1. Not Having Clear Strategic Facebook Advertising Objectives
There are many different things you can accomplish with Facebook ads: driving engagement, increasing followers, getting people to watch your video, driving traffic and dozens more. All of them are objectively “good” - who wouldn’t want more followers? That, however, is only part of the equation. Facebook advertising isn’t free. Every ad costs you money. Only by having clear high level objectives, can you determine if you are spending your money effectively.
Most businesses set their ultimate objectives as sales or lead generation.
With a clear strategic objective, you can determine how to spend your Facebook budget effectively. For example, how much should you spend getting people to watch your video? It depends on how many people who watch the video, buy your product. How much should you invest in getting people to join your Facebook group? It depends on how many members turn into sales leads.
2. Not Measuring Properly
The great thing about Facebook advertising - if you do it right - is that you rarely need to guess. You can get the answers you need from the data. The second biggest mistake Facebook advertisers make is not planning ahead to make sure they are gathering the data they will need later. If you’re not sure what data you will need, hire an expert. If you don’t know how to implement the pixels and coding you will need, hire an expert.
Accurate data is the foundation of all successful Facebook campaigns. Make sure your foundation is strong. If you’ve never built a strong foundation, work with someone who has.
3. Not Tying Your Facebook Objectives into your Overall Business Objectives
The third most common mistake is not tying your Facebook objectives into your business objectives. The easiest way to demonstrate is with an example.
Assume, you’ve avoided the first two Facebook advertising mistakes, you now have clear objectives and are measuring properly. (You know you want leads - or sales - and can measure which Facebook activities generate leads and purchases.) Because Facebook advertising isn’t free, you still need to answer the question, “How much should I be spending on Facebook advertising?”
The answer depends on your business, and how much value Facebook activities generate for your business.
If you sell Business to Business software, most companies will not buy without first talking to a salesperson. There is a lot of value in generating leads for your sales team.
If you sell supplements - and they are top quality - a large percentage of your new customers will purchase more supplements when their first purchase runs out in a month. (New customers have a high Life Time Value.)
If you sell cars, the car will last for a long time. So it doesn’t make sense to worry about Life Time Value, you want to maximize your profits this day, this week, this month and this year.
If you have an ecommerce store with many products, each selling at a different price - it is hard to predict how much money you are going to make on each order, but you still want to maximize the profitability of your Facebook advertising.
Fortunately, Facebook makes it easy to tie your business objective directly to your Facebook advertising objectives. (Assume all of the above examples have a 50% margin. I.e. For every dollar in revenue, you make 50 cents profit.)
CPL (Cost Per Lead) is the most effective high level Facebook objective to use when customers need to talk to a sales person before purchasing. (If you calculate, how much profit comes from each sale, and what percentage of leads close, you can easily calculate the maximum amount you can spend to profitably generate leads.)
CPA (Cost Per Acquisition) is the best high level Facebook objective to use for companies with a high Life Time Value. For example, if you know each new customer has a Life Time Value of $1,000, you know you make $500 profit on each new customer. Every Facebook activity with a CPA under $500 is profitable.) Knowing - and measuring - your CPA allows you to reliably make intelligent Facebook advertising decisions. For example, should you use a video or a photograph in your ads? The answer is the method with the lowest CPA.
ROAS (Return On Advertising Sales) is the most effective high level Facebook objective to use for new car dealers and ecommerce store owners. (Cost Per Acquisition does NOT work, because a car dealer makes more profit from selling a $100,000 luxury SUV than a $18,000 economy car. An ecommerce retailer makes more profit from someone who buys a dress, shoes and purse, than someone who just buys a necklace.) ecommerce retailers with a 50% margin, break even with an ROAS of two. Which demographics should they target on Facebook? The answer is every demographic with a ROAS of greater than two. (It doesn’t matter if you are spending $4 to generate a $10 sale, or $4,000 to generate a $10,000 sale. Both are profitable. You want both new customers. And you can be confident that your Facebook efforts are profitable as long as your ROAS is over 2.)
4. Not Letting The Algorithm Work For You
Facebook advertising is so powerful, because it employs an algorithm that learns which people respond best to your ads. If you set clear objectives - like attract as many new customers as possible with a ROAS over 2 - Facebook will learn which types of people make large purchases from your site, and find more of them.
If a Facebook ad is meeting your objectives - for example achieving a 2.5 ROAS - it is a mistake to tweak the ad hoping for the 2.6 ROAS. Your small tweak disrupts the algorithm, and forces it to start learning all over again.
Let your winners run. While you are enjoying the profits you are earning, make sure you avoid mistake number five.
5. Relying on The Algorithm Too Much
If you avoid the first four mistakes, Facebook advertising can seem too good to be true. You are profitability acquiring new customers. And you don’t need to make a lot of changes to keep new customers profitability rolling in. It’s not good to to be true. (Left Brain Right Brain Digital creates profitable Facebook campaigns for all our clients.) But it is too good to last.
Eventually, the algorithm will run out of similar people to show your ads to, and your profitable campaigns will start losing money.
The key to mastering Facebook advertising is understanding what data the algorithm is using to achieve your business objectives, and what additional data it needs to help you achieve more of your business objectives.
The concept can be a little confusing. Especially if you are new to Facebook advertising. Especially if you don’t have a lot of experience analyzing Facebook data. (Facebook gives you so much data, it’s easy to be overwhelmed.)
An example can help clarify. Assume you are selling yoga pants with an objective of a ROAS of over 2. And you are achieving 50 sales a day with a ROAS of 3. Fantastic, but it won’t last forever. You need to dig into the data and understand what the algorithm is doing.
You check through the data and notice one interesting thing: 90% of your sales are to customers 18-24. But you know you sell yoga pants that to appeal to customers 18 to 64.
Next you look at your audience targeting. You are targeting women 18 to 64, but your sales come only from your youngest customers.
Why? The Facebook algorithm has figured out that your ads appeal to the youngest customers and is showing it only to the youngest customers.
But the algorithm will never figure out how to create an ad that appeals to older customers.
The way you avoid mistake four is to let the campaign run to younger audiences. The way you avoid mistake five is by creating a new campaign for older audiences, and optimizing it until you achieve your high level Facebook objective: a ROAS of over 2.
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