WHAT YOU SHOULD LEARN FROM THE MAN WHO LOST $600,000 ON FACEBOOK ADS

Raaj Kapur Brar runs a publishing company called Fetopolis. His titles, like Fashion Style Mag, have millions of fans on Facebook. With Facebook working for him, he decided to double down and he launched a massive Facebook ad campaign.

He’d run a couple of tests, and they were showing the potential for 2-3x return on his Facebook ads. After 4 days, he’d spent over $600,000 on Facebook ads.

His return? Close to zero.

His story is a cautionary tale to anyone who thinks that can start up Facebook ads and learn as they go along. That strategy will cost you. You have to understand this ecosystem. If you are dropping significantly bank on such a campaign, then there is no excuse for not knowing the exact details of how they work.

However, if you do it right, Facebook ads can be one of the most profitable ways to market your product or service. Get it wrong, and you could lose big time, just like Raaj.

These are the lessons you can learn from his mistakes, and save yourself $600,000.

YOU DON’T WANT FANS

“We spent over $600,000-plus to get these fans,” Brar said in the article.

Fans?

Taylor Swift has ‘fans’. The Giants have ‘fans’. Dyson has ‘fans’.

Companies have customers. If you are interested in vanity metrics like clicks, likes, or ‘fans’, then you’re going to get a lot of fake clicks.

When you start a Facebook ad campaign the first thing you need to do is decide what your ultimate goal is, and that will determine what type of bidding strategy you use.

There are 3 main types of ad bidding on Facebook: CPM, CPC, and oCPM.

  • CPM (Cost per mille): If you’re looking for simple brand awareness, then this is the one to use. You are paying for impressions, not clicks or click throughs. All it does is promise to show your ad to users. You pay for each 1000 impressions there are. It doesn’t promise to deliver any users to your site or get you any clicks, and is therefore something to stay away from if you are looking for specific results.
  • CPC (Cost per click): I’m guessing this is what Brar ended up paying for. When he used Facebook ads you paid for every single click on your ad. The click could be on the image , like button, name, or comment — not necessarily on the link. This was confusing for newbies, as those clicks could be anywhere and didn’t necessarily lead to conversions. Facebook are nowchanging their definition of a ‘click’ with CPC, to account for what they call ‘link clicks’ which are related to ad objectives: click throughs, call-to-action clicks, installs, or clicks to view video on another site.
  • oCPM (optimized CPM): If you are new (or in fact old) to Facebook advertising this is the strategy you should be using. It is the most common bidding option now, and also the default. What you do is tell Facebook how much you are willing to spend for your desired action, and then Facebook will optimize to try and match that as best it can. The great thing about this is that you can optimize for different actions — website clicks, engagement, reach, likes, or installs. If you want to get people to your site, this is what you should be using, and it is what Brar should have used.

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(Image from Facebook Ads Bidding 101)

DON’T SPEND $600,000

Let’s restate that above sentence one more time: “We spent over $600,000-plus to get these fans.”

Brar spent $600,000 in just 4 days on Facebook ads

Your campaign should never run away with itself like this. Fetopolis doubled down, thinking that they could spend their way out of trouble, instead of doing the smart thing and looking in-depth at their campaign.

You need to know how much you can spend, and keep to that budget. After all, the whole idea of advertising is return on investment. As long as you can earn more from sales or signups than you are spending, the advertising is working, no matter how many clicks or fans you get.

If you use oCPM as we suggest, you are already telling Facebook what your maximum cost should be, so you shouldn’t run into any budgetary issues.

Whatever your budget, start small, getting used to the Facebook ad system, then ramp up, spreading your spend out over more than just a few days.

DRILL DOWN YOUR TARGET

I think this is the main reason people have trouble with Facebook ads. They simply don’t know who they’re targeting so spread their ads too thin, never getting to their ads to the people who want them.

By far the best targeting option right now is Custom Audiences. If you have the information needed available, email lists, phone numbers, user IDs, then you can get exactly the audience you want to attract. With the addition of Lookalike Audiences (people who are like you custom audience), and Audience Insights to better understand their demographics, you can expand your target audience to far more people.

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The people who are losing out with Facebook ads aren’t doing this. At best they are only targeting by interest. This used to work, but is now where a lot of fake likes come from, as they try to make their fake accounts seem more realistic by targeting pages with similar interests to those they are paid to target.

Another targeting option is by country. Obviously if you are selling a product only in the US, advertising it to people in Kathmandu might be a mistake. In addition, some countries are known for harboring ‘click farms’, particularly countries south east Asia. This might have contributed to Brar’s problems with his South Asian Fashion brand.

PEOPLE DON’T LIKE BAD ADS ANYWHERE

They don’t show what a $600,000 ad looks like in the article. I hope it’s really impressive, but somehow doubt it. In fact, I’m guessing a $600,000 ad looks a lot worse than a $6,000 ad, or even a $600 ad.

DESIGN FACEBOOK ADS FOR PERSONAS

Facebook ads need to be designed perfectly to capture attention and get the right type of impressions. Designs that are big, bold, and targeted towards specific buyer personas work.

In this ad AdEspresso is targeting media agencies and their main concern: not wasting their client’s time and money.

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But as they target different buyer personas, they have different ads for different needs. This ad targets startups and their desire to grow their user base.

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Ads with also need good social proof and strong calls to action. This ad for SureInsure has a strong call to action.

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EVERY AD IN ITS RIGHT PLACE

A signifcant issue is also where the ad is served. Newsfeed ads which are served directly into a users newsfeed have the highest click through rate and engagement, and are a great way to drives sales and leads. Plus these can generate additional organic results.

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The right-hand column and mobile newsfeeds have less success. The right-hand column is good for retargeting, and costs less.

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The mobile newsfeed is good for mobile app installs but not so good for website conversions. In this article lambasting Facebook ads, they had most of their traffic from mobile, and then complained it didn’t convert. I could have told them that.

This isn’t to let Facebook off the hook. For a brand that wants to be the world leader in mobile, having such a terrible mobile app platform isn’t good enough. But this is a known issue, and you should know it before you drop $600,000 on ads. If you don’t bother to do you research, don’t come crying to us.

ALWAYS BE TESTING

Brar thought that all he had to do was sign up, upload an ad, and wait for the Facebook floodgates to open, pouring people his way.

The article says: “Many of them are not sophisticated advertisers — they are simply plugging a credit card number into the system and hoping for the best. “ That is true of a lot of first-time Facebook advertisers.

Unfortunately, this is completely the opposite of what you need to do with Facebook ads. There is an ongoing optimization process required for Facebook ads to work. With Google you can set-up your ad, test, fine-tune, and then leave it, bringing in a steady stream. Google is about Demand Fullfillment. You ads are served to people searching for something specific to buy.

But with Facebook, you need to set-up, test, fine-tune, then repeat continually, honing you ad to get exactly the right interest. You need to test the design of your ad — the images, text, headlines — as well as the audience you are targeting. Facebook is about Demand Generation. Your ads will be a served to people who meet specific criteria in your targeting, allowing them to discover your product.

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This might seem like a lot of work, but it is entirely worth it when you consider the audience you have available. It’s complex, but the opportunities are huge.

Testing also includes testing Facebook itself. It might be that Facebook isn’t the best advertising channel for your product. Facebook advertising doesn’t work like AdWords. If you are expecting the same results you are going to be disappointed.

HOW TO NOT LOSE $600,000 ON FACEBOOK ADS

Whenever you read these ‘Facebook ads suck’ posts, stop to think about what each of these people are doing. I guarantee that they will be making at least 1 of the mistakes above, if not all of them.

When you decide to start advertising on Facebook you have to decide what you want to achieve, who your target audience are, and how much you can spend. Then you need to test over and over again, optimizing your advertising to get exactly the conversions you want.

In Max’s post he used data to look at how the metrics of a large campaign are different between Facebook, Google Analytics, and your own server.

He found that for an AdEspresso ad the numbers were pretty much the same. So why does Max’s mileage vary from all the people who complain about Facebook ad?

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He does it right. He is testing and optimizing his ads constantly, tailoring them to get the most value for his money. Facebook ads are difficult to get right, and that is why you see so many complaints. Unlike Google, where you can fire-and-forget, you have to navigate your Facebook ads right onto their target. This might seem like a lot of work, but it’s completely worth the extra effort when you finally see your ads land and start seeing the conversions on your own pages.

Facebook ads come down to this: Create an interesting ad and get it in front of a highly interested audience and you’ll make money on the deal. In fact, this is how all advertising works, whether on Facebook or not.

You can do better with $60 than this guy did with $600,000. By understanding how Facebook ads work, and how to get the most out of them, you can create an ad campaign that targets exactly who you want, and gets real people to your landing page.

And you won’t have spent over half a million dollars doing it.

Looking for a little more assistance? Drop us an Email on info@strategicdesignmarketing.com – We’ve got Social Media Packages starting from as little as just £300 per month.

 

(source – Adexpresso – Author Andrew Tate)

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