10 takeaways from running Facebook ads for 18 months

The net value of campaigns we have managed crossed $1,000,000 last quarter.

This is Facebook. So how do you target your relevant customers?

People who know me — friends and businesses alike — seem to be under the impression that I hate using ads to acquire customers. They are both wrong and right. I think ads are great, they are amazing — to acquire customers. I don’t hate running ads.

I hate the way ads are being run most of the times:

  1. You ask your average digital marketer and you will realise how expensive acquiring customers via Facebook is. Even when you optimise your targeting. As a matter of fact, you will find that the more you optimise your targeting, the more you would be spending on every customer/user acquired. (Which makes sense. If you are getting a filtered list of consumers who are more relevant to your business, you ought to be paying more for them.)
  2. Paid digital marketing is considered a standalone activity most of the time, and not hand-in-hand with organic social media growth and organic growth of other digital channels.
  3. Paid digital marketing is measured on its own, and not alongside organic channels. What I want to know is how much consumers are being acquired via each channel, and what is my roadmap to increase the % contribution of organic acquisitions as compared to paid acquisitions while maintaining the momentum on net number of consumers acquired.

One of my businesses acts as a “growth partner” for startups and businesses alike. What that essentially means is that we work as if we are a part of your team, getting aligned to your journey, your growth. We conceptualise your marketing strategy — free, paid, organic, inorganic, social, email, leads, everything — and then we execute it. And this story is about sharing some of the core realisations we have had while running this business. For the sake of posterity, today let’s just talk about Facebook. Let’s get to it.

Talk to 10 startup founders, and you would have heard a good number of complaints on how much they have spent on Facebook for next to no results. Makes one feel as if Facebook is fleecing businesses. Nothing could be further from the truth. After having conceptualised and executed countless Facebook campaigns, I can tell you that Facebook ads do work.

Facebook ads bring in amazing results — in terms of numbers as well as RoI

First of all, understand this — Facebook ads are just a type of content, so for all intents and purposes, it is content marketing. The same basic concepts of content marketing are applicable here as well. And just as it is with any form of marketing, having a sound and strong, robust strategy is fundamental in ensuring that you see amazing results.

Let’s begin?

As I said, Facebook ads are just another form of content, and as it is with any form of content marketing, you have got to be consistent as fuck!

Whether it is in the tone of your ads, the way you draft your ad copy, your ad design or your landing page. Be fucking consistent.

You have to understand that any and all forms of marketing follow a funnel approach. Something you said on step 1 excited a percentage of the audience, who waded through onto step 2, and so on. If your messaging, content, key takeaway, actionable etc. in step 2 don’t look aligned to what it was in step 1, you just lost some users. Worse, you confused some more. And worst of all, some of them left thinking of you as a spammer, fraudulent business — one that is using shady antics to try tricking them. No one likes getting tricked.

I loved working at Myntra. It was an amazing team, and led by exceptional people at the helm. Ashutosh Lawania, the co-founder, led the sales and marketing teams, and he had one simple rule when it came to banners:

If you are using a product image in the banner, then the landing page (product list page) needs to have that product in the first row itself — preferably in the first 3 products.

Why? His logic was simple. If a consumer is clicking on that ad, there is a high probability that the style appealed to him/her. He didn’t want them feeling disgruntled on not finding the product, or because finding the product required a lot of effort.

[If the product being showcased in the banner were to go out of stock, Ashu insisted the banner gets changed to a product that is available. Thanks Ashutosh Lawania; that was a valuable lesson. One I still carry.]

The friends you introduced me to today know more about me than you.

My girlfriend at the time said that to me one day. And she was right. Beyond the fact that I loved her thought process and spending time with her, I knew little about her past. In my defence, I am militantly private about my life, and so I tend not to pry into the lives of others as well. I would have loved to know as much about her as she allowed me to or shared with me, but I would not ask any questions myself — if any. And that’s a terrible way to have a relationship.

If only I had followed the approach I follow professionally in my personal life, she wouldn’t have felt let down. I make it a point of knowing the platform inside out, and you should too.

  1. Do you know what your right ad placement is supposed to be like?
  2. What exactly is a bid strategy? What are the different kinds of bid strategy you could be opting for? Which bid strategy should you use for your campaign, and on what basis should you be making that decision?
  3. How do you define your target audience? What are the questions you need to ask yourself before you start defining your target audience?
  4. What kind of optimisation methods should you be exploring for an effective ad campaign?
  5. What different kinds of targeting approaches are available to you?
  6. How are the different kinds of ad placement options available to you? How are these different ad placements aligned to different objectives your business may have?
  7. What is the difference between reach and efficient reach?

Did it get slightly overwhelming? It can be. People always talk about split testing their campaign ads, defining custom strategies and all that jazz, but I rarely see people getting the basics right.

These simple components have a massive impact on the delivery of your ads, and they affect your campaign costs as well as output as well. So, get to know the system guys.

If you are looking for some help on this front, I am in the process of compiling a short free book on the inside of Facebook advertising. Leave your email as a comment, and I will keep you updated on the progress of it — and share it with you once it is ready.

If you have read some of my previous stories and/or Quora answers, you would know that I always advise staying away from vanity metrics — for every aspect of your business. It is no different for Facebook ads.

Impressions, reach etc. means jackshit if your campaigns are not meeting up to the objectives you are running it with. So, keep an eye out on your RoI; constantly keep a track on how well your ads are converting. Don’t look at performance metrics in isolation, but measure them together to get a more holistic view of your campaign performance. And take insights from these numbers. For example, if your campaign has a bad click-through rate, you should consider changing the creative, the ad copy, or both. Similarly, if you are getting decent/good click-through rates, but your overall conversion rate sucks, then maybe you need to rethink the whole landing page and/or the ‘smooth connect/flow’ from the ad that’s active and the landing page it links to.

More than anything else, keep an eye out for the relevance score. Your ad’s relevance score is a number between 1 to 10 that gives you an indicative idea on how well your ad is resonating with your target audience. You want your relevance score to be as high as possible. If you want to dive deep into parameters like relevance score and what factors positively/negatively affect your relevance score, or what can you do to improve it — do let me know. These topics are covered in quite some detail in the book I mentioned earlier.

This is one of the most frequent mistakes I have seen marketers make when running Facebook ad campaigns. They will start with the “allocated budget” — the amount that they are looking to spend on a daily/weekly/monthly basis. That is one of the biggest mistakes you could make. It puts your ad at the risk of performing badly, getting lower relevance scores, lower frequencies, getting costlier. All in all, a complete and utter disaster.

Always start your ads with as low a budget as possible, and keep on optimising to get to a healthy CPA before you decide to pump up your ad spend.

Surprise: This can also potentially make your ads much cheaper as compared to the rates you would be paying via your normal strategy.

Why?

Facebook, as a platform, is looking to serve only that content that its users engage with. This helps users not hate the ads as much as they typically do on other platforms, and keeps the advertisers happy as well since they are seeing a healthy click-through rate.

Because of this, Facebook rewards ads that get more engagement, and it does so by making them less expensive over time. What that essentially means is that even though other advertisers are outbidding you, Facebook will still help you get cheaper conversions if your ads have been around for a while and they are witnessing good engagement.

Yep. Ads with healthy history of good engagement are made cheaper by Facebook.

So, start small, and focus on improving the “worthiness” of your ads. Starting with a small budget helps you save a bulk of your overall marketing budget for the time when you have reached the level of optimisation you were looking for. This also drives down the cost of experimentation and playing around at your end with different targeting parameters to reach the sweet spot.

Just because you have achieved a sweet spot with the conversion rates and CPA, it can be tempting enough to go all-in, in an effort to cash out as much as possible on the low CPA you have been able to achieve.

The only problem is — this approach will, in all probability, quash all the work you had put in so far.

As I explained earlier, Facebook puts a lot of emphasis on the engagement different content types get on its platform — and it does so for organic as well as paid content. Now, if you increase your budget drastically overnight, your ads will start getting served to a much wider audience base, and if the engagement on your ads starts coming down, that’s it for you: your CPA will start shooting up. You may even notice a sharp decline in your CTR numbers.

What would I suggest? Increase your daily budget slowly and gradually. Increase your budget, tweak around to maintain the conversion rates and CPA sweet spot. And then, rinse repeat the process.

Don’t be that guy.

There doesn’t exist a formula to calculate how much your Facebook ads should cost you.

My friends constantly ask me how much they would need to spend on Facebook ads for them to get their business to a certain point. Well, I honestly can’t say. It varies a lot. Depending on which segment you are operating in, what is your target audience, what is your bidding strategy, what kind of brand-tone does your business have, and most importantly — what kinds of effort are you putting in on different marketing channels.

Sidenote: This was actually one of the main reasons for starting 'growth partners'. It is easy for me to pick up any one marketing channel for your business and drive the results that could make you happy in the short-term. But, in order to facilitate real growth and long-term benefits, it is absolutely imperative that your different marketing channels work in tandem with each other, follow the same macro-strategy, and work towards that one goal - largely following the same guiding philosophies and principles.Our business does exactly that. By more or less taking over the entire marketing function of the businesses we work with, we ensure that we would do everything that needs to be done to facilitate "growth of the business"; achieving short-term goals or 'acquiring 50,000 users for your product' has never been the kind of targets we have ever set for ourselves. And it never will.

If I were to compare all the campaigns we have run in the past 18 months, I wouldn’t be surprised to find out that some of the best performing campaigns had a fairly poor start. Campaigns typically need a few days before they start delivering the results they are capable of, and it is from that point that the whole exercise of improving further on it starts.

When we start delivering your ad set, whether at the start of a campaign or after you edit it, we don’t have all the data necessary to deliver it as stably as possible. In order to get that data, we have to show ads to different types of people to learn who is most likely to get you optimization events. This process is called the “learning phase.”

— From official “Advertiser Help Center”

What that essentially means is that while Facebook’s algorithm collects as much data as possible to ensure a seamless delivery, your ad performance would fluctuate quite a bit. But once it has gotten stable, you should start seeing better conversion numbers, cheaper CPAs etc. (Given you are running the campaigns the right way.)

What it also means is that you should refrain from making a lot of changes to your ad/campaign while Facebook is learning more about it. (For obvious reasons, it would mess up with the ‘learning’ process of Facebook’s ad engine.)

Is there a benchmark for how many days would this learning process take?

Errrmmm, unfortunately no. It may take just a day, it may take a few. Facebook does have some helpful reference for you though. As per Facebook, you can consider the first 50 conversions to be a part of the learning phase.

Is this new? I have never heard of this learning phase!

Once again, Facebook says it has always been there; it is just that now they have started making their advertisers aware of its existence. It makes sense, doesn’t it? Of course the algorithm would need some time and data points if it has to optimise its ad delivery mechanism; and it can’t very well use data points from irrelevant ad samples now, can it? They have just given it a fancy name now, that’s it.

Advertising is expensive, it is a well established fact. You are competing with a large number of brands to reach out to the same small segment of consumers out there, so it is natural that the cost per conversion keeps on going higher and higher. Now there are a few points which I think you should remember here:

  • You can beat other advertisers with a low bid as well, if you have engagement. I can’t underscore enough the importance engagement has in helping you achieve good performance for your campaigns. Engagement from your organic content can also have some trickle down effect on the score Facebook assigns to your fresh paid content.
  • No matter how much you are willing to pay, there will always be someone who is willing to pay more. Outbidding is a “no winners” strategy. There will always be someone with much deeper coffers than you. Obviously when such a scenario comes, you will end up paying higher than usual on your CPAs, but that doesn’t mean you should actively look at participating in that game.
  • If you are on a budget, steer clear of high traffic events on the calendar. Irrespective of your geography, there always exist some dates on the calendar when businesses (specially retailers) are looking to drive up sales — Think Black Friday in US, Diwali in India, Christmas in most of the world. If you are concerned about your average cost on conversions, I would advise completely flaking out on such time-windows.
  • Track your ad performances, and be willing to fluctuate your bids. For obvious reasons, nothing beats getting the desired results for as low a cost as possible. So start bidding low, but do keep an eye out on the performance of the ads (use Delivery Insights). Make necessary adjustments — both up and down — as and when required.

I met the founder of a F&B startup recently. “What’s your target audience?” — “People in the age group of 18–35

Ouch. I hate that answer.

How can your target audience be this wide? More so at such an early stage of your business.

This is what my target audience used to look like in the first 3–6 months of my last venture (fashion rental business) — “Women between 18–22 years of age, living in shared accommodation, working in X Tech Park, living in a 3km radius, going out at least twice a week, preferably of a certain body type”. You think that’s narrowing it way too much? If you do, I am glad! That was what we were going for. A very very localised target audience, and having it this specific ensured that:

  • We did not end up with a large number of customer personas
  • Our customers were clustered in a small geographical area — both in terms of their residences as well as workplaces. Helped us keep the logistics cost low as well as better word-of-mouth effect.
  • Why preferably of a certain body type? Well, as shallow as it may seem, it helped us in keeping the number of items in our inventory low. It was a business decision, and I took the call to start small — with just enough inventory that helped us cater to a wider percentage of the audience.

Since we knew what we were going for, it also helped us keep the CAC low. The more specific you keep your target audience, the more focused you would be able to keep your creatives, your ad copy, your landing page — better click through, better conversion rates.

There are additional tools that help you target “Lookalike Audience”, retarget past visitors to your website, or exclude existing customers from your ad delivery. All of these matter. The pennies add up.

First of all, you can either optimise your campaigns yourself, or use any of the free/paid tools available. But you do need to continue optimising your campaigns.

Using a tool helps at some places, since those have pre-set rules that have been put in place based on data and feedback received from countless advertisers. But at the same time, since campaigns largely vary based on your line of business, target audience segregation etc. the existing definitions of a good or bad CPA/conversion rates etc. may not be applicable to you. So, use it on a case to case basis.

Run different variations of the same ad — changing one small thing here and there — and find the one your target audience is engaging with the most. And give time to these different versions to go through the “Learning Phase” before you pump in the rest of your budget into the best performing ad.

That’s it. Let me know if you need me to elaborate more on any specific part of the overall process.

If you want me to add you to the reciepeint list of the Facebook Ad Strategy mini-book, let me know.


Also. In case your brand is looking for a ‘growth partner’, give us a shout. We would be happy to talk more. Drop me a mail - mail@abyshake.com

That’s it for today. See you tomorrow!

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Helping businesses grow 10x faster, and scale efficiently. Top Writer — Quora, Medium. Drop in a line if you’d like help with yours. mail@abyshake.com