How To Get $7.27 in Sales For Every $1 Invested in Facebook ads

Many entrepreneurs and companies struggle to breach online markets and turn profitable, so we’ve decided to share our recent experience.

Around 3 months ago I’ve meet Jonathan Miller, top-notch marketer & co-founder of Breeo Industries, company that manufactures smoke-reducing fire pits.

Breeo Industries just started advertising online – their Facebook Page counted less than 200 likes.

Page Likes on Breeo’s Page, Rethinking Fire

But, Jonathan’s product amazed me. Its design is just marvelous, quality is super-high and guess what else? All Breeo Industries products are 100% handcrafted in the USA.

We decided to give it a go and started preparing the campaign. 10 days later we launched a trial campaign that had 727.8% return on advertising investment.

What did the Jonathan say?

In this case study, I’ll outline key tactics used to successfully launch a product on Facebook and turn profitable from day 1. (You can also read the full article here)

Understanding the basics of Facebook advertising

Throughout the years, I’ve heard many explanations of how Facebook works. Most of them are complete BS based on ignorance and in 99% of cases those stories are nothing different than conspiracy theories.

Facebook is a content network and Facebook strives to serve ‘only the best’ content to people which find that content relevant. Facebook measures relevance by checking the ratio between content reach (impressions) and engagement rate (reactions, comments, and shares).

When your post or an ad is highly engaging, Facebook will mark it as relevant and give you a ‘push’ in distribution pipeline – in other words, you’ll get bigger reach for less money.

Every successful Facebook advertising campaign is contained from 2 factors – Content and Distribution.

Content is the king… but distribution is the queen and she wears the pants.

1. Content or ad relevance You need no more than 1000 impressions to see if your ad is working, or not. CPM (Cost-per-mille, mille=1000 impressions) is less relevant at this stage, doesn’t matter if it’s $5 or $75. Focus only on metrics that will show you how your content (ad) is performing;

  • CTR (Click-through-rate)
  • Engagement rate (Reactions, comments, shares)
  • Video view rate (Until which point (%) is your video being watched)

Through these 3 metrics, you can see if you have an ad that can drive engagement, clicks and ultimately, sales.

Note: This is not ad relevance score that Facebook displays in Ads Manager.

2. Distribution When you have an ad that’s relevant (and working), it’s time to start investing in outreach. In this stage, you should focus on metrics that bring you closer to the desired action, such as making a** sale** or acquisition and overall CPA.

  • CPM (Cost-per-mille, mille=1000 impressions)
  • CPC (Cost-per-click)
  • CVR (Conversion rate)
  • CPA (Cost-per-action)

Through these metrics you can have a direct influence on your sales record, a number of leads generated or apps installed.

For instance, you have a budget for Facebook Advertising which says $500/day. By lowering your CPC (Cost-per-click) by 50% (and maintaining landing page CVR of 4%) you can get your CPA down by 100% and double your sales/day.

Optimization breakdown

That’s the way that Facebook and Facebook advertising work.

Video killed the banner star

Original Buggles famous refrain from 1979 said ‘Video killed the radio star’, which carried a deep message about emerging trend of music videos. Radio was already dying and the video was about to explode. People could enjoy not only the audio aspect of music but a visual medium as well.

The same thing happened when Facebook introduced video advertising back in 2014. From an advertising perspective, it was just amazing, especially in the terms of distribution. Cost-per-impression in video advertising was drastically lower than banners. And it still is.

But not only that, the medium of communication changed. Two-minute video can explain (and sell) more than a greatly designed banner with a 2000 word copy. For an average reader (200 words per minute), it would take 10 minutes to read and they still wouldn’t get that special feeling of your product.

I’ve heard many times that videos are ‘expensive’ to produce, which is completely false. Solid video a.k.a. the commercial will cost you around $2000 to produce in HD or full HD.

If you’re selling something simple to understand, your videos can be shorter and done in a sequence. If you decide to go with animated explainer videos, it’s going to cost you between $500-1000 for something decent. If you want to get a video produced for less than a dinner for two, visit fiverr.com (not recommended). In other words, possibilities are merely endless.

Now let’s break the math behind the Facebook advertising with video. Imagine that your total advertising budget is around $5000. Here’s the simple math behind it;

Banner vs. video

In this imaginary case, numbers say that video production would pay off (in the terms of distribution) in around 25 days. With a video, you could reach almost 20% more people just in the first month. If you continue running for the second month, the video would get around 1 million impressions vs. a banner which would get around 500K impressions.

Don’t let your ads look like – ads

No matter if you’re using banners or videos, your ad copy shouldn’t sound like an ad copy. Rather, make your ads feel natural. When people scroll through their newsfeed, they’re being bombarded with ads. Nobody likes that. People don’t like being manipulated or pushed to do something.

Gary Halbert Quote

Don’t believe me? Just pick up the phone, type in the random number and start blabbing about the greatness of your product to a random person. In 9 out of 10 cases, they’re going to hang up. Your ads aren’t going to do any better than that, trust me.

Call-to-action (CTA) is very important part of every ad. That doesn’t mean that you should include it in the headline. Tell your story first and then ask for the money. The converse will not work.

Also, try to avoid buzzwords like FREE, new, the best, etc. in your first interaction with the target audience. Don’t bring the big guns to the game too early. You don’t want to sell them something just once – aim to build a relationship which will result in high customer retention rate. Just liked Rand Fishkin said;

Tell me Rand.

Take a look at what we did with Breeo – ad did its job perfectly.

‘The ad’

All the credit for the video production goes to Jonathan and the team from Breeo.

Start with split testing

Split testing isn’t about getting 100s of ads out and seeing which works the best. That’s not split testing, that’s not a scientific approach for long term results – that’s guesswork.

I’ve heard people talking about scaling in the same manner. Scaling campaigns is not just ramping up a budget from $10/day to $1,000/day, or even worse, $10,000.

In 99.9% of cases, it’s just a recipe for a financial disaster.

Aaaaand it’s gone

One simple, yet effective strategy we use for video advertising on Facebook is contained in 3 simple steps and performs marvelously every single time.

Before you start split testing, do the research to get a feeling of your target audience. Male or female? Both? 18-35 or maybe 36-50? Go with something similar and don’t fear to go to broad. You’ll go more specific once you have an ad that’s working.

Step 1 – Test video

We won’t start from the fact that you have a good video. You probably don’t. Your video isn’t finished when the editor says so – it’s finished when you achieve decent view rates.

Average video view rate can easily tell you to which point is your video being watched and when it actually becomes boring and people stop watching it.

For products with mass market potential you should aim for 20-25% average view rate, everything below 10% is unacceptable. For B2B and niche high-end products, everything between 10-15% is ok, below 5% is unacceptable. Why? Because both business and niche high-end products are understood by smaller groups of people – even though you’re targeting well-defined audiences, most of the people are going to find your ad boring.

Video view metrics

Also, track how much people are actually clicking on the ad and going to your website. Before you decide that your video isn’t working and you need a new one, make sure that you try strong call-to-action at the end of the video.

Step 2 – Test copy

Once you have a video that’s being watched and click you’re halfway there. Now it’s time to create a compelling message. In most cases copy on top of the video doesn’t have to be written by professional copywriter – it just has to catch the attention or briefly describe the problem or the solution in the video to the potential watcher. Including a question often does the job. Get the engagement going.

The best thing about Facebook advertising is social proof. Not just on Facebook, but on every social network. People tend to trust other people (even if they don’t know them). Having an ad with high engagement, especially if the engagement is positive, sells.

Engagement rate

High engagement results in instant brand awareness and instant sales.

Step 3 – Targeting

Here’s one trick that works marvelously on mass market products. It worked on Breeo.

Instead of having 10 different ad sets containing slightly different or same ads, try pointing 10 different ad sets to a single PPE (Page-post-engagement) ad.

PPE campaign structure

That way you don’t have to build up the social proof on 10 different ads, but just on one, which is for the start more cost effective. More engagement brings, of course, more engagement – which leads to the ad going ‘viral’ and you getting filthy rich (or not).

Ramp up the number of different demographics, see which lead to the desired action and which score higher engagement. Then optimize and scale.

Note: This strategy works extremely well on cold traffic and product launches, but fails to deliver results on retargeting and retention campaigns.

Next steps

Sticking to strategical points I’ve outlined above helped us to serve almost a half a billion impressions (498 million) to more than 200 million people across the globe for our clients, just in 2016. I’m quite sure that you can apply it to your business too, so get out there and start testing.

 

Q and A

For those who can’t afford the video production, remember you can create a video slideshow on Facebook – it’s not as impact full as video of course, but it’s dynamic and that’s good to gather attention. If you build it well it works, so it’s not that bad for a tight budget.

A/Exactly, video slideshows can work quite good!

When you run multiple ad sets to one ad, is it a dark post you make and you set it up through power editor? and choose that premade post as the ad for each ad set? That’s the only way I think that would work right to keep it from being a regular post on the page but still be targeted by multiple ad sets?

Yes, that’s the way you do it.

FB recently introduced a new thing – you can actually create a real ad (Go in publishers tools > posts) and to this exact same thing with conversion optimization and not just video views or engagement.

There isn’t much here new or insightful for advanced users. I’ve been doing $100k in Facebook spending for a couple years now. It’s always been a moving target. For some things video makes sense, for others (like a lead generation) I think it’s too much to expect a prospect to absorb. The best advice I could give is test really popular and sales relevant content. Try everything. Sometimes the learn more buttons work, sometimes a link in the text works. Don’t lock yourself into one strategy. Learn from your organic traffic. Look for the insights. And be intelligent at phrasing and imagery. This is not a science, but that doesn’t mean you can’t be scientific about it.

A/I haven’t written this for professional marketers, rather for small companies looking to get their first product out and mid-size companies that want to launch a new product via Facebook.

But yeah, it’s not a science… if you don’t write it down.