I recently read that General Motors had decided to stop their Facebook ad spend.
The fact that they fork out at least $10 million a year on Facebook Ads made this pretty big news for the marketing industry (and Facebook).
Was it a strategy mistake? Maybe. Did they scale too fast? Perhaps. Or did they misunderstand the value of Facebook Advertising? Probably.
As a Facebook Advertiser for Mindvalley products, I understand the struggles that businesses face when they venture into Facebook Ads. You see – to date, there has been some problems in finding a way to expand Facebook Ads on a big scale, that’s why it is highly important that you grow your ad spend at a manageable pace to avoid getting burned by putting “all you eggs in one basket”.
People say that you can’t sell anything on Facebook. Well, I beg to differ. Here at Mindvalley, we have successfully scaled our campaigns to a point where we can see a return in our investments within three to four months.
Here, I share the five elements to keep your Facebook Ad accounts in the green.
1) Determine Your Metrics
First off, you must make it your mission to know what end result you want for your campaigns. Typically, direct response campaigns tend to focus on metrics such as leads and sales. A good measure would be to use % Return.
For example, if you spend $100 in Week One of your campaign, how long will it take you to break even (earn $100 or 100% return)? Once you know your metrics, set a goal for yourself. Your ability to stay on track with your target and hit your goal will determine if Facebook Advertising is a suitable avenue for your advertising needs.
2) Precise Targeting
Who is your target market? These guys are your “ideal customers”. If you are familiar with the targeting options for Facebook, you can narrow down your target audience and avoid spending extra money on people who will never buy your products. If you don’t really know who your ideal buyers are yet, the best way is to split test. Which brings us to our next point.
3) Test, Test, TEST!
The key to maximizing Return On Investment (ROI) on Facebook Ads is to begin your campaigns with your most targeted audience and slowly expand to wider audiences. For example, you might want to try targeting certain age groups, genders and interests and see which makes you the most profit and work from there to expand your focus. Don’t be afraid to stick with what you know and always try to expand your reach by strategic testing.
4) Tracking Tools
How do you know if you are seeing returns on your investment? This is easy when you’re managing small businesses that don’t have multiple traffic sources, but it can become a little tricky when you have to manage multiple campaigns.
Google Analytics is a free tool you can use to calculate profits from different traffic sources. There are other paid tools out there that can offer more valuable tracking insights – you will have to decide how important this tool is for your business. Regardless, Google Analytics is an invaluable tool to start with.
5) Constant Monitoring
Any Facebook Advertiser out there can tell you that Facebook campaigns have a very short life span and require frequent monitoring.
There are two types of monitoring that needs to be done:
- One at a micro level, which is how “healthy” your campaigns are at the ad level, where you look at metrics like Click Through Rates; and
- One at the macro level, where you look at how much returns you are making based on your chosen metrics
With these five ingredients you should be able to run profitable advertising campaigns on Facebook, which, if supported with a strong backend funnel to back it up, can successfully boost your conversion rates.
Last but not least, a key thing to remember in any advertising campaign is to always start small and to only scale your advertising efforts up when your campaigns prove to be profitable.
Did this help? Feel free to leave your comments to discuss and share your insights on Facebook Advertising below.
[googleplusauthor] is our Facebook Advertising Specialist on Mindvalley’s Online Traffic Team