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Does Facebook Advertising Work for Small Business? 5 Keys to Success.

By Steve Scheidecker -- Get free updates of new posts here

Facebook AdvertisingFacebook has become an increasingly important part of the social fabric of our world. It’s hard to imagine communicating in a world without Facebook — its a great platform. If your like me, you check your Facebook feed multiple times throughout the day. Staying connected to friends and family provides an escape from the monotony of the day. Since it’s inception people have loved Facebook and the perception has remained generally positive as Facebook has scaled to billions of users. While Facebook has expanded exponentially, Facebook advertising has been slow to emerge from the shadows. If your a business owner I’d cringe even asking you about Facebook Advertising. If your a business owner and have tried Facebook Advertising chances are that your opinion will not be optimistic. In fact you might feel like you’ve been ripped off.

The average small business owner tries their first Facebook Advertising campaign with a budget of $500. Such an investment won’t break the bank, but is expected to be sufficient to determine if results are produced. After the campaign has ended business owners see the results in terms of “Post Engagements”, “Likes”, “Comments”, “Clicks” and “Reach.” If any of these metrics actually mattered a business owner might feel good about their campaign. The problem is that the only thing that really matters is sales and the majority of business owners fail to generate sales using Facebook Advertising. Does this mean that Facebook Advertising doesn’t work? Absolutely not.

Here is an example of a Facebook Advertising campaign I executed:
Facebook Results

The highlights of this campaign:
* 5% Click Through Rate. (1 out of 20 people clicked the ad)
* $.07 Cost Per Click. This is a bargain.
* Not shown: 239 Conversions. (Submitted form on landing page)
* Not shown: $.31 Cost Per Conversion.

These are great results — a lower cost per conversion than Google Adwords.

If you’ve tried Facebook Advertising you have probably used it wrong. This isn’t your fault, it’s Facebooks fault. Facebook promotes it’s advertising product as being a simple cookie cutter advertising solution. With the click of a button you can “Boost a Post” or “Promote a Page.” Don’t be lured in by how simple Facebook Advertising seems, it’s not. It’s easy to spend money on Facebook Advertising, it’s very hard to produce results.

Keys to Success with Facebook Advertising

1. Target Demographic Correlations

The biggest mistake that is made with Facebook Advertising is failing to target the right people. Facebook features such as “Boost Post” or “Promote Page” down-play the importance of targeting. You must spend time analyzing existing customers and determining WHO you want to reach. Developing a detailed profile of target customers allows you to spend your budget smarter. In the campaign shown above I used complex targeting. That is the reason that only $74 was spent, I don’t meet my daily budget for this campaign because my targeting is so complex. For example, if your company does home remodeling you could target people that are 24 years or older and recently got married. Newly-weds are one of the groups most likely to remodel their home. Focusing on a niche helps you reach only people that could potentially make a purchase.

2. Appeal to Customers Needs

Most small businesses simply tell customers what they do in Facebook Advertising, “The top home remodeler in California” or “Your source for granite countertops.” Or they promote a sale, “50% Off Countertops This Weekend Only.” They are speaking at the customer instead of drawing the customer in. You must remember that users do not login to Facebook to make a purchase. They didn’t search for you, they are in control. The key to Facebook is capturing attention using an informational message, not hard selling. The message must convince the viewer that you understand their problem and have valuable information for them. Using the targeting example provided in step 1, a message could be as simple as “You didn’t marry his/her house! Are you starting the marriage renovation? Discover 10 FREE home remodeling tips for newly-weds.” If you combined this message with an entertaining image of a bachelor-pad, you could capture some attention!

3. Low Friction Offer

Just to emphasize the point already made in Step 2. We suggested presenting the user with “10 Free Home Remodeling Tips For Newly-Weds.” This is a much lighter offer than “Buy, buy, buy.” Facebook users are not looking to make a purchase, they are looking to be entertained. One of the ways of entertaining the user is to offer them informational content for free.

4. Targeted Landing Pages

Even if you get thousands of clicks they mean nothing if you are not converting. You must redirect users to a landing page with the same theme as your advertising message. If you direct users to your home-page that is a major mistake! In the example given in steps 2 and 3, you should direct the user to a landing page where they can download “10 Free home remodeling tips for newly-weds” by simply providing their email address. This execution of a low friction offer allows you to capture an email address in order to follow-up with users. Having their email address allows you to continue the conversation, build trust and eventually earn their business.

5. Always “Pay Per Click” and set Specific Amount

Facebook has made their platform difficult by offering too many pay-for-performance metrics. I’m not going to waste time covering all the metrics because they don’t matter. The only pay-per-performance metric you should use is Pay Per Click. Please keep in mind this is no longer the default. You must make sure that you select “Pay Per Click.” You don’t want just any “Pay Per Click” amount either, make sure that you set a specific cost per click amount. Once again, a specific amount is not the default. All of the default Facebook Advertising options are in the interest of Facebook, not you.

Why is cost per click so important? Because it is the only metric that properly measure’s Facebooks contribution. You are using Facebook to capture attention and get people to visit your website. If Facebook is able to send traffic to your website at a competitive Cost Per Click then their advertising makes sense. If a campaign is unable to deliver traffic at a low “Cost Per Click” then it’s not worth the investment.

Summary

Facebook advertising can an effective advertising medium for small businesses, but it requires a large investment of time. It’s not easy. It’s not as simple as pushing a button. The money that you spend on the advertising will pale in comparison to the amount of time you spend developing your campaigns. You must plan on devoting a significant amount of time to formulating complex targeting criteria, crafting compelling messages and building coordinating landing pages. If you move forward with Facebook Advertising you MUST spend hours developing and testing variations of each of these factors.

If you don’t plan on putting forth the time and effort to make Facebook Advertising work, then save your money. It’s critical that you view Facebook Advertising as the complex beast that it is and use it accordingly.

Take-Aways:

  • Facebook Advertising CAN make your business money.
  • Facebook Advertising is complex. It’s NOT easy. Only advertise on Facebook if you can commit time to developing your campaigns.
  • Targeting correlations are key. If you’re always spending your entire daily budget then your targeting needs to be MORE specific.
  • Facebook Advertising is unlikely to produce immediately sales. Viewers are not in a buying mentality. Your goal should be capturing contact information by offering valuable content, not immediately selling products.
  • Always use “Pay Per Click” for Facebook Advertising with a set amount per click. This is not the default. All of the default Facebook Advertising settings are in the interest of Facebook, not you.

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