Testing, tracking and tweaking
Being able to test on small budgets and then tweak is why Facebook advertising especially is worth taking a look at. When I run Facebook campaigns I test with a £3 – £10 a day budget, then work out how much each new customer, or download, or contact form submission has cost me. For example, imagine I’m selling a vegan product and I have set up a target audience based on the people who are most likely to be interested. This is based on my customer research and includes their age, that they are vegan and what their interests are. Once I have set it running, this advert will show the product I am marketing and appear in the Facebook newsfeed of the types of people I’ve targeted as they are scrolling down the page. Clicking on the advert will take them to my product’s page on my e-commerce website.
If I set a £10 budget and get 22 people clicking on the advert, then I know it’s costing me 45p per person I’m sending to my website. This only gives you half the story though, because I need to know if those people actually go on to spend money with me. Facebook, even with everyone’s opinion of them, do actually go out of their way to protect their user’s privacy. Although I can target people in very explicit detail, Facebook will never tell me who those individual people actually are. However, I can put a Facebook ‘tracking pixel’ on my website (which is just a few lines of code that tells Facebook what someone does after it has sent them to your website – and is easier to set up than it sounds!) which means that Facebook can tell if any of the users bought something. From this I might be able to see that of the 22 people who clicked on my Facebook advert, 3 people then went on to buy, so in this example it would have cost me £3.33 per sale / new customer.
If my product is £150 then I’ve found a campaign that really works, so I’ll up the budget to £30 a day and see if it gives the same results (eg: for £30 do I then get 9 new customers?). If it does, I know I’ve hit a rich seam and will put as much money into the campaign as possible for as long as it’s delivering the same results.
If, however, your product only costs £10, then spending a third of that on finding a new customer is unlikely to work. This is why it’s important to know your numbers with all online advertising. If it’s not giving you a good return, pause the advert, try changing your targeting (people living in a different area for example), try to change your product page on your website (give people more confidence to click the buy button), or try changing your advert (to make it more relevant to the people you are targeting) and then run it again. Just don’t try changing all these things in one go or you won’t know which one worked; change one thing at once and track what effect it has. You might be able to reduce it so that each new sale is costing you £1.50 instead of £3.33, and once you do then put everything you can into the budget for as long as it’s giving you those results.
Or alternately, just put your prices up. If you have proven that, even after all the tweaks and testing possible that it’s going to cost you £3.50 per sale from Facebook advertising then accept that as the cost of creating a new customer and work it into your pricing. You should also know, on average, how much a new customer spends over their lifetime with you. It might be that the initial sale is only worth £10 but over a year that new customer will likely spend £100 with you. In which case that £3.33 for a new customer is looking more attractive.
You need to constantly monitor your results when you are spending on digital advertising. If you have used budgets that are not going to make any dint in your company’s bank account, then you can check once a week or even once a month. In contrast, if you are spending money that really has an impact on your business if it doesn’t deliver then you need to be checking it daily. Campaign results fluctuate, and that £1.50 a customer can creep up in just a number of days. Fortunately, if you learn how to use your advertiser’s dashboard well, and are using the in-built tracking pixels, then you will see all this data live. If you are targeting quite small, niche audiences, sometimes you get a great result initially because those most likely to buy click on the advert first, but over time the audience bottoms out and each sale starts costing more to generate.
If you are not selling a product on your website then it can be harder to track your ‘return on investment’ from social advertising (ie – how much you are paying on advertising compared to how much business you win from it). But you can still track how many people you capture. For example, you can use a tracking pixel to message you if people have sent you a message through your contact form or downloaded some information from your website (by placing the pixel on a thank you page that someone sees after taking each action). In this situation, you can see how much you are spending for every new customer contact to help you judge if it is worth it.
