Are Facebook ads worth it?

What I’ve learnt from 4 years of Facebook marketing and over $100,000 spent.

Before I tell you what I’ve learned about Facebook marketing, let me tell you what I’ve learned about marketing in general.

I’ve been a small business marketer now for over 15 years and have done nearly every type of online and offline marketing that is available to small businesses on a reasonable budget.

I’m not claiming to be any kind of marketing guru here - I’ve only ever done the marketing for my own businesses - but if there’s one thing I’ve learned it’s this:

Every business needs to be approached differently when it comes to marketing.

What works for one business type may not work for another. What works for one industry may not work for another. What works for one demographic may not work for another. What works in one country may not work in another… The list goes on and you get my point!

So what does that mean for a business owner (or marketing manager)?

That means that you need to learn as much as you can about all the different marketing options (or at least the main ones) and then TRY THEM OUT and TEST THEM.

This last point is incredibly important. If you’re not testing the results of every single marketing strategy that you’re paying for then you might as well not by trying them at all

So - is Facebook advertising worth it?

That’s what you really want to know, isn’t it?

Well, as you can hopefully guess from what I’ve written above, it DEPENDS.

It depends on your industry, your specific business model, your products and services, your target demographic, your ability as a marketer, and probably a whole bunch of other things that I can’t think of right now.

To make this a bit clearer, I’ll give you two examples.

Apart from Bookible, I currently run two other businesses.

One is a Spanish language school (www.thespanishcat.com), and the other is a tapas bar and restaurant (www.vamos.net.au).

Now, in some ways these businesses are similar (both service businesses and are Spanish/Latin American themed) but as far as marketing they are very different.

I’ve spent quite a bit of money advertising both of them on Facebook, and the results have been incredibly different.

CASE STUDY 1: THE SPANISH CAT

For my Spanish language school, Facebook ads have not proven very effective EXCEPT for re-targeting (which means showing ads JUST to people who have already visited your website).

The other main type of Facebook ad that I ran for The Spanish Cat was an ad promoting our free, 5 week online Spanish course.

I tried promoting it to a number of different interests and also a Lookalike audience based on our mailing list.

Here are the results:

Ad 1.

Target: Lookalike audience narrowed by interest groups

Goal: Get people to sign up for our free 5 week online Spanish course and then get them to convert to customers.

Total cost $3150

Number of purchases: 14

Cost per purchase: $225

Value of each purchase: Our average lifetime customer value is around $400 for this business, so a cost of $225 for each customer may not seem too bad. However, the cost of servicing each customer is around $250, so we actually made a loss with this ad 🙁

Ad 2.

Target: Interest groups only (different interest groups from those used above)

Goal: Get people to sign up for our free 5 week online Spanish course and then get them to convert to customers.

Total cost $574

Number of purchases: 8

Cost per purchase: around $75

Value of each purchase: This is better than the above ad, but the ROI is still quite a bit lower than for other forms of advertising for this business (see my Google Adwords report below).

Ad 3.

Target: Website visitors (tracked by Facebook pixel)

Goal: Get people to sign up for our free 5 week online Spanish course and then get them to convert to customers.

Total cost $1551

Number of purchases: 195

Cost per purchase: around $7.90

Value of each purchase: Now this is a MUCH better result as you can see, but keep in mind that these are people who had already visited our website and therefore were already interested in our products and services.

Ad 4.

Target: Website visitors (tracked by Facebook pixel)

Goal: Send visitors directly to the sign up page on our website in order to make a purchase.

Total cost $348 (at time of writing)

Number of purchases: 80

Cost per purchase: around $4.35

Value of each purchase: This is by far our highest performing ad, and as such it is still running!

CONCLUSION:

Now, this doesn’t mean that our free course doesn’t work.

We promote our free online course directly on our website and lots of people sign up for it and those people DO become customers. And many of them give us great feedback on the free course too.

So it does work. It just doesn’t work on Facebook.

Either that - or I’m just not doing it right. Which is also possible. I just haven’t found the right audience yet, or the right email sequence, or the right lead magnet… There are so many factors involved it’s hard to know which one it is. Unless you test them out.

So - I’m not giving up. I just haven’t nailed it yet (and maybe never will).

Now, don’t get disheartened.

If you run a successful business - then you KNOW that running a business is not about being given the MAGIC BULLET or SECRET RECIPE that so many companies (especially on Facebook) promise.

It’s much more like a scientific process.

It’s about testing, and measuring, and often failing, and testing again. It’s about using your creativity to come up with new possible ways of doing things, and testing those out.

And that’s what makes it FUN!

It’s not about being given the magic bullet, but about finding your own magic bullet that works for you and your audience and your business.

That’s what will give your business the edge, and what will make it survive well into the future.

And that is what will give you, as a business person, an edge as well. Because once you know how to do that, you can keep doing it for your business in any situation and even for any other business that you decide to build.

CASE STUDY TWO: VAMOS TAPAS BAR AND RESTAURANT

For Vamos, the main type of Facebook ads that I run are for our events. We have lots of events: live music events, wine tastings, DJs, etc.

And for each one, I create an event on Facebook and run an ad (or a series of different ads that I test against each other) promoting that event.

See below for an example:

Are Facebook ads worth it

Now, these type of ads are extremely successful for this particular business.

Each week we get hundreds of people to our events, and Facebook ads have been directly responsible in part for the success of this business.

People see our ads, they share them with their friends or tag their friends in them, and they click on the links in the ads and they purchase tickets.

CONCLUSION:

Why is this?

Why is it that Facebook ads work so much better for Vamos than for The Spanish Cat?

Well, I have a few theories:

  • The type of business: Vamos is a very social business (eating and drinking and music) and Facebook is SOCIAL MEDIA. This means that when people are on Facebook they are generally interested in SOCIALIZING. Whether it be sharing stories or photos, or finding events to go to with their friends, people are on there for social purposes and the ads for Vamos tap into that desire.
  • The Spanish Cat, on the other hand, is a much more personal thing. Learning a language is something you do for yourself, and your friends may not always be interested in doing it with you. It’s a bit like going to the gym - they say they will, but in the end they don’t! So Facebook may not be the best platform to find new leads for this business.
  • The price of a Vamos event is not very high. Prices range from $5 to $75 but are usually somewhere in the middle. And the events go for just one night. This means that it’s a relatively small investment, in both time and money, and people are much more likely to make a snap decision and purchase a ticket to an event with us, especially if their friends are interested too.
  • The Spanish Cat, on the other hand, costs over $200 for an 8 week course. That means that it’s a much larger investment.

All up, there are probably a range of other reasons why ads on Facebook for these businesses produce such different results, but hopefully this information above will give you an insight into whether or not Facebook ads might work for your business, and if so, how you’re going to go about running them.

GOOGLE ADWORDS

As an interesting side note to these case studies, one thing I would like to mention is that running Google Adwords ads for these two businesses has produced exactly the opposite results.

Adwords ads for The Spanish Cat have been exceptionally successful, whereas for Vamos they’ve hardly worked at all.

Adwords ads put your ad at the top of Google for your chosen keywords, and so for The Spanish Cat I run ads on terms like “Spanish classes Melbourne” and “Spanish classes Sydney”. For Vamos, I’ve tried keywords like “Tapas bar Melbourne” and “Restaurant Melbourne”.

Now, again I think this comes down to intention. When someone types “Spanish classes Melbourne” into Google, they’re almost certainly looking for a way to learn Spanish. They’re already in that “purchasing phase” and they’re just looking for a solution. For The Spanish Cat, this is the perfect time to target them with a relevant ad.

Not only that, but there aren’t that many options to choose from, and people are willing to travel for a good school.

Now, for Vamos it’s very different. They may well be searching for a tapas bar to eat in that night, but...

(a) there are a lot of options to choose from
(b) most of the search results are review sites like Google places, TripAdvisor, OpenTable and Yelp which people trust and click on
(c) they’re probably looking for somewhere close by, which is hard to target with more general keywords (and people often won’t be so specific with their location when entering keywords into Google)

So all in all, Google ads don't work well for Vamos, whereas they work great for The Spanish Cat.

FINAL CONCLUSION

Learn as much as you can about the different marketing and advertising platforms and channels available to you, and then think about whether or not each method will be suitable for your business type.

Think about people’s intentions when they’re likely to see your ad, and how you can tap into that intention and work with it.

And most importantly, run different tests on different platforms and measure the results and see which one works best. Then take that and refine it. Make it work as well as absolutely possible. Then run more tests and see how those work. And if they do, refine them...

In the end, you’ll find out what works best for your business and your audience.

And that is your very own SECRET SAUCE! And that's what makes you and your business AWESOME!

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