5 Secrets that Experienced Startups Often Learn the Hard Way about Facebook Advertising

Nobody wants to learn the hard way.

You want to get customers and prospects. Facebook ads is a very affordable, targeted, powerful way to do that.

But you don’t want to waste your ad budget, right?

Here are 5 things I’ve learned that most start-ups don’t understand before they starting Facebook advertising… 5 things that can waste your money.

#1 Great Ad Performance Requires Testing. And Testing Costs Money

It takes money to test ads to find the profitable ads. You have to spend money to make money.

The simple fact of digital advertising is that there are a lot of ad settings and a ton of ways to write an ad. That’s true whether it’s AdWords or Facebook or whatever.

And only about 5% of the ad ideas you come up with will be profitable. That’s true even for advertising experts with a decade of experience. Research bears that out.

You must write 10-20 ads to find one outstanding ad. And outstanding ads are what we need to win this game.

Here are some of the decisions you have to make, and each variation costs money to test:

  • What image will you use? Positive or negative? People or objects? Problem or solution?
  • What will headline be? Calling out who they are? Asking a question? Making a bold statement?
  • What will the ad copy say? Gosh there are so many things we could say…
  • Who will you target and how? You can often target the same people with several different targeting options. We won’t know which targeting method is cheapest until we test it.

At the beginning of the testing process, we know the least. The more winning ads we find, the smarter our following tests are. But the first month is the worst. As we learn from those ad test results, profitability increases. But that learning process involves spending money on ads.

#2 Successful Companies INVEST in Their First Three Months with Facebook Ads

We’ve managed Facebook ads for dozens of clients- over $2 million spent on ads. They’ve spent anywhere from $33 a day to $1,000 a day; that’s from $1,000 a month to $30,000 a month.

That budget fuels testing and leads to profitability. We often find the first couple weeks is all learning. We start to see promising ads. By the end of month two, we should have some strong ads that reliably get leads or sales. By the end of month three, we’ve reached. Our goal is to cut the initial cost per lead or cost per sale by 50%.

How much does $1,000 spend in a month, for example, get you? Let’s do some math:

  • If you’re looking for leads, hopefully your opt-in page converts at 20%; if your cost per click is $0.50, then a lead is $2.50. If your lead gen page is not very effective and converts at 5%, that lead would cost $10. If the niche is competitive and the cost per click is more like $1.50, then that 5% conversion page makes your leads $30 each. That’s how the math works.We’ve seen lead gen costs as low as 12 cents and as high as $78. It depends on the niche, the competition, and how efficiently the lead gen page converts. That’s why we need to split-test landing pages and find out which one converts best.If you can split-test and take your conversion rate from 10% to 20%, you cut your lead gen cost in half. You double how many leads you can get from the same spend.At the same time, we’re testing ad creative and targeting to multiply that improvement.

    Doing a little math ahead of time helps you have more realistic expectations and be prepared to implement the strategies that work. Going in blind usually results in wasted money and unsatisfactory results.

  • If you’re doing e-commerce, the baseline is a site that converts at at least 1%. Sometimes a new site has problems and only converts at 0.5%. Amazing sites can do 2-4%, but that can take years of evolution to reach.If your cost per click is $0.50, a passable 1% converting ecommerce site has a cost per sale of $50.What is your profit margin? Is it more than that?Some products will kill your business, because their profit margin is too low for digital advertising.If your cost per click is $1 and you have a conversion problem and only get 0.5%, then each sale costs $200.

We’ve seen e-commerce cost per sales of $5 to $500. Again, it varies with the niche, competition, and your website’s conversion efficiency.

This is just the math of pay-per-click profitability.

#3 WHY Would People Want to Buy What You’re Selling? 

This is the most basic lesson of marketing.

And it’s critical to ask if no one ever has bought what you’re selling yet. Or if no one has ever bought it online.

If you have no marketing experience, 99% of the things you think are awesome about what you’re selling are likely features, not benefits:

  • Plush seats.
  • Moon roof.
  • 24-hour customer service.

Those are features.

The customer says, “Who cares? Why should I care? What’s in it for me?” So, yeah, really, you have to spell out what the benefit is to them.

  • Plush seats? “Experience luxury driving.” That’s a benefit. And, bonus: we get them to imagine having it, which makes them more likely to buy. But let’s be honest… plush seat luxury is only appealing to people who love 1984 IROC-Z Camaros. Look at this fine specimen:
  • Moon roof? Great for werewolves. Ability to look up when you should be looking at the road. Just kidding. “Your passenger can look out your moon roof and (s)he will be impressed. With YOU.” That’s a benefit that makes them visualize the experience of the solution. By the way, your 1985 Camaro is awesome. IROC you say? Yes, U really do ROC.
  • 24-hour customer service? “We’re there to help you fix it when everything goes wrong at 3:00AM. We’ll save the day, any time of day. If you have a huge everything-grinds-to-a-halt problem, you won’t have to wait. We’ll fix it now. Relax, you can rely on us.”  That’s a benefit that makes them visualize the experience of the solution.

Those are the benefits of your features. That’s the most BASIC level of copywriting you need to be able to do. They sell much more effectively than features.

Getting them to imagine experiencing the benefit will get you even bigger results. So do both.

#4 You need to know WHO would want to buy from you.

It’s easy to have the wrong idea of who your customers are, or a very vague idea. Some companies even achieve a level of success without an accurate picture of who their best customers are.

Digital marketing teaches you about them. Many of our clients find out their customers are only SORT OF who they thought. But there’s often something surprising…

  • “Oh, wow, people over 50 years old DO buy this. Interesting…”
  • “Our customers are mostly single? Weird!”
  • “Our customers like George Takei? Who the heck is is George Takei?”

That kind of stuff- which by the way, can dramatically lower your Facebook ad costs- can also be applied to all your other marketing. When you discover who they are, you may look at your email marketing or your print ads or radio or TV ads and realize you’ve pitched them to the wrong person. Changing that will improve your results. And since many types of offline marketing can’t be tracked- what worked or didn’t- this information from digital marketing is super valuable if you’re doing offline marketing.

And, by the way, there’s a ton of free market research inside the Facebook ad interface. Enough to put some market research companies out of business. It’s called Facebook Audience Insights.

#5 Your website has to be really efficient at converting your Facebook ad visitors.

You saw it in the math. If you can double your conversion rate, you cut your costs in half.

That sounds like a bonus. But if your conversion rate is sub-standard, your costs can be through the roof. So you might need to improve your website, or take the more modern approach of using squeeze page platforms that can split-test.

The most vulnerable people to mistakes here are web designers. Anyone who thinks they have a new way to design your website. A more aesthetic way. Lots of ideas about impressive designs.

If that gets in the way of usability, you’re done.

  • Sure, your web visitor may think it’s a beautiful website, but it’s so beautiful that they forget to buy.
  • Or can’t figure out how to buy because the navigation elements were too ugly for your web designer.

If you’re interviewing web designers, ask them what they do for split-testing and conversion optimization. The ones that trip over the answer? Move on  to another. The next evolution is using services like unbounce, clickfunnels, leadpages and optimizely.

If you want to run a profitable business, you need to strike a balance between form and function- between branding and conversion optimization.

That’s it- if you’ve grappled with these five issues, then relax- you can advertise on Facebook confidently, and look forward to great results!

If not, we can help with services or my online course, Social Marketing Profit System.


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Brian and The Brian Carter Group can provide you with strategy audits and recommendations, manage and maximize your Facebook ads and help you build out your marketing funnels and content, amongst a host of other services. Fill out the form to contact us for more info and a complimentary 15 minute phone call to discuss your situation and goals.
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