Why We Just Doubled our Facebook Ad Budget
Last week I wrote a post about ways to increase your organic reach on Facebook. As Facebook moves to monetize more and more of its platform, social media managers are faced with the grim choice of either paying up, or losing 1.2 billion potential customers (or at least that’s how Facebook frames it). Since we at Crowdbabble recently decided to increase our Facebook ads budget, I thought I would discuss why I think Facebook ads are one of the best investments you can make – as a business of any size. All screenshots and data come from Crowdbabble’s Facebook Insights.
1. Unprecedented Control of Viewers
Let’s say I’m starting a traditional marketing campaign. I segment my customers to social media managers between the ages of 25 and 34. Now I want to make a TV ad, so I have to decide who what shows social media managers of that age bracket watch. A good marketer will have a strong, data backed estimate of the best shows, but you can never be sure that you are hitting your target market exactly, and you’re likely paying for viewers that have no use for your product. Now let’s consider a Facebook ads campaign: I complete my segmentation, and then tell Facebook to only show the ad to social media managers between 25 and 34. This removes that second step, that estimation, that loss of control. You have full control over who sees your ad, and you only pay for useful impressions.
2. Ability to Track Goals
Let’s go back to that traditional marketing scenario. For fun, let’s assume the ad was during the SuperBowl. So, you just reached 167,000,000 people – seems fantastic! But how do you know that any of those 167,000,000 people became a customer? It is possible (unlikely, but possible) that none of them ever bought your product, your ROI is 0%, and you have no idea. With Facebook ads, you can set up conversion tracking, so that you know exactly how many users signed up, clicked through, or became customers. You can immediately evaluate the return from your campaigns, and shuffle money around to the most profitable ones. Pair this with your Google Analytics and you’ll understand every step of your funnel.
3. They’re Cheap
I’m sorry if you just ran an ad in the SuperBowl (feel free to debate me in the comments) but I’m going to take the example a step further. A 30 second spot costs about $4,500,000. With 167,000,000 viewers we’re looking at about $0.03/impression – seems like decent value right? Wrong. On Facebook we pay $5 to boost our post reach to 1000 people, or $0.005 per person. And since a boosted post stays on the news feed for a prolonged period of time, people see it more than once. We actually pay $0.001 per impression. This is the difference between reach and impressions (i.e. impressions count people seeing the post more than once). If you want people to see your SuperBowl Ad again you’d better have an extra $4,500,000.
4. They Work
Apart from the ability to focus down to your exact target market, Facebook also offers powerful tools like re-targeted ads. These allow you to run ads for people who have visited your site, but haven’t signed up. Our Facebook retargeted campaign has a 0.1% click through rate (CTC), significantly higher than the benchmark CTC of 0.06%. At the end of the day our Facebook ads acquisition cost per user is paid back within a week – that sounds like a pretty sound investment to me.