Social media marketing is one of the most important business tools in the 21st century. Social media platforms have only grown over the years since Facebook took the world by storm and it is clear that it is no dying trend.
Social media marketing – Facebook, Instagram, LinkedIn, YouTube – is one of the easiest ways to grow your business and with over 1.6 billion people worldwide connected to small businesses on Facebook, there has never been a simpler way to reach your target market. In this post, we’ll just focus on Facebook Ads but the same kind of principles apply to most of the other platforms.
How Do Facebook Ads Work?
Facebook Ads work on an auction system as there are only so many ad placements (e.g. Newsfeed, Stories, Marketplace) and countless companies that want to advertise their businesses. You bid against other companies in your target market for ad placements. This is great for budgeting as you can control your bidding cap – the maximum amount you are prepared to pay for someone to see your ad. If you are just starting out, you can set the bidding cap to a level you feel comfortable spending and then test to see what results you get.
Facebook also offers tools such as budget management and target cost features to help you control the amount you spend on advertising. With budget control split into two categories – Daily Budget (the amount of money you are willing to spend on your advertisement campaign on a day to day basis) and Lifetime Budget (the total amount of money you are willing to spend over the course of the entire campaign), sticking to your marketing budget is easy.
There are 3 parts to a Facebook Ad:
- Campaign – this is where you set your overall goals and budget. Do you want to reach a lot of people for brand awareness, do you want to send visitors to your website or Landing Page, do you want to get signups or orders? You can also set your budget here for the whole campaign. Decide how much you are prepared to spend to get new leads / business or how much your cash flow allows you to spend. That becomes your budget.
- Ad Sets – this is where you decide who you are trying to reach with your ads and where you want your ads to appear. You can target Facebook users by location, age, gender, interests, pages they like, TV shows and movies they watch etc. There are too many options to get into here and you need to do some research before you get to this stage. You also decide where you want your ads to appear – newsfeed, right column, stories, marketplace, apps etc – and the device you want the user to being using when they see your ad. You can also tweak your budget here too but that’s a bit more advanced.
- Ads – this is where you write your ad copy and decide what image or video you are going to use – this is called the Creative. You should apply good copywriting that appeals to your market and answers their questions, solves their problems and encourages them to take you up on your offer.
This is a very high level overview and each of these three parts have a lot of flexibility and can be customised to suit your needs.
Factors That Affect Your Facebook Advertising Costs
One of the most common questions we’re asked is “how much do I need to spend on Facebook Ads?”. That is always a tricky question to answer because it depends on so many variables. If you are just starting out, then you can start small and test how your ads perform before investing a bigger budget. You could start with a small budget like $20 / day or $200 / month. Of course, the results you will get will most likely be smaller than if you could commit a larger budget but that shouldn’t stop you from getting started.
Here’s an example of real results from a small budget campaign we ran recently:Webinar Promotion to cold audience
– Conversion Goal – upsell to online membership program $97/mth
– Campaign Duration – 3 weeks
– Objective Landing Page Views – with webinar registration sign-up
– Budget – $200, – Performance – 4.86% Click Through Rate, 42c Cost Per Click
– Results – 52 registrations with a cost per registration of $3.85
How far your budget will stretch is affected by factors like:
Target Audience – Creating smaller and niche target audiences can end up costing you more as there are fewer ad placements. So, bidding for placements may be higher. Of course, depending on your geography and target market, you may only want to reach a small, very targeted market and are prepared to pay a bit more for this.
Marketing Objectives – Facebook gives you multiple marketing objective options such as website traffic, video views, conversions and catalogue sales. The cost of your advertisement is impacted by your objective. Promoting your brand (reach objective) will be cheaper than trying to gain sales (conversions objective). Focusing on the right objective will be more effective and cost friendly.
Ad Placements – You can choose from a variety of ad placements with options for your ad to appear in news feeds, marketplace, stories and in the right-hand column. Each placement has a cost difference and some placements get better results than others so you need to measure results of each placement with the cost.
Your Relevance Metrics – Facebook has a system that tracks when users interact with your advertisements. There are currently three relevance metrics – Quality Ranking – how your ads compare to similar ads targeting the same audience; Engagement Rate Ranking – the anticipated engagement rate of your ad (likes, comments, shares, clicks); Conversion Rate Ranking – expected conversion rate compared to competing ads. The higher you score, the more the Facebook algorithm will favour your campaign and you can end up paying less for the same placements.
Keeping Your Ads Fresh – It doesn’t matter how influential an ad campaign is, eventually it will lose its impact and the engagement will slow down, which means your relevance metrics will be lower. You can keep your same audience and placements (Ad Sets) but change your offer, copy and image (Ads). This will keep your costs down and engagement up.
Facebook can be used as one of the greatest marketing tools for small businesses, social enterprises or large corporations. With over 3 Million businesses using Facebook Ads in 2019, the benefits of it are becoming increasingly obvious. 67% of Marketers found Facebook to be their most important social media channel.
To find out more about how you can elevate your business using social media marketing channels like Facebook, contact us at Amica Digital today or book a 30 minute call if you need assistance getting your Facebook Ads up and running now!