5 Ways Your Business is Losing Money on Facebook Ads
Facebook advertising can be a hugely lucrative digital marketing tool (with some of our clients making up to 18-20 times return on investment or more). However, companies need to plan and implement strategies to maximise return for their own unique business, product and audience, rather than looking to replicate what might have worked for another brand.
Here's five potential pitfalls marketers and business owners should be aware of and how to avoid these mistakes;
1. Poor use of promoted posts
As Social Bakers pointed out in 'Marketers: Stop Promoting Underperforming Content and Damaging Your Brand', around half of content promoted by brands wasn't their best performing content. Not only does this mean that poorer content is promoted, and more negative feedback is received, but cost per click and CPM increases whilst having much lower impact than the higher quality content could have achieved. Content graded as C or D made up more than half of total promoted content (see chart below).
A more efficient use of promoted posts would be of benefit to many businesses. On the other hand, some brands are still using promoted posts as the sole ad type on Facebook, even though there are over 20 advert objectives available. Selecting the right objective(s) for your business and tailoring your strategy is a project well worth investing in, given the returns possible and the financial risks involved in simply boosting selected posts without a plan. Rarely is a promoted-post the right objective to adopt, and only in the right circumstances should it be used.
2. Not being set up correctly
It's a given that any business wanting to take Facebook ads seriously, or even test them within the business, will need to ensure that the Facebook pixel is correctly installed on their website, and tested to ensure it is firing correctly. This piece of functionality is critical to the success of your campaigns, and will allow you to re-target website visitors, re-target abandoned carts to boost conversions, create custom audiences and lookalike audiences, and much more.
There are also other tracking issues to consider, such as appending UTM parameters to your landing page URL, setting up attribution windows and custom reports within Facebook Advert Manager or Power Editor. This often requires a specialist to guide you with. Not having some of these basics in place is a key step to ensuring you can put the right tools in place to gain maximum ROI.
3. Lack of strategy or cohesion
Facebook ad campaigns, just like any other important channel in your marketing funnel, need a focused strategy and joined-up approach within the business to be most effective. Some businesses trial Facebook ads with a poorly planned approach, and waste precious budget testing a campaign that is either poorly planned or executed, or sometimes both. The result is likely to be a huge under-estimate of the potential of Facebook ads for the business, and can be too easily discounted as not right for the business model of the company. However, missing out on the opportunity and gaining return whilst the price of ads are still highly competitive compared to other channels could be a costly mistake.
4. Creative errors
We've all seen poorly executed Facebook ads. At best, they don't generate any interest and waste money reaching people who don't convert. At worst, add into this brand perception damage and we have costly longer-term impact too. There are many mistakes that a brand can make with Facebook advert creative, not least as it is a relatively new and ever-changing medium. We consider everything from the 20% rule (the impact of which has now reduced, but is still important for reducing costs), to the actual imagery, video and copy used within the ad and landing page. Facebook have a range of resources to help, such as this best-practice copy guide.
Making creative improvements and testing is one of the biggest wins for your Facebook ad efficiency.
5. Targeting problems
Correct Facebook targeting is another area where brands can find the largest losses or gains to be made. As we uncovered in our previous blog on Facebook targeting, Facebook builds up data on individuals interests' (whether or not it is completely accurate!), which marketers can use to target ads (together with demographic or customer data if required).
Audience data can be segmented, together with any data that the business can input as a custom audience, and is used to create an ad plan for your campaign. Brands can miss out on efficiencies to be made here in a variety of ways, for example, by targeting too much of a large, broad audience (for example, I've been shown a prospecting ad from Gousto, but I may not have an interest in convenience cookery). Some businesses miss opportunities to tie in data from other parts of the business, and loose out on converting new leads from fallout. Alternatively, some businesses may simply not be aware of the right audience combinations and options to test to reach their ideal target customer. New audience options are occasionally released and businesses need to be aware of these early on in order to maximise these opportunities.
There are many ways businesses can loose money on social media, so don't be one of them! Be sure to effectively plan and implement your engaging campaigns for maximum return on investment and to gain advocates as well as customers.
Need some help planning your Facebook advertising strategy, audiences or creative? Get in touch and ask about our Facebook advert planning packages.