12 Things I Learned By Spending Over £1M On Facebook Advertising
*2020 Update: The second part of this story can be found here.*
Last year I started paid advertising on Facebook for my clients, with no clue of how Facebook advertising works. So I had to start completely from scratch. I learned about bidding strategies, how the algorithm works, and how to use automation to manage and optimize large-scale campaigns. By mid-2018 I have run 300+ campaigns and spent a total of over £1 million on Facebook ads.
If there was one thing that I could definitely tell you, it is that, contrary to popular belief, Facebook advertising does work and has the potential to bring in great ROI when done well. There were quite a few things I learned along the way, including that having a solid social media marketing strategy in place is fundamental to seeing your advertising efforts pay off.
If you want to find out more about what I’ve learned on my far-reaching advertising journey, and also what foolproof strategies you can apply to scale your own campaigns successfully, keep reading!
1. There is no universal answer to how much Facebook ads are going to cost you. If you’ve been working in social media marketing for a while, you might have come across clients who wanted to know how much Facebook ads were going to cost them before they’ve even launched their first campaign. The truth is, there is no one-size-fits-all answer to this. Every business is different and your advertising costs will be greatly influenced by the dynamic market conditions, how easily you can reach your target audience and most importantly, your bidding strategy.
2. Understanding how Facebook’s algorithm works is crucial. Before you get carried away with split testing, custom audiences and other advanced strategies, it is really important to know how Facebook’s algorithm optimizes your ads for delivery and the different factors that influence your costs and results, such as bid strategy, ad placement, target audience or optimisation method. Luckily, Facebook has made all this information available online here, and there’s virtually no question that is yet to be answered.
3. Patience is key. One of the most important things I learned in the past year is that sometimes it pays to be patient. More often than not, you will not be able to see outstanding results overnight, and your campaigns might need a few days to become profitable. The more data Facebook’s algorithm can gather about your ads, the more seamless the delivery will be, so it makes sense that campaigns tend to get cheaper and convert better once they’ve been running for a while. In fact, this year Facebook introduced the Learning Phase, which indicates that an ad needs 50 conversions to be fully optimized for delivery. Even when you’re running split tests, let the ads run for a few days to gather sufficient data before making a decision.
4. Don’t focus on vanity metrics. Your Impressions, Reach and even Click-through rate don’t mean anything if your campaigns can’t bring you the results they’re optimized for. You can only measure your social media ROI by looking at how well your ads are converting. Keep an eye on frequency, relevance score and CPA. Look at the click-through rate and conversion rate together — if many people click on your ads but not enough are converting, it might be time to refresh your creative.
5. Auto-optimisation is your friend. If you have very specific advertising objectives, you could benefit from setting up your own auto-optimisation rules to ensure that those goals are met. Whether you use Facebook’s Ads Manager or an external platform like AdEspresso, their algorithms have been designed to optimise your campaigns based on a specific set of rules that apply well to most advertisers. What they might consider a reasonably cheap conversion might be an expensive one for you, so it’s better to go in and create your own set of rules to ensure your campaigns are running as smoothly as possible.
6. If you are managing a large number of campaigns, you will need an external tool. This will not only make your life easier by saving you a lot of time and effort, but most tools and platforms give you access to detailed metrics and analytics that you won’t find in Facebook’s Ads Manager. The tool I have been using in the past twelve months to manage a monthly budget of nearly £100,000 is AdEspresso. Split testing in here is a breeze, as you can literally set up hundreds of ad variations within minutes and their custom optimization feature makes it easy to set up your own rules to meet your advertising objectives.
7. Your ads’ performance is directly influenced by your bid. Whenever you run an ad on Facebook, you are competing with many different advertisers trying to reach the same audience as you. With the average cost per conversion across all industries coming at £14.35, it is likely that most advertisers are willing to bid exceedingly high to reach those users. This doesn’t mean you can’t win auctions with a relatively low bid, especially if your campaigns are performing very well, but underbidding will limit your reach and once you’ve won all the cheaper auctions, your ad performance will stagnate. Be prepared to raise your bid as the auction competition increases (you can monitor this in Delivery Insights in Ads Manager), and note that there are peak times during the year (Christmas, Black Friday) when advertising will be more expensive for everyone.
8. Choose your target audience wisely. The more specific your target audience, the more likely you are to have higher click-through and conversion rates. Don’t limit yourself to Detailed targeting, you can use Lookalike Audiences to target people very similar to your customers, or create Custom Audiences to retarget users who have already visited your website or convert newsletter subscribers into customers. You can also use a Custom Audience to exclude your existing customers from your targeting, if your goal is to reach new customers.
9. Maintain consistency. It goes without saying that your ad’s design, copy and landing page should always be consistent. If someone clicks through, something in your ad’s creative has caught their eye, and the landing page should underline the same message from your ad. An inconsistent landing page could make them loose interest or doubt that your message is genuine, and close the webpage within seconds — that is a negative sign of spam content. Facebook has recently announced that it’s tweaking its’ News Feed algorithm to show less spam and clickbait, so maintaining brand consistency on social media is more important than ever.
10. Be prepared to test and optimize frequently. One of the greatest features of AdEspresso is setting up multiple ad variations and testing different elements until you find the ads that convert best. This is incredibly important, especially if you’re investing the majority of your advertising budget into Facebook, otherwise you will never know what works for your audience. Once you have identified the best performing ads, be prepared to actively optimize — Facebook ads have a very short lifespan, and very soon you would have to look at changing your target audience or testing new creatives. Ideally, you should spend 20% of your advertising budget on discovery, and 80% on existing campaigns that are delivering a great ROI.
11. The longer your ads have been running, the cheaper they will become. While this won’t make them immune to ad frequency (all Facebook ads are susceptible to frequency), the longer your ad has been around and the more engagement it gets, the less expensive Facebook will make it over time. This means that an ad with a healthy click-through rate and low daily budget will win you more cheaper conversions, even if you’re being outbid by other advertisers in the auction. So start your ads with a small budget and only amp up your spend when you have achieved your target CPA.
12. Be wary of increasing your budget too quickly. When you see that a campaign is performing particularly well, it can be tempting to increase the budget to get as many low-priced results as possible. I have literally seen advertisers double or triple their campaign budgets, only to be staggered by the results a few days later. What happens when you increase the daily budget by a significant amount is that your CPA will go up, because Facebook will have to go after more expensive conversions to spend your budget, and your CTR will decrease if your bid is limiting Facebook from showing your ads to new people. To maintain a consistent CPA, you should only increase your budget by 10% — 20% at a time.
Originally published at www.happyninetofive.com on August 17, 2018.
