Going into what is expected to be a recording setting political year, you may be concerned that your budget is not going to get the same results it once did on Facebook and other social platforms. Luckily, there’s a proven method to identify your most profitable audience without having to spend a ton of money. In fact, we’ve been able to identify some of our most successful audience targets with just a $10 Facebook campaign budget.
Now a $10 budget may seem like some clickbaity BS that we just threw out there, but there is some actual merit to this method. However, you do need to use some discretion before jumping in. Also with any digital campaign, you’ll need to continually test and adapt in order to get the most out of your campaigns.
Create your campaign
The first logical step, of course, is setting up your campaign. 9 times out of 10, we tend to stick to conversion objectives because isn’t it just more convenient when a campaign is targeting people most likely to do what you want them to? Conversions objectives refers to the events your business would want to drive. These conversions are setup in the Facebook events manager. If you do not have a technical background, Facebook offers an event setup tool, which easily allows you to define events like “add to cart” and “contact”.
When it comes to deciding what a conversion should be for your campaign, consider what success looks like for your business, keeping in mind that Facebook requires 50 conversions per week (you read that correctly, per week) when optimizing for conversions.
In order to properly track conversions, you must install the Facebook tracking pixel. If you have not done so already, check out how to here.
How does this actually work? Suppose you are selling a t-shirt for $25. Let’s say you make a 50% profit margin on the shirt. That means you need to have an average cost-per-acquisition (CPA) below $12.50 to remain profitable. In order for this test to run efficiently, you need to limit yourself to one piece of ad creative per ad set. If you need to use multiple pieces of creative in your testing, you’ll need to raise the budget.
From the campaign level, you will want to setup your Facebook split test for the audience variable.
Finding Your Audience
If you’re just getting started and have no idea who your target audience might be, a great place to start is with your Facebook Page’s Audience Insights Tool. This tool will offer you a wealth of information about the people that are already engaging with your page.
Split Test Ad Set Setup
When setting testing audiences at the ad set level, there are a few data points you’ll need to benchmark.
The optimal testing audience size is between 50,000 and 250,000. At this level, you’ll want a broader sample. A more narrow audience will drive up the CPM (Cost Per Thousand Impressions) and potentially not yield you the necessary results.
Impressions are the number of times your content is displayed, no matter if it was clicked or not. You’ll need at least 1,000 impressions to get enough statistically relevant data from your testing. With this base of 1,000 impressions, you’ll begin to have an understanding of what your expected click-through-rate (CTR) and cost per conversion will be.
Set your test to run for at least 2-3 days. We get the best results after running our tests over a 7 day period, but if you’re impatient and need results now, you can cut it down. If you’re getting no results, it may be because your targeting is too narrow or your cost controls are too restrictive. Try adjusting those first before abandoning the test.
Analyzing your results
Once you’ve run your test, you’ll need to analyze the data to identify a winning audience and begin your long term profitable campaigns. There are 5 main key performance indicators (KPIs) that you’ll need to analyze to identify your ideal custom audience.
Cost Per Conversion
This is the key action people take on your website. It could be link clicks, email sign-ups, purchases. You take the total cost divided by the total number of conversions. It’s simple, the lower the cost per conversion, the better the audience.
Click-Through Rate (CTR)
Click-through rate is the number of clicks divided by the number of impressions, expressed as a percentage. This tells you if people are clicking through to your landing page.
For example, if your ad got 10 link clicks and reached 1,000 people, your CTR would be 1% .
You’re looking for a CTR greater than 1.5% as an indicator you have an interested audience.
Cost Per Click (CPC)
This is the total campaign cost divided by the number of link clicks. This tells you the average cost per website visitor.
Relevancy score is a calculation by Facebook about the relevancy of your ad to that audience. It’s built by taking signals from ad performance (clicks, cost, engagements), and is turned into a score.
A relevance score below 6 can be considered as “irrelevant” for your current audience. Pro Tip: Facebook penalizes ads with lower relevance score and it will actually increase the overall cost of your campaign.
Cost Per Thousand Impressions (CPM)
This is a standard unit of measure for advertisements. It measures the cost of serving 1,000 ad impressions to that audience. Whether a CPM is high is relative to the product you are advertising.
Facebook’s Business Manager can seem daunting to first time users. Most business owners have heard about how powerful social media’s targeting has been for other businesses, and they tend to blow it off as undue hype because it “doesn’t work for them”. The reality is unless you know who and how to target your next customers, social media is no more effective than a highway billboard. Take the time to identify your most profitable audience and then give Facebook advertising a chance.