If you’re using Facebook ads for lead generation or ecommerce, congratulations. You’re ahead of most people!
And if you’re getting leads or sales, double congratulations!
But now the question is how can you lower the cost per lead or cost per sale? This video, featuring my work for Promo Rock Stars, shows one often overlooked technique.
The first part of the answer is to test a ton of ads:
- Create more ad variations (different images, headline, body copy).
- Check daily to see what each ad’s cost per lead or cost per sale is. From here on out, I’ll call both of those cost per conversion. That number can change a lot while you’re getting an ad’s first few conversions. If you only have one conversion from an ad, the cost per conversion number may be wrong. You can’t assume that number is right. That would be like assuming that a kid who hit a home run on his first pitch ever would ALWAYS hit a home run. The more conversions an ad gives you, the more you can trust that number. In academic terms, this is the concept of of statistical confidence.
- Pause the ads that have high conversion costs. You’ll get a sense of what’s too high or low below.
You may notice that testing can be expensive and slow. You need to know how to save money on tests and speed up the process.
(The lower your daily budget is, the more time it takes to test a lot of ads. You don’t want to create too many ads. But figuring out how many you can create within your budget is a whole nother topic!)
One source of wasted money and time is running specific ads longer than you need to. This video shows you a way to know when you can pause “losing ads” sooner than a lot of people would.
To succeed, you need a target value for your cost per lead or cost per sale. Your goal for that number will change as you get better and better results:
- Look at a set of converting ads with enough data: Look at the ads that have converted. Now, ignore any ads that haven’t converted at least five times. If you don’t have four or five, keep creating new ads until you get enough.
- Average: Using those ads with four or five conversions, average their cost per conversion. This average number is your target value.
- Improve results: Look at the ads that converted vs. didn’t. What does each group have in common? This could be certain images, targeting, body copy, or mobile vs. desktop. Create new ads that are more like the converting ones. Veer away from what didn’t work.
- Lower cost: Look at the ads that are less expensive vs. the more expensive ones. What does each group have in common? Create new ads that are more like the affordable ones.
Now, if you want to save more money, start pausing ads on the basis of impressions. That’s what the video is about:
- Look at the ads that have converted at least five times.
- Figure out how many impressions you need to convert. Divide the conversions by the impressions. This is in the video.
- Pause any ads that have more than that many impressions but haven’t converted yet.
You can also pause non-converting ads on the basis of spend:
- Start with your target cost per conversion.
- Pause ads that have spent more than that but haven’t converted
Got it? Ok, go run those ads lean!