It’s a no-brainer. With more than 2 billion active monthly users, Facebook is now the most dominant social network in the world. In recent years Facebook has also transformed into a thriving online marketplace through which contemporary startups can market their products/services and recruit new paying customers.
In fact, more than 5 million businesses now use Facebook advertising on a monthly basis. With 90%+ of all Facebook users accessing the network via mobile devices, mobile app companies are especially well situated to benefit from the lucrative opportunities associated with Facebook marketing.
In this article I’ll explain how advertising on Facebook works and detail a number of key strategies for optimizing your Facebook ads.
Why Use Paid Facebook Advertising?
Before discussing how you can use Facebook’s advertising platform to market your startup’s products/services and convert Facebook users into paying customers, it’s important to first outline the various reasons why you should incorporate Facebook advertisements into your company’s core marketing strategy.
Here are 11 reasons why tech startups in general and digital app companies in particular should use Facebook marketing to drive more traffic to their products/services and boost their sales:
- Facebook is an absolutely massive online platform: 32 billion people use Facebook daily (as of June 2017).
- Facebook’s size is growing dramatically: the social media network is growing its user base at a rate of 17% year after year.
- Facebook users are spending more and more time on the network: in 2016 the average Facebook user spent more than 50 minutes per day on the social network and its sister network Instagram—this is up from 40 minutes per day less than 2 years earlier.
- Facebook has a gigantic share of the mobile space: for every 5 minutes that a U.S. smartphone user spends online, 1 minute is spent surfing Facebook or its sister company Instagram.
- More and more people are accessing Facebook via mobile devices: as of late 2016, there were 74 billion active mobile users, which represents a 21% increase year-over-year.
- Demographically, Facebook users are very attractive to mobile app companies: the most common demographic on Facebook is 25-34 year-olds, which is the same age group in the U.S. whose members use mobile apps most heavily on a per-month basis.
- Facebook collects an enormous amount of data about its users: Facebook is getting closer and close to tracking and documenting virtually everything its users do on its platform and on websites connected to its platform (e.g., via “Like” buttons hosted on personal webpages) (sources: 1, 2, 3). Because Facebook knows how its users behave and what they want to an ever-increasing degree, businesses can benefit from targeting users according to very specific attributes, which brings us to the next point.
- Facebook’s ads can be targeted in incredibly sophisticated ways: I’ll discuss this matter in greater detail below but suffice it to say that businesses can market very specific ads to very specific audiences in very specific ways via Facebook’s paid marketing tools.
- Facebook continues to introduce new tools designed to help small(er) businesses create successful ad campaigns: although many of the world’s biggest companies use Facebook marketing, a significant percentage of the 65 million businesses on Facebook are SMBs (i.e., small- and medium-sized businesses). Facebook knows this, which is why it continues to create new tools designed to help new businesses and startups grow via its advertising campaigns—see here and here.
- Facebook is investing heavily in video-based content: video is becoming an increasingly common and highly effective way to connect with potential customers in order to introduce them to your products/services, and Facebook is taking action to explicitly respond to this ongoing development.
- Facebook’s organic reach is virtually dead: by February 2014, only 2% of Facebook users were seeing organic content published by brand pages with more than 500,000 likes. For all intents and purposes, therefore, Facebook is now a “pay-to-play” marketplace (see here: 1, 2, 3). Blasting out content to your users on your business page will get you very little, if any, engagement; you must purchase ads if you wish to exploit Facebook’s potential to the fullest.
A Word of Caution
Purchasing ads is an expensive endeavour, especially if such marketing efforts are not designed with foresight and executed with intelligence.
In order to avoid wasting lots of precious time and money, it’s absolutely essential that your app is ready to be used by the very Facebook users you intend to target via your ads.
Even the most effective ad campaign in the world won’t do your company any good if your users download a buggy or boring app that’s difficult or uninspiring to use.
Here’s a list of some of the most important tasks you must accomplish before dedicating precious resources to running costly Facebook advertisements:
- Define and investigate the specific monetizable customer pain to which your business will provide a solution;
- Determine the size and unique demand(s) of your market niche;
- Test and validate your product idea;
- Build a minimum viable product (MVP);
- Develop a solid understanding of the ins/outs of equity and of the key financial metrics that you must regularly measure;
- Research and implement one or more primary monetization strategies; and
- Institute a solid app onboarding experience that ensures high customer retention rates.
With these preliminaries out of the way, let’s now examine the essential steps involved in designing and implementing a Facebook ad in 2017.
Key Elements of a Facebook Ad
Facebook describes its advertisement program in the following basic terms:
“Facebook ads are paid messages from businesses that are written in their [own] voice[s] and help reach the people who matter most to them. Advertisers create campaigns that have specific goals, which we call advertising objectives, and they create ads within those campaigns to help them reach those objectives”.
There are 3 essential components to Facebook’s paid marketing approach, which the company calls a “campaign structure”:
- The campaign: the foundation of the ad insofar as this is where you explicitly define the objective or goal for your ad (more on this below);
- The ad set: this is where you define your target audience, create a budget for your ad, set a schedule for its runtime, and select where on Facebook the ad will be physically placed; and
- The ad: this is the final “product” that your targeted users will see, i.e., it’s the visual combination of text, images, videos, and/or call-to-action (CTA) buttons that will appear on other people’s Facebook screens (source).
Regarding the campaign, Facebook allows you to choose from a long list of ad objectives, including boosting your posts, increasing conversions on your website, sending people to an external webpage, and getting users to install your app:
Concerning the ad set, Facebook makes it possible to target users based on an impressively large and highly specific set of variables.
Amongst other attributes, it’s possible to selectively target your ad based on a user’s:
- Education level;
- Field of study;
- Ethnic affinity;
- Income and net worth;
- Home ownership and type;
- Travels away from family or hometown;
- Relationship status (type, distance, length, etc.);
- Job; and
- Political views.
Facebook offers 3 different ad placement options:
Thus, on the desktop version of Facebook, you can place your ad directly into a user’s main News Feed or off to the right side close to where the Trending stories can be found.
On the mobile version, your ad appears front-and-centre on a user’s phone or tablet.
For our purposes, it’s sufficient to point out the following:
- Facebook uses an auction system in order to determine which ads are shown to which people.
- This system aims to fairly determine what Facebook calls “the ad that creates the most total value”.
- Total value is based on 3 factors: 1) the advertiser’s bid, i.e., the amount of money that the advertiser is willing to pay for the ad (selected in accordance with either a daily or a lifetime budget); 2) estimate action rates, i.e., Facebook’s assessment of the likelihood that a given person will take the specific action that the advertiser hopes to produce (e.g., install an app); and 3) the ad’s quality and relevance, i.e., “how interested [Facebook] think[s] a person will be in seeing [an] ad”, based on factors like the individual’s previous engagement with similar ads as well as the current ad’s (positive or negative) feedback (source).
Facebook explicitly instructs businesses buying ads that:
“[In order] to get the most out of advertising on Facebook, you should strive to maximize all  factors—bid at least your true value for the result your ad set is optimized for, create compelling ads and target them to the right audience”.
Facebook’s multi-product ads can be particularly useful for e-commerce advertisers interested in setting up app installs and/or implementing re-engagement ads.
You can also structure your ad type choice based on whether, for instance, you seek to generate leads, invite users to a meetup, or get people to claim a special offer.
Ultimately, your specific objectives will determine the suitability of each of the different forms of Facebook ads.
An example of a finished Facebook ad and its various core elements:
7 Strategies to Create A Winning Facebook Ad
Here are 7 key strategies you can use to help you create engaging Facebook ads that convert users into paying customers, thus producing excellent return on investments (ROIs).
1. Target the Right Audience
It’s crucial that you design and implement your ads with the explicit intention of targeting specific kinds of Facebook users.
Advertisements are most effective when they’re setup to convince very particular people (i.e., those most likely to buy, keep using, and help popularize your product/service) to do very specific things (i.e., follow-through on your CTA).
(If you need a refresher on the main differences between “total available market” (TAM), “serviceable available market” (SAM), and “target market” (TM) then see our recent article here.)
You must, therefore, ask yourself: “Who do I want to target with this particular ad and why?”
One concrete way to help you answer this question is to create user personas.
User personas are constructs of your ideal customers, i.e., those most likely to purchase and use your app.
They are meant to function as highly detailed representations of your (different kinds of) potential customers’ needs, interests, experiences, and goals.
When constructing your user personas, dynamics to consider include demographics such as gender, age, location, workplace, and financial earnings as well as other characteristics such as type of mobile device and operating system used, previous purchase history, and so on (sources: 1, 2).
Don’t be shy about building your user personas by (ethically and legally) extracting information from your competitors’ customers.
One really useful feature of Facebook’s marketing system is the ability to target users based on interests.
For instance, Facebook allows you to target users according to:
- What they share on their timelines;
- Which apps they use;
- Which ads they click;
- The Facebook pages with which they engage; and
- Their travel preferences.
Facebook makes it possible to focus ads in very specific ways, such as via the use of “and” operators (e.g., people who are vegetarians and homeowners and parents).
See here for a complete explanation of Facebook’s “detailed targeting” platform.
2. Use “Custom Audiences” and “Lookalike Audiences”
As an extension of the just-described first strategy, you should take full advantage of Facebook’s powerful Custom Audiences and Lookalike Audiences features.
Facebook’s “Core Audiences” comprise manually selected users, i.e., users that you individually select based on your preferred characterizes (e.g., demographics, interests, and behaviours).
“Custom Audiences” are “built from customer data you already have on hand—or can easily get—making it easy to reconnect with the people who have already shown interest in your business”.
Specifically, Custom Audiences allow you to upload contact information for your current users and potential customers—including people who use your app, visit your website, or belong to a pre-existing contact list—and then target these people with your ads.
This tool, then, is designed to allow you to target people with whom you’re already somewhat familiar—typically those who appear on your ever-growing email (and phone numbers) list(s).
One use of this tactic would be to offer all your current users a discount on their next purchase if they successfully convince x number of friends or family members to sign up for your product/service (or email newsletter).
Finally, “Lookalike Audiences” help you to “find people on Facebook who are similar to your [existing] customers or contacts”.
Specifically, this feature works by providing Facebook with relevant data (including users personas) regarding those already using your app and then having Facebook automatically generate results for similar users who are likely to also be interested in your business.
For instance, if one of your most popular user types is 25-34 year-old-males who work in the technology sector, earn at least $60,000 per year, and live in the state of California then you could use these data to let Facebook find other users with these same characteristics whom you can then target with your ads.
3. Capitalize on Clarity and Simplicity
Your Facebook ad must be as clear and simple as possible whilst remaining effective and enticing to your target audience(s).
Confusion, complexity, obscurity, and imprecision: these are the exact characteristics that you must avoid at all costs.
Effective ads are extremely easy to understand and respond to: they offer a very clear value proposition (this is what we offer and here’s why you should care) and a straightforward CTA (install our app now) (see here).
Data suggest that short headlines (around 4 words) and concise link descriptions (around 15 words) are best.
4. Use Social Proof
Research shows that people respond very favourably to ads that explicitly contain recommendations/endorsements from others, either in the form of direct testimonials or quantitative statistics.
Indeed, Nielsen figures suggest that 83% of consumers in 60 countries prefer social recommendations to all other forms of advertising.
Incorporating social proof into your Facebook ads can be done in a number of ways, including indicating how many people use your app (e.g., “15,000 happy customers and counting!”) and providing a brief testimonial from an influencer in your niche (e.g., “Neil Patel says this is the future of B2C marketing!”).
5. Be Creative and Commit to High Quality
Make your ads as professional looking as possible:
- Use high-quality images and videos that are free of ugly pixels, overused stock photos, shaky cameras, poor audio, etc.;
- Use bright, high contrast, engaging colours; photos of happy people (and/or animals) doing enjoyable things; and pictures and videos that follow proper composition guidelines (such as the Rule of Thirds technique).
6. Always Include a CTA
To make this important point one final time, it’s absolutely essential that your ad contains a clear, direct, and easy-to-follow CTA.
Remember, the entire objective of creating an ad is to convince those who see it to do something, to take a given action, whether that’s click a button, download a piece of software, sign up for an email newsletter, or make a purchase.
Don’t make your CTA an after-thought: explicitly decide and plan out what you want the result of your ad to be in terms of what happens when somebody comes across your ad.
7. Test, Re-Test, and Optimize
As with many other aspects of building a successful startup, advertising is not something that you are likely to nail with your very first attempt.
It’s almost certain that you will need to proceed through several iteration cycles in order to create a Facebook ad with a maximal ROI.
In other words, it’s crucial that you design, test, re-test, and optimize your ad by figuring out what works best, for whom, and under which circumstances.
Facebook makes it possible to run multiple iterations of advertisements at the same time, thus allowing you to engage in A/B split testing.
Preparing yourself for the real possibility that it might take several trial-and-error attempts to create a winning Facebook ad will help you to develop the right mindset, patience, and budget to succeed in this marketing space.
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