- Are Facebook ads still relevant and still worth using
or are there better, cheaper,
and more effective advertising solutions out there
that you should be using instead
in order to help you generate more leads
and get more customers and make more sales?
It's a good question and an important one too.
Unfortunately, most of the information out there
on the subject of Facebook ads and their relevance
is either all doom and gloom with headlines like,
"Facebook ads are dead" and "Facebook is failing,"
or they're all sunshine and rainbows,
talking about how Facebook is still
the biggest most powerful social network out there right now
and how you'd be crazy to ignore it.
So, who's right?
Well, my friend, unsurprisingly,
the answer is somewhere in the middle.
After all, the doomsayers completely ignore the fact
that there are still millions and millions of people
who are managing to run quite successful
and very profitable Facebook ad campaigns today.
But the sunshine and rainbows crowd
somehow doesn't seem to care
that Meta's stock price fell up to 45%,
and iOS 14 basically decimated tracking and pixels,
and that ad costs have consistently risen
year after year after year.
And that's why it's my goal here today
to set things straight and show you exactly what's going on,
how people are using Facebook ads right
and how they're using them wrong
and what you can and probably should do moving forward.
And it all starts by first understanding
the single most important element to advertising success,
the profitability formula.
This next part is going to sound painfully obvious,
but I want you to stick with me
because you'd be amazed at just how often
this part gets overlooked.
So here goes, in most cases,
you can judge an ad as successful based on whether or not
it returns a positive ROI or return on investment.
Also sometimes called a positive ROAS
or return on ad spend.
But the point is the same, and that is,
if you spend $1 on Facebook ads
are you able to make at least $1 back in return,
which would be your breakeven point?
Now ideally, you get to the point,
where you're putting in $1
and getting back 3 or 5 or even 10,
but all you need to achieve in the early days
is something I call the magic metric of $1 in, $1 out.
Because if you can do this, then you, my friend,
can technically run an unlimited amount of ads
and never run out of money
for as long as you're able to maintain those numbers.
But here's the kicker,
most people don't know how much they're spending per click,
how much each lead or sale is costing them,
and most important of all,
how much they're making back in return,
at least not in the long run.
The good news though,
is that answering all of these questions
is actually really simple, so here's how you do it.
The first number you wanna pay attention to is CAC,
which is your cost of customer acquisition.
If you're running say three different advertising campaigns
across three different platforms,
say Facebook, Instagram, and Google,
well, what you wanna do is track
how much you're spending per network
and then making sure that you're tracking
how many sales you're generating
from each of the ad campaigns that you're running,
and this is going to give you
your cost of acquisition per channel.
In other words,
if you spend $100 on Facebook and make 1 sale,
well, your cost of acquisition is $100.
Spend $100 on Google and make 2 sales,
well, your cost of acquisition is $50,
and spend $100 on Instagram, but make no sales,
well, you don't really have a cost of acquisition
'cause you're not makin' any sales.
The key thing to know here is
that these are incredibly important metrics to know,
not only in regards to tracking the performance
and results of the campaigns in each individual channel,
but also later when it comes to comparing and contrasting
the results you're getting on one channel versus another.
But more on that in just a minute.
The next number you need to know is your CLV,
or customer lifetime value,
which is the total amount of profit you generate
on average per customer over their lifetime.
Then once you have this number,
all you need to do is compare the two against each other
in order to figure out if you're coming out ahead,
you're breaking even, or you're losing everything.
For example,
if you spend $100 on Facebook ads and make a sale,
and a customer's worth $500 to you over their lifetime,
then you, my friend,
have a successful and profitable campaign.
But if you spend that same $100 to make a sale,
but the customer is only worth
$90 to your business over their lifetime,
then technically, every time you make a sale, you lose $10.
Not a good deal.
So do Facebook ads work?
Well, if you're able to run a campaign
that allows you to acquire a customer for less money
than that customer is worth to you
over their entire lifetime, then yes,
and if not, then no.
But I appreciate that's not all that helpful,
so let me break it down just a little bit more.
First, you need to understand that Facebook ads
or basically any other kind of advertising
is just one small piece of your entire marketing puzzle,
and it's up to the rest of your marketing funnel,
meaning your landing page or your sales page or your webinar
or your sales call or your email sequence or SMS follow up
to help you nurture them and convert them
and essentially maximize the lifetime value
that you're getting from the customer.
Putting all your efforts just on the Facebook ad itself
is one of the quickest ways
to run into a losing campaign scenario,
whereas by focusing on your entire marketing campaign,
again, looking at your funnel and your landing pages,
your sales pages, your follow up, and so on and so forth,
is one of the quickest and most effective ways
to literally transform your entire campaign overnight.
Next though,
in order to help us answer the question
of whether Facebook ads are still relevant
and still worth it,
well, we need to compare and contrast them
against the other advertising options out there,
so let's do that now.
When it comes to running online advertising campaigns,
you've got a pretty much endless supply of options out there
and the ability to reach basically anybody
in the entire world
provided they have an internet connection.
The big players though,
aside from the obvious one of Facebook,
are also Instagram, Google, YouTube,
and a rising player in the space, TikTok ads,
though there are many many others,
such as LinkedIn, Twitter, Amazon, Reddit, Pinterest,
Snapchat, Bing, and the list goes on and on.
Whatever the case though,
they typically fall into one of two different categories,
search and discovery.
Search based ads are exactly that,
ads that appear on search results
after someone types in a question or a query.
Google is the major player here,
though Bing and other search engines also play a small role,
and YouTube is kind of a special case here
as it straddles the line between search and discovery.
Discovery platforms then are anything that someone uses
while not directly searching for something,
which would be most social media channels.
In other words,
nobody shows up to Facebook or logs into Instagram
with a credit card in hand looking to buy something,
but they will buy something,
if they see an ad that's interesting
or relevant and desirable.
So one of the biggest questions that you need to ask
when it comes to deciding on a search or discovery platform
is whether your business would benefit more
from search or from discovery, or to put it another way,
do you have a product or a service
that people are actively searching for,
in which case you'd obviously wanna favor
a search-based platform like Google or YouTube,
or do you have something that you know people would want,
if only they knew about it?
In which case,
a discovery platform is going to deliver better results
be it Facebook or Instagram or TikTok.
Now, when it comes to choosing
which platform is best for you,
it's going to depend largely
on the target market that you're seeking to serve.
In other words,
are you serving a crowd that say 30, 35 and up,
in which case Facebook is still the dominant player
in the advertising space,
or are you trying to reach a slightly younger demographic
of say 30, 25, and younger,
in which case TikTok is still a very good option,
or do you find yourself somewhere in the middle,
say 20, 30, or 40 year olds,
in which case, Instagram is a very good option,
and it appeals more to brands and businesses
that have sort of a visually appealing aesthetic.
And as for ease of use,
well, Facebook ads are still probably
one of the easiest ad platforms of all of them
in order to get started and get an ad up and running
in the shortest time possible.
So if you do decide that Facebook ads
are the best fit for your business,
then I wanna give you everything that you need to succeed.
So next, let me give you a few of my best tips
on how to optimize your campaign,
starting with optimizing your business.
Optimizing the business side of your Facebook ads
means taking a look at your overall business model
and finding ways to increase the price
and profitability of your offer
and looking for ways to add value.
For example,
let's use some crazy big numbers here
because they help to make this all more clear,
if you're trying to sell something with Facebook ads
for say, $1 million, that only costs you $100,000 to make,
well, you've got a lot of margin there
to try to make that sale.
In other words,
you could spend $100,000 on ads,
get only one single person to buy,
and you'd still make $900,000 in profit.
On the other hand,
if you're selling something less expensive,
for like $10, $20, or $30,
you have to hustle and grind
and try to squeeze out
every single percentage point possible
to increase your conversion rate.
After all, let's say you're paying $1 to get a click,
so you have a CPC, or cost per click, of $1,
and then you have a conversion rate on your sales page
of say 3%.
This means, if you spend $100 on Facebook ads,
you'll get 100 clicks over to your sales page
and 3% of them will convert,
so in other words, you'll make 3 sales,
which means if you're selling something for $10,
you'll lose money.
Selling something for $20,
you'll still lose money, even selling something for $30,
and you'll still lose a few dollars with every sale.
Yay, advertising.
This is why you need to be optimizing your business first
in order to make sure that that it actually makes sense
to be spending any money at all on advertising.
And this is also why
I pretty much never advise running ads
for low ticket or low price products or services.
That is, unless you're committed
to becoming a master marketer
and trying to squeeze out
every single conversion percentage point
at every stage of the funnel.
Don't get me wrong, it can be done, and it is a lotta fun,
but it's also a lotta work.
Whatever the case though,
next you need to optimize the marketing side of your ads.
The key here when it comes
to optimizing the marketing side of your ads
is to get crystal clear on your ICA,
or ideal customer avatar,
and making absolutely sure that you're targeting them
and using language and ad copy that appeals directly to them
and to their pains and problems and frustrations
and positions your product or service
as the logical solution to all of those problems.
With Facebook ads,
start with demographic targeting, like age and gender,
then move on to interest targeting
and start typing in interests that you know they're into.
As for audience size,
there really is no one size fits all,
but if you go too broad,
your ad is likely to be shown to a number of people
who are irrelevant and uninterested.
Then again, go too narrow,
and you end up severely limiting your audience size
as well as paying for targeting options
that may not even matter.
So a very rough rule here is aiming for an audience size
between say 500,000 to 1 to 2 million for people in the US,
if you're targeting national or international.
But this doesn't override whatever you need to do
to target the right people,
so it could be bigger or even smaller,
especially if you're targeting local geographic areas.
Next, you really wanna make sure
that you're using the right campaign objective.
My personal favorite right now
is using leads as the campaign objective
and using an instant form
in order to collect name and email address
and maybe even phone number,
and then using a software called HighLevel
in order to follow up and to nurture those leads
and convert them into a sale.
Now this video is not sponsored,
but you can check out highlevelguide.com
or check out the link I've put in the description box below,
which is gonna get you access to an extended free trial
as well as to a free training,
that's gonna walk you through
exactly how to use this software with your marketing.
And last note on the marketing side of things
before we dive into the metrics,
is that you wanna make sure
that you're regularly reviewing
and updating your ad creative.
This means new ads, new images, new videos,
new angles, new hooks, new offers, new everything.
Not only will this help you avoid ad fatigue,
which is what happens
when someone sees the same ad too many times
and causes them to basically completely ignore it,
but it will also allow you
to find winning combinations a whole lot faster
then if you just sort of set it and forget it
and hope that things work out.
Okay next, let's talk metrics.
Now that you've optimized your business model,
and you're sure that
advertising your business at all makes sense,
as in, you're not gonna be spending $100
in order to make a $10 sale or any of that nonsense.
Next, you need to get crystal clear
on what I call your red light, yellow light,
and green light metrics.
Your red light is when your advertising campaign
falls below breakeven, and you start losing money.
This is obviously bad,
so you need to pause your ads
to figure out what's goin' on.
Yes, there is an adjustment period,
and yes, Facebook does have a learning phase,
but you don't wanna bleed your bank account dry,
so if things are lookin' ugly after a couple days,
well, don't be afraid to shut the whole thing down,
grab your bag of cash and get out of there,
so you can try again later.
The yellow light is when things
are at breakeven or just above,
so you might be spending $100
and making back $101 or 105 or 110.
Now, it's important here to not get overly excited
and just crank up your budget,
'cause that'll simultaneously crank up your ad costs,
and you'll watch that beautiful yellow light turn red.
Yellow lights are an opportunity
to improve upon, not scale up,
so don't turn them off, but don't ignore them either.
And then, green light ads are all of your ads
that are delivering a 3X or more ROI.
These are the ads where you're spending $100
and making back $300 or more.
Scale these up, study them, learn from them,
and try to make more that are just like them.
And if you want even more
of my absolute best Facebook advertising
tips, tricks, and strategies,
then you're definitely gonna wanna check out
this video right here,
which is gonna give you some of the secrets
behind my best performing campaigns,
so you can use them too.
So make sure to check that out now,
and I'll see ya in there in just a second.