May 29 2019
Marketing costs take up a significant portion of a brand’s budget. You can’t make a profit without investing first, right? So, it goes without saying that as a business, you have to be careful which basket you put your eggs in – and where better to start than one of the most effective traffic drivers today: Facebook.
The Mark Zuckerberg-led platform offers a wealth of benefits for advertisers which include effective targeting options, affordable costs, and everything in between. The problem, however, is that Facebook ads can start to eat away your ad-spend faster than you’d imagine, if not optimised correctly.
In today’s article, we discuss further the things you need to know about Facebook ads along with some tips on how you can lower ad cost, without compromising on sales.
The Factors that Determine Your Facebook Ad Costs
First, let’s look at how advertising costs are determined:
Facebook allows you to put an ad on the platform for a fee and this is where the cost per mile (CPM) comes from. The CPM refers to the cost per thousand impressions on an ad. It means you are billed for ad impressions served in every 1,000 units. The amount you pay for the CPM will be based on factors such as your:
- Target Audience
- Optimization Settings
Digital marketing agencies in Singapore tell that one should expect a CPM to range from $5 to $10 and cost per click (CPC) at an average of $1.50. But, it can still go anywhere from $0.75 to $2, with cost per acquisition (CPA) setting you back from $5 to $10. These costs can be quite competitive and well within the reach of SMEs.
As these figures suggest, the CPM can greatly differ, the reason being that it can be influenced by several factors such as the target audience, timing placement, market supply, demand, overall creative quality as well as relevance score.
Having that said, we now look into the ways to optimise your Facebook ad campaigns and lower your ad costs:
1. Evaluate Your Relevance Score
The first order of business is to understand what a Relevance Score is as it directly affects your CPC. In a nutshell, the Relevance Score pertains to the number that determines how relevant an ad is to your target audience. It ranges from 1 to 10 with the score of 1 indicating that your ad is irrelevant and a score of 8 or higher suggesting your ad matches your audience.
Your Relevance Score is based exclusively on expected positive and negative feedback. It means the more positive interactions you expect an ad to receive, the higher your score will be. Here are some points to consider if you’re looking to improve your Relevance Score:
- Be specific with your targeting.
- Consider how your image and message will resonate to your audience
- Always refresh your ads
- Test out different types of ads to the same audience
- Avoid using misleading content
2. Target a Specific Audience
Getting as specific as you can when targeting an audience is one of the keys to the success of your Facebook ad campaign. Narrowing the scope of your campaign allows you to identify who exactly you’re targeting and as a result, you can create special offers that your audience is more likely to be interested in.
In the same manner, reducing your target audience also allows you to lower the competition from other brands that target the same demographics. It will not only help you trim down your advertising costs but also let you bid only on people you really want to reach.
3. Increase Your CTR
In order to lower your CPC, you should consequently focus on increasing your click-through-rate. It’s one way to increase your Relevance Score since Facebook will notice that your audience is responding to your offer. Below are some practical tips to increase your CTR:
- Create catchy headlines in your ads. Because it’s the first thing that users notice, you’ll be surprised to discover how a direct and compelling ad copy is so effective.
- Use high-quality images of your product with bright and contrasting colours to make it a standout in the News Feed.
- Use the right call-to-action (CTA). Selecting a CTA that correlates with what action you want your viewers to do can improve your CTR to as much as 80%.
4. Avoid Audience Overlap
When running multiple ad campaigns you are likely to encounter an overlapping audience issue wherein you promote different ad sets to the same audience. In the process, you are at risk of compromising your ad’s performance.
Besides narrowing your target audience, a way to avoid this is to use the Facebook Audience Overlap tool which allows you to check if your audiences are overlapping – and if they are, you have the option to exclude them to avoid competing against yourself.
5. Reuse Successful Strategies from Posts with High Engagements
After running a number of ads, you should scan the results to determine the posts with the highest engagement rates and identify their similarities. Find out what’s working and do more of that while consequently eliminating the tactics that yield low engagement.
As you progress, keep on experimenting with your content and work to maintain or surpass your current engagement rates.
Keep in mind that your goal is to increase your engagement rate while keeping your content relevant to your audience – and having these tips in your arsenal, you’ll know the ways on how to stretch your advertising budget. Start practising these tips and see how much your Facebook Ad costs will change in the future.
For more tips and marketing strategies, our experts at OOm, a trusted digital agency in Singapore will be happy to talk to you.