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7 Questions to Ask Yourself if Facebook Ads are Right for Your Business

Facebook Ads - Are They Right for Your Business?

Yes, Facebook is a big deal.

You use it. Your kids use it. And to your chagrin, your Mom and Grandmother are on “the Facebook” now too. With almost 900 million (yes, that is MILLION…Dr. Evil) users, you also know that a significant number of your potential customers are also using Facebook.

And despite the recent IPO concerns, plummeting stock prices, and GM publicly stating that Facebook Ads don’t work, I’m here to tell you that yes they do indeed work, and that there are countless businesses out there that are profiting from their Facebook ads.

In fact, with the recent IPO, Facebook now has an even greater need to maximize revenues and will certainly be focusing more and more on their paid advertisements. This should lead to better integration, better management tools and increased visibility for your ads.

This is also why if you are not using Facebook Advertising as part of your overall digital marketing strategy, you need to seriously consider it.

In fact, if you can answer any one of the following questions with a definitive “Yes”, then you NEED to seriously think about starting a Facebook Advertising campaign right now.

Question 1: Does your product or service cater to a specific interest?

Speaking hypothetically, let’s say you sell a really awesome workout thingy-ma-bob. And not just any thingy-ma-bob, but one specially designed to be used when doing Yoga. Or heck, maybe you’re selling a really cool canine whatchamacallit designed for man’s best friend. Or you’ve designed a super cute, fuzzy and cuddly doo-dad designed for toddlers.

Whatever that product happens to be, let’s say it appeals to a very select interest group.

Going back to that Yoga workout thingy-ma-bob, what if you could specifically target Yoga fanatics and get your product in front of those people who publicly sing the praises of downward dog?

Guess what? You can.

So if your thingy-ma-bob for Yoga is really a cool new product, imagine what would happen if you could put advertisements for your product in front of these potential customers at an average cost per click that would most likely fall below what you would pay using Google Adwords.

2.2 million - that's a lot of people who "like" Yoga

Yeah, it’s kind of difficult to not at least give it a try, isn’t it?

So your new Yoga thingy-ma-bob; just in the United States alone there are 2,227,220 people who have indicated that they like Yoga on Facebook.

That’s a lot of potential new customers, Yogi.

So what if your Yoga product is designed specifically for women. Not a problem. You can specifically target just women, which still gives you an audience of over 1.7 million people.

1.7 million women like Yoga on Facebook

As an added benefit, those who are passionate about Yoga, and purchase your product, will also be more likely to “like” your Facebook page (which is why it is important to encourage likes at the end of the sales cycle after the purchase on your thank you page).

This means, your sponsored story ads will be more effective because if “Mary” sees your sponsored story ad that says her good friend “Angie” already likes your your brand, and “Mary” knows that “Angie” is big into Yoga and really knows her stuff, then “Mary” is more likely to also buy your product.

And if you know people who love Yoga (its hard not to here in Portland), you also know that a sizable percentage of their Facebook friends also share their passion for Yoga.

So if you do sell a product that is designed for or caters to a specific interest group, then getting your product in front of them on Facebook might be one of the most effective ways to promote your specialty product online.

Question 2: Does your product or service cater to a specific demographic?

The Senior Audience

OK, maybe you don’t sell a really cool Yoga thingy-ma-bob. That’s ok. Maybe you don’t sell something that appeals to a specific set of interests. That’s ok too. Because maybe you do sell a product or service designed for a very specific demographic.

The old folks who are still looking for some love...

Let’s say you sell a product designed for older people. Maybe it is reading glasses, or a retirement lifestyle magazine. Or even better, you could be running a senior citizen dating site (they are out there; to the amusement of my wife, I somehow got on their email list).

Whatever it is you are selling, if your product or service appeals to a very specific demographic, then you need to seriously consider Facebook advertising.

Targeting the mature adult audience, there are currently over 30 million Facebook users in the United States over the age of 55. Now if you are that Senior Citizen dating site, you could target the 2.7 million of them who are currently single.

Drilling down even further, why not set up an ad campaign specifically to those 55 or older, who live in the United States, who are single, and who have indicated they “like” love, romance, speed dating, flirting, kissing, online dating services, intimate relationships, physical intimacy, casual sex, courtship and or widows?

There just happens to be 201,900 people who fit this description. And it would be a safe bet that a few would be interested in some hot senior citizen online dating action.

Question 3: Does your product or service appeal to a specific location?

Sports & Adult Beverage Audience

Ok, I get it.

Maybe you are not the next great inventor.

You don’t have a thingy-ma-bob to sell and you aren’t running the geriatric love connection website.

However you are the proud owner of a new sports bar in downtown Minneapolis and you want to get the word out about your glitzy new location.

Not a problem.

Using Facebook’s targeting, you would first want to select those who live in Minneapolis along with those in cities within 10 miles.

Next, since you are a sports bar, you would want to limit this to an audience that is 21 and older.

Draft Party Audience

You would then want to target your ads to those who have an interest in Sports along with an interest in Beer / Wine / Spirits.

Not bad. Your ad will now be seen by over 234,000 people who are 21 and over, in Minneapolis, who like sports and who also like to enjoy an adult beverages.

Taking this scenario even farther, let’s say that the NFL draft is coming up and you are hosting a big draft party and you want to get the word out. Taking the same group of 21 and over from Minneapolis who like to drink, we can fine tune our targeting even farther specifically to those who like football, especially those who are Minnesota Vikings fans.

Yeah, that’s 117,180 people.

Needless to say, even if only 0.1% of those targeted clicked on your ad and decided to come to your NFL draft party, that’s 117 new customers you’ve generated through Facebook, and ensures a great turnout for your new found sports bar.

So make sure you’ve got plenty of chicken wings and beer on tap…because you’ve now got yourself a draft to get ready for.

Question 4: Does your product or service appeal to a specific interest, as well as a specific gender, demographic and location?

Ok, we are really going “micro” with this one. You don’t sell a Yoga thingy-ma-bob, you are not pimping senior citizens online and you don’t own a new sports bar in Minneapolis.

But you do sell a very cool designer bicycle seat for younger “hip” women out of your Portland, Oregon bike store and you want to get the word out.

There are several ways people show their love for bicycling...

PDX Women who Like to Bike

Doing some quick interest research on Facebook, we see that there are 14,700 women between the ages of 18 and 40, in Portland, Oregon who love bicycling.

But just because your product is designed for women, why stop there?

Let’s say Christmas is coming up. Why not take the same interest group, but switch it from women to men between the ages of 18 and 50, who are either in a relationship, engaged or married in Portland, and then craft a unique ad to them. Chances are if they are interested in biking, then their girlfriend, fiance or spouse is too.

And men are always looking for that hip new designer gift that would be perfect for their significant other. And in Portland, you have over 10,000 people who fit that description.

Question 5: Do you know how much a valuable lead should cost your business? Do you know the lifetime value of a new customer, your conversion rates and your desired cost per sale / lead?

What if I told you that for $5,000 I could send roughly 5,000 visitors to your website in the next month and that each visitor would have some level of interest in your product or service?

Would you jump at this deal? Do you know if this would be a worthwhile investment? Or would you have no idea if it would be worth it?

Unfortunately, most online business owners don’t know the answer. That’s because they don’t understand their numbers.

But what if you do know your numbers?

Let’s say that your website is currently converting 5% of its traffic into actual sales. And that the average profit you see on each sale is $50 with the average lifetime value of each new customer being $75 (because half of them come back and make another purchase on your website).

Well, if you do know this, then you would also know that out of those 5,000 visitors, you could expect roughly 5% of them to make a purchase. That’s 250 new customers you just bought for $5,000, at $20 per customer.

You would also know that those 250 new customers would bring in an average profit of $50 each. That equals $12,500. And the total value of these new customers for your business is $18,750, as half of them will return to buy again.

Knowing these numbers, you would understand that purchasing 5,000 visitors at roughly $1 each would be a sound marketing investment and would provide you with an excellent ROI. Even if your site converted only 4%, you would still double that $5,000 investment, with 200 new customers initially bringing in $10,000 in sales.

So if you do know your numbers, what is stopping you from testing out a Facebook advertising campaign?

Question 6: Are you currently running a successful Paid Search campaign through Google AdWords or Microsoft AdCenter?

Already using Adwords?

Once again, if you answer yes, then it is probably in your best interest to expand your efforts to Facebook advertising.

Granted paying for visitors who are actively searching for your product or service online is different from getting clicks from visitors who saw your ad on Facebook and who decided to click on it and check out what you’re offering. Often Facebook ad visitors are higher up in the sales funnel, as they were not actively looking for your product or service online.

But at the same time, they did just click on your ad, and interrupted their current Facebook session. So instead of reading their friends mindless, never-ending status updates, they are instead learning more about your product.

This demonstrates a strong interest.

Having success with this?

The fact is we frequently see Facebook ads convert just as well, and in some cases even better than traditional Paid Search campaigns. And while some products and services (especially Business to Business) traditionally do better in Adwords or even LinkedIn, we have seen others (business to consumer) just kill it in Facebook.

But back to the question at hand…are you running a successful Paid Search campaign?

If the answer is yes, then we are going to assume that you have already created good landing pages, are utilizing Conversion Rate Optimization techniques and have fine-tuned the user experience to encourage sales.

The infrastructure is set up already. You already know it works well with your Paid Search traffic. You are tracking your sales / leads and know what themes and ad groups work best. It’s a well-oiled sales / lead generation machine.

So why not leverage it into something more?

Set up a campaign on Facebook. Start small. Send the traffic to your top performing landing pages. Track your results. More times than not you will find Facebook Ads will produce at a similar rate as a Paid Search campaign, while also driving traffic at an average pay per click cost below what you are paying Google Adwords.

So what are you waiting for?

Question 7: Are you currently running a successful campaign through the Google Display Network?

Google's Display Network

Ok, this one really is a no brainer.

If you are seeing success through one Display Network, why not try to replicate this success using another display network? Especially one that reaches 51% of all internet users and generates more impressions for your ads then Google’s Display Network, and allows you to target your audience by interests, education level, location, age, workplace and likes.

Granted, Facebook’s current ad format is limited when compared to the different options in Google’s Display Network ads. However, we believe this will change over time as more emphasis is put on their advertising platform and generating revenue for the company.

Answering “Yes” doesn’t guarantee success…

So you’ve answered yes to one of the above questions and you are ready to make mountains of money for your company thorough Facebook Ads.

Not so fast, sweetheart.

A successful campaign goes beyond finding your target audience. This is a display network, which means you need great images that stand out. You also need to write headlines that grab attention and body text that clearly conveys your message.

You also need to test different images and ad copy to see what resonates with your audience, and you also need to change these ads up regularly to combat ad fatigue.

In addition, having landing pages that incorporate Conversion Rate Optimization techniques is also an important way to increase conversions and success. Plus you need to be tracking these conversions through analytics in order to determine what is working and what is not.

Daunting? It can be.

Time consuming? Yes, but isn’t anything worthwhile?

Start slow, try it out and get a feel for what it takes to create successful campaign.

And if you need help there are many excellent digital marketing agencies that have extremely talented staff who are experienced in doing this and can help you each step along the way.

If you have any questions regarding Facebook advertising and if it might be a good fit for your business, feel free to give us a call and we would be more than happy to answer any questions you might have and steer you in the right direction.

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Reader Comments

  • Greg Smith | June 12, 2012

    These questions were written rather vague; like are you currently in planet earth? Ok then, are you breathing? If yes, then do you operate a business? Do you want customers? Have you wasted money with other ad campaigns? Then, why not waste some with us? There’s guarantee of success, but who knows it might work.

    • Chris | June 12, 2012

      Greg, thank you for your comment and for taking the time to read my post.

      Yes, these questions are somewhat vague as the intent was to show the reader different ways you can target your audience on Facebook, while providing some hypothetical examples of how it might work.

      With any advertising endeavor there is no guarantee of success. This is why testing and analytics are so important for digital marketers. However, if you were able to answer any of the questions with a resounding “Yes”, then it might be worthwhile testing an ad campaign with Facebook.

      When it comes down to it, no Facebook is not right for every company. You really need to have a product or service others are interested in. You need to have the right message, pricing and branding. If these factors are in place then yes you have a chance to succeed online.

      As a digital marketing agency we are not looking to sign up clients so they can “waste” money on ad campaigns. We look to drive leads and sales at costs that make sense for our clients. So far, we have an excellent track record of success.

      If you have any additional questions, give us a call. While we don’t work with international customers at this time, I’d be happy to learn more about your business and help you determine if a Facebook campaign would be right for your company.

  • 7 Reasons Why Facebook Advertising is Right For Direct Response Marketers « Infomercial Producer Blog – DRTV Advertising News and Views | June 26, 2012

    […] 7 Questions to Determine if Facebook Ads are Right for Your Business […]

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