reported:
The social network said advertising revenue jumped 57% in the first quarter [of 2016] to $5.2 billion from $3.3 billion.
That’s exponential growth. And one can assume that the majority of advertisers are spending more because they’re making more.
But how do you decide if Facebook ads are for you? And how do you maximise your results of existing campaigns? Read on to find out the….
Common myths and misconceptions about Facebook ad campaigns
If you don’t need to be convinced that Facebook advertising campaigns have the potential to be a worthwhile part of your digital strategy, feel free to skip this section.
But for everyone else, here are some of the common objections I hear when I mention Facebook advertising to clients (and my responses):
- “I hate Facebook. I never use it.” Ah, yes… but “you are not your customer”. Jan 2016 data from Social Media News estimates there are over 15 million Facebook users in Australia. Chances are, your customers are on Facebook, even if you don’t think of them as being typical social media users.
- “My customers are all over 60 – they don’t use Facebook”. Yes, they do. Retirees are one of the fastest growing segments on Facebook. Again, out of 15 million users, there are likely to be more than a few that match your potential customer.
- “Facebook isn’t a match for our product/service”. Now this might actually be true. If you sell nuclear power stations to governments, FB ads may not be the first place I’d suggest going for traffic. However, Facebook ads can be very effective as a piece of the puzzle in reaching B2B buyers. In fact it’s very effective if your target is a small business owner. And B2C marketing usually works very well – even for big ticket items like home renovations or home loans etc.
- “We already have someone taking care of our social media”. OK, but by “social media”, are you referring to community management such as social updates… or advertising? Facebook’s organic reach hovers at around 6% right now, meaning… if you don’t advertise, your messages are not going to get seen.
- “We tested Facebook ads a while back and didn’t find them effective.” I tested Facebook advertising for the first time in 2010 and I didn’t find it effective either. But things have moved on… reviewing exactly what you did before, what’s new, and what alternative approaches might work can unlock hidden opportunities.
Still Not Convinced? Check Out These Facebook Ad Campaign Case Studies
Here’s a couple of examples of clients killing it on Facebook right now.
The first is a financial services company generating 100+ consultation leads per month from Facebook ads for just $44.27 each.
This is an industry where anything under $200 cost per lead is considered sustainable and profitable.
So this advertiser is getting a heap of leads at about one quarter the cost of industry norms – nice!
Now here’s another example. This time from the home repair/renovation industry, where one might expect search (i.e. AdWords) to be much more effective than Facebook.
AdWords generated 26 Quote Requests in a 30 day period for $55 each:
Whereas Facebook generated an additional 25 Quote Requests for $79.67 each:
So it’s actually true that in this case, AdWords was indeed more effective on a Cost Per Lead basis. But we also need to consider the impact on overall profit.
In this case, each lead is worth around $260 in profit.
So while AdWords is cheaper, Facebook ads do deliver significant incremental profit, and are well worth including in the mix.
Now that you can appreciate the potential of Facebook adverts, let’s look at how to make your campaigns successful, as well as a few traps and pitfalls to avoid…
Top 10 Facebook Audience Targeting Methods
Facebook’s undeniable strength is the ability to target prospects in new, relevant and valuable ways.
Traditional direct mail marketers used to say that the success of any promotion is due ⅓ to the copy, ⅓ to the offer and ⅓ to the “list”.
In the case of Facebook ads, the “list” equates to your audience targeting.
Below are some of the most profitable targeting options, and when to deploy each one.
NOTE: There is “something for everyone” here. Please don’t fall into the trap of discounting Facebook ads because some of the targeting methods don’t apply to you! The key to an effective Facebook advertising strategy is selecting and customising the right methods to fit your situation.
Targeting Method 1: “Boost” Posts To Your Existing Fans
First up, you can “boost” posts to fans of your existing business page(s). (If you don’t have any existing fans, don’t worry… the methods below will take care of that).
If you DON’T do this, then any updates you post to your fan page will only reach around 6% of your fan base.
So let’s say you have 1,000 fans on your company page. Only 60 of those fans will ever see your average update unless you “boost”.
Boosting is a low-cost way to ensure people who already “like” you are exposed to repeated marketing messages and new offers.
Targeting Method 2: “Friends of Fans”
While we’re talking about targeting your existing fans… what if you could also target all of their friends as well?
You can. And human nature dictates that “people tend to know people who are like them”.
So the odds are usually good that if you’re getting good conversion results from your “fans”, a useful extension strategy will be to target “friends of fans”.
Targeting Method 3: Custom Audience – Website Visitors
Next, you can create a custom audience from your website visitors – also called Facebook remarketing.
A simple example of this is where a user visits your website and doesn’t convert to an email subscriber, but when they log into Facebook, they see ads that promote your lead magnet offer.
A more sophisticated example is where you sync up your custom audiences with user behaviour to ensure you’re always showing prospects the next offer in your funnel.
So for website visitors who don’t convert to your Lead Magnet… you show ads reminding them of that offer and asking them to opt in.
If they’ve already opted into your Lead Magnet but haven’t yet signed up to your webinar, then that’s the next offer you show them.
And if they’ve done all of the above, but haven’t yet requested a consultation or other Bottom of the Funnel Offer, your ads would focus on that offer.
This is a strategy that we call progressive retargeting, and it is very effective at shortening your sales cycle, by pushing prospects down your funnel faster.
Targeting Method 4: Custom Audience – Email Lists
Another effective and broadly applicable targeting method is to serve ads to your email subscribers on Facebook using custom audiences. (You can also do this with phone numbers).
So for example, if you have a big email list, or a database of customer phone numbers – you can upload them to Facebook as a CSV file and create an audience to whom you can show targeted ads.
Facebook will match your emails with the emails of registered Facebook account owners – and boom! A highly targeted audience is born.
Targeting Method 5: Interest Targeted Campaigns
“Interest Targeted” campaigns allow you define your ideal audience by their interests, hobbies and Pages they like on Facebook. These may be drawn from their listed interests, activities, education, job titles or groups to which they belong.
Let’s say I wanted to target higher-income individuals for a financial product.
I could go to Facebook and say, “tell me everyone who likes Rolex, Louis Vuitton, Gulf Stream jets and Dolce and Gabbana”.
Then I could serve ads about my financial product to this audience, who, on average, I can assume have a higher than average income (or maybe just like bling!)
A lot of your initial research into a possible interest will be guesswork – but combined with conversion tracking, that guesswork can quickly be refined and expanded once you see which interest targeted audiences work for you.
Targeting Methods 6,7,8,9: Demographics, Locations, Hometown, Languages (and more!)
Want to target French-speaking women aged 30-40 who live in Canadian provinces other than Quebec? No problem. Facebook lets you do that.
While demographics alone are not always super-predictive, they do give you another “lens” to overlay other targeting methods.
For example, we’ve marketed a number of financial products to Australian expats living outside Australia.
A good starting point has been to identify audiences of people who live in, say, the USA, but who list Australian locations as their hometown.
Then we overlay demographics and psychographics to arrive at a very targeted and very responsive audience.
The targeting combinations are limited only by your imagination.
Targeting Method 10: Lookalike Audiences
Lookalike audiences are a super-powerful audience expansion method.
Lookalike audiences are an algorithmic targeting method whereby you supply Facebook with a “known” audience (e.g your email list), and Facebook goes out and finds other users who are similar to the known audience. The following graphics from Facebook explain how it works:
Lookalike audiences are a great way to expand profitable campaigns to new audiences who have a high propensity to respond.
We’ve seen mixed results with lookalike audiences across our client base. Sometimes this works like gangbusters… other times it fizzles. You just have to test in your situation to see if this works for you.
4 Common Facebook Advertising Challenges
I’ll say it again: the huge strength of Facebook is the ability to target very precisely.
But Facebook advertising isn’t without its idiosyncrasies and challenges.
Here are four of the key ones:
Challenge #1: Great Facebook ads take more thought and strategy to create.
Whereas, say, Google AdWords ads can be pumped out relatively quickly and easily, Facebook ads need more copy and require images. Testing shows that plain or “stocky” looking images don’t perform nearly as well as custom-designed images. So designing images that really perform can take some brains and elbow-grease. If you need inspiration for top-performing ads, here are 35 Killer Facebook Ad Examples To Swipe and Deploy.
Challenge #2: Facebook ads “fatigue” faster.
When new audiences see new ads, they typically respond most strongly. But after a while, if you show the same ads to the same audiences, your click through and response rates plummet.
So you need to be constantly re-inventing new ads and new audiences to keep your click through rate high. This means you need to monitor and manage your Facebook account more closely than most PPC platforms.
Challenge #3: Facebook becomes an ever-growing beast that needs to be fed.
Typically, when you start out advertising on Facebook, your initial focus is on getting a Return On Investment.
But once you’re making $5 for every $1 you’re spending, the focus naturally shifts to scaling what’s working.
At first, scaling is easy – just add lookalike audiences, for example.
But once you’ve picked all the obvious low-hanging fruit, you need to get increasingly more inventive in order to find new-and-untapped audiences.
So yes, it’s challenging. But if you geek out on this stuff as we do, that’s part of the fun.
Challenge #4: You MUST have a funnel for best results.
The simplest funnel you can imagine is “Click on the ad > visit website > call or enquire”. And while this type of ultra-simple conversion process can work, it is very rarely if ever optimal.
A much more profitable approach is to focus on email list building, lower-commitment offers and nurturing first, before going for the big sale. In other words – a sales funnel.
We recommend you sharpen your Unique Value Proposition and hone your sales funnel before dropping big bucks on Facebook ads.
Next Steps and Actions
Facebook gives you a wonderful canvas on which to paint your masterpiece of lead and sales generation… but you do have to do the painting.
How you combine your conversion and funnel strategy with targeting methods, ad creative and analytics will determine your success and ROI.
Ideally, you want a few different “brains” involved – strategic people to look at the over-arching conversion process, copywriters to address the copy needs, conversion-oriented designers to nail the visual communication and ad design side – plus analytics geeks to squeeze out waste from your campaigns.
The above tips and examples will give you some next steps if you want to “DIY”. Or you can contact us for a free Facebook Advertising Opportunity Assessment.
This takes the form of a phone-based consultation and written report outlining either a) concrete ideas for improving the ROI of your existing Facebook campaigns or b) recommended targeting and high-level strategy for proposed new campaigns.
Then if you want help executing our recommendations, we can talk about how that would work.
But whether or not you decide to proceed with any further work together, at the very least, this Opportunity Assessment will give you concrete advice from experts who have managed hundreds of successful campaigns and have seen what works and what doesn’t.