Facebook Advertising

Does Facebook Advertising Really Work by Joe The Goat Farmer, licensed under CC by 2.0

To serious entrepreneurs out there, you might ask why you should advertise on Facebook? Our response is, “Why not?” Facebook is not the most popular option when it comes to advertising, but its effectiveness cannot be undermined. A study by eMarketer shows that 96% of social marketers consider Facebook as the most effective and powerful platform for advertising. What makes it so effective ? Here are a few reasons:

• There are tons of users putting their information such as age, location, interests on their profile voluntarily. This alone gives Facebook the edge of knowing their users and what their preferences are.
  
• Facebook Ads do not interrupt the users of their browsing experience (unlike with YouTube). The ads are dropped into the news feed, and the users can just continue scrolling to browse. Admit it; you may not even have recognised most of these ads. The good thing is that Facebook can drop sponsored ads that are pointed to the users’ interest which makes it highly likely that they will click the ads and view them. Based on what they click and the impressions they make, Facebook can continue to drop sponsored ads and stories that could be of interest without disrupting the natural flow of your Facebook browsing experience.
  
• Some ads are placed on the sidebar, but these too aren’t disruptive. They just fill up blank spaces in the pages.

• Simply put, Facebook advertising are paid ads, promotions, and product offers that are fed into the newsfeed of targeted audience in the platform. Heads up, Facebook has 1.23 daily active users as reported by TechCrunch in 2016. That was over a year ago. There are two billion monthly users according to Facebook. One of five minutes that people in the US use on mobile is spent on Facebook or Instagram.

So tell us, if you’re an entrepreneur whose ads will be displayed on the newsfeed of hundreds of users who have interest in your product, would you not consider Facebook advertising? Sure you might consider. It’s simple and effective, but only if you do it right. So that’s what we’ll do - pull up all the expert advice and put them in a nutshell for you.

Things You Need to Get Started With Facebook Ads

Roughly, you will need a few basics before you start creating your Facebook Ads.

Choosing the Right Objectives or Business Goals

Your objectives will lead you in the right direction. To be able to pin the right objective, you must know your desired outcome that you want to achieve from your ads. Examples of business goals include increasing sales, increasing brand awareness or increasing downloads of your app or combination of any of these. If you are aware of what you want to achieve, you are likely to deploy the most effective ad types on Facebook and design a powerful campaign that will bring you ROI. On a larger scale, these objectives can be simplified as awareness, engagement or conversion.

• Raise Awareness. Get more people to discover your business and increase their awareness. These objectives will point you to the next steps: Reach people near your business, Get video views or Send people to your websites. Start by sharing your value proposition in creative ways and connect with them to build trust and meaningful relationship.
  

Facebook will take care of extending your reach to the people who have interests that align with your business no matter where they are. You can even extend your ad reach on Instagram. There are over two billion people using Facebook and 700 million on Instagram every month.  Sixty percent of people discover new products on Instagram. Let the next discovery be your products. Likewise, Facebook has a strong mechanism for finding people who are nearby your shop so you can turn them into new customers. Also, compelling videos are effective means of telling your brand story in motion and capturing your audience attention to jump-start engagement.

• Grow Engagement. After you have introduced your business to people or having them discover you, let people explore your site and your offers or invite them to install your app. These Facebook ad objectives are most effective for this goal - Traffic, Lead Generation, App Installs, Engagement, Video Views and Messages.
  
• Boost Conversions with a Call to Action. After you’ve gained a following for your business, it’s time to use that to your business’ advantage. Depending on their level of engagement, you can nudge them to sign-up, purchase, or spread the word about your business. These are among effective Facebook Ad objectives you can use - online conversions, store visits - but there are others depending on your specific calls to action.

Choosing Your Audience

Facebook uses powerful selection tools for targeting people who are right for your business. As there are over a billion users on Facebook every day, it is an important step to know who your customers are and target the people who potentially have the highest interest in your product. There are three types of ways you can target the right audience.

Core Audience

Identify your core audience based on attributes that fit into your buyer persona. The Facebook Ads Manager allows you to choose your audience based on four parameters: Demographics, Location, Interests and Behaviour.

Use Facebook's Demographics and segmentation tools to serve your ads to people who match your ideal customer.

• Demographics  Tailor your audience based on specific criteria such as age, gender, education and job title. You can even use other criteria such as relationship status, life events and affiliations (cultural or social).

• Location
  Focus on audience in a specific country, city, state or even zip code. The advanced options allows you to choose people who live in the area or just currently located in the area. This gives you the chance to promote your offers to shoppers within the vicinity of your store.
  
• Interests Interests data is based on information that Facebook has gathered from users’ interactions with pages, events, and apps within Facebook. Choose the interests or hobbies of people that you are targeting.

• Behaviour This option allows you to target people based on their buying behaviour, device usage , travel patterns, digital activities such app downloads or online gaming.  
  
• Connections You can use this option either to reach people who are connected to  your Facebook pages, events or exclude them to find new audience and potential customers.

Custom Audiences

Custom audiences helps you target people who are already connected to your page on Facebook or are already existing customers or have awareness or interest in your business. There are three main sources for your custom audience.

• Find mobile numbers or emails of your existing customer base from your contacts and CRM system and connect with them on Facebook.
• Install the Facebook pixel on your website to create a custom audience out of people who have visited and have interest in your website.
• Turn your mobile app users into custom audience  by installing Facebook SDK into your app so you can serve them ads to continue playing games or buy game items.

                                 

Lookalike Audiences

Reach out to people who are similar to audiences that are already interested in your business. To do this, choose a source audience; for example your custom audience. Then, Facebook will identify the common qualities of people who are similar or have the same attributes in comparison to your existing audience. The size and source you choose for your Lookalike audience affects the results. The smaller the size of your Lookalike Audience, the higher similarity will result. Carefully targeted source audience will create better results compared to “all customers.”

Choosing the Place to Run your Ad

Placing an ad on Facebook is like posting what’s on your mind. It’s quick, easy and it goes a long way. You only need to build your ad once and post it in your preferred places. More places to post means you reach more audience and you let new potential customers discover your business. Facebook lets you post your ads on Facebook and Instagram platforms and apps or network of apps such as Messenger and Audience Network.

Facebook

Facebook boasts two billion users worldwide. It is a valuable tool that lets you target audiences based on their demographics and preferred content, so your ad reaches highly potential leads.

Messenger

When you post an ad on Messenger, it will appear on the home tab of the app. There are 1.3 billion people using and interacting and doing business on Messenger. According to Facebook Business, 53% of people are likely to shop with a business with a direct contact method such as Messenger. Similarly, people prefer to message rather than phone customer service. That being said, is a huge opportunity for your business to be discovered by posting high-impact ads that appeal to your target audience. Provide a seamless experience to your potential customers from ad offers up to after-sales support. Encouraging purchases, offer suggestions and provide support all in one place. This makes Messenger a valuable marketing and selling venue for you and a convenient place for your audience to shop. Running an ad on Messenger gives you the following advantages: have conversations directly with customers inside your business page and build relationships with them, communicate with them anywhere at any time and let them know when they can start a chat with you.

The option to place an ad on Messenger is available if you have chosen any of the following objectives (we mentioned above): Traffic, Conversions, App Install, Reach, Messages, and Brand Awareness. When the user taps the ad on their home tab, the ad redirects them to a destination such as (your business website, your app or a Messenger conversation).  

You can choose the Automatic placement of an ad on Messenger. This gives the advantage of delivering and generating impressions to your placement (and therefore driving results) with a minimum cost. For now, Messenger is not available as a standalone placement. When you choose to edit ad placements,  you can include Messenger if you have selected Facebook Feed.

Instagram

As much as sixty percent of Instagram users say that they discover about products and services on Instagram. Instagram is an image-driven social platform that makes it highly powerful to advertise your business. There are a billion photos liked on Instagram each day.

Today’s generation is all about expressing themselves, connecting with like-minded people, being inspired and taking action. People come to Instagram to make this happen. Brands can succeed with Instagram advertising if they can get to the heart of today’s generation by inspiring them, they are more likely to engage with your brand which could lead to conversion and even advocacy. If your audience can identify with your brand, they are more likely going to buy your products and even promote them by sharing your ads on Instagram if they have a good experience or encounter as a customer.

Instagram supports ads in video, photo, carousel and stories formats. Photo ads can come in square or landscape format. Clean, simple and creative canvas tells stories in rich format. Carousel Ads allow your audience to explore more about your business through several photos or videos in a single ad. Stories Ads are interstitial photos and videos that run in between stories that users are interested in. Recently, Instagram announced that ads will now be able to publish up to three pieces of content in a single story. According to Instagram, this gives advertisers more freedom on sequential storytelling using photo and video content.

Some popular practices by successful Instagram campaigns include consistent posting, sharing behind-the-scenes of business, showcasing your brand without the hard sell (featuring your products and services, having calls to action, showing personality, engaging and connecting and following back your followers using hashtags, and sharing celebrations with your customers.

To place an ad on Instagram, do the following in Ads Manager as provided by Facebook.

1. Go to Ads Manager
2. Click Create an Ad
3. Select the Reach, Video views, Conversions, App installs, Lead Generation or Traffic objective
4. In the Ad Set section, click Placements
5. Choose the Edit Placements, then select the Instagram
6. Click Stories
7. Complete the rest of the steps and continue developing your ad campaign
8. When you're okay with your changes, click Review Changes to publish

Audience Network

You can increase your conversions up to 15% by placing ads on Audience Network. Audience network is a network of apps and websites on the Facebook platform that displays Facebook ads. According to Facebook, forty percent of the top 500. Apps are connected to Audience Network. This is a great opportunity to spread your reach to other places where potential customers are spending their time. Audience Network supports the following objectives through video ads: brand awareness, reach, engagement and increase in video views. It also supports traffic; app installs, conversions and product catalog sales.

Ads outside of Facebook will behave depending on the type of objective chosen by advertisers. For example, if the advertiser is aiming for traffic, the ad will open a link in a new browser window. If their object is to increase app installs, the ad will prompt the user to install an app or launch an existing app on their mobile device.

Setting Your Budget

Budget is an essential aspect of your ad placement on Facebook. It is more of a cost control tool rather than a billing system. Budget is not equivalent to the amount spent because you will not be billed if the budget you set wasn’t used at all.

When setting your budget, you have the choice to control either your total ad spend for the whole time you want to run your campaign or the cost per optimisation event.

Types of budgets:

1. Daily Budgets: average cost limit you set on an ad set or campaign each day.
2. Lifetime Budget - the total limit you set for the entire time you want to run your ad set or your campaign.

Think of budget this way: You are willing to spend $1000 for ads (e.g. link clicks), but you want to either set a bid cap (per click) or tell Facebook to use the lowest cost bid strategy without a bid cap. The second option tells the ad delivery system to get the most clicks at the lowest cost. That way, you can maximise your $1000 budget and have a clear picture of how it is being spent.

Note, however, that there are factors that affect how your budget is spent. For instance, Facebook is unable to find enough people to match your ad based on the constraints you have set; it may be unable to use up the budget. Thus, it affects the performance of your ad. For this, you may have to allow some flexibility by broadening your target audience.

How Does Facebook Spend My Budget?

This depends on the type of delivery you have chosen. If you have chosen Standard Delivery, Facebook will spread your budget evenly throughout your campaign. The other option is Accelerated Delivery, which is practical if you are working with a limited campaign period to get results or if your campaign is time-bound.

In the context of whether your ads are on track with budget spending or not, changing budgets have varying effects on your ad’s performance. If it is on track (it is spending because Facebook is getting matches) raising your budget could lead to more results. But if the budget is way too high than there are matches, the budget will not be fully spent. On the other hand, lowering your budget will likely get you to spend the entire budget but may get fewer results.

If your ad set is not spending already, raising or lowering the budget won’t do anything. It simply increases or decreases the percentage you spent from your budget.

If you set a specific amount as your total budget, it is best to keep your bidding and targeting as flexible as possible, so Facebook can spend it on ads that will give a high total value.

How Does Facebook Deliver Ads?

In delivering the ads, two things are being balanced: (1) value for advertisers by helping them reach their revenue goals from their target audiences and (2) positive experience for people using the Facebook network (family of apps and services).

Remember, that an ad’s total value is determined by three variables and may be calculated as follows:

Total Value = Advertiser Bid  X  Estimated Action Rates  +  User Value

More specifically:

Total Value = (bid per click X estimated click-through rate)  +  relevance/quality factors

Or,

Total Value = (bid for conversion) X  (estimated click-through rate) X (estimated click-to-conversion rate)  +  relevance/quality factors

where:

Bids - With your objective (one or a number of actions like clicks, conversions or app installs), identify your coast goal for the bid strategy you have chosen. To allow some flexibility, this may include a bid cap (e.g. lowest cost or target cost possible) per bid strategy per optimisation event (e.g. link click or per app install).

Estimated Action Rates - This factor represents how likely Facebook folks think a given person is to take that action in an optimisation event. This is based on previous actions of that person and the historical performance data of your ad.

User Value -  It refers to the level of relevance of ads to person for whom the ads are shown, It is how useful, or interesting Facebook believes a given individual will find the ad. It is based on positive and negative feedbacks (likes, shares, exits) on the ad. This may change over time as user value definition evolves to provide a better experience for users.

The idea is for people to see ads that are relevant to their interests while allowing advertisers to reach people from their target audience who are receptive to their ads to achieve the balance. In short, Facebook matches the right ads with the right persons at the right time. This is being done by holding auctions. An auction happens each time someone is eligible to see an ad. Let’s look at the ads as participants in the auction. These ads are targeted to an audience which is a pool of eligible persons.

Based on how your audience responds to your ad, you can increase the relevance score of your ad by adjusting your targeting or creative (refers to the quality of text, images or videos in your ad). When we talk of relevance score, this is a relative metric. It is measured your ad's relevance as compared to other ads that have targeted the same audience.