Why the window is about to close on Facebook as the direct response darling of the decade.
Way back in the bad old days of media buying and selling (actually in pretty much all buying and selling) “you get what you pay for” was trotted out by salesmen as if it was an unescapable truism.
Except it mostly wasn’t true.
We’ve all been strung up by deals with slick salesmen which turned out to not be worth the paper they were written on, with no comeback or sympathy.
“We just send the traffic” they’d say.
“It’s up to you to convert it”
The price of media was mostly based on the ability of the media buyer to hire good sales teams who could get the best price for the space they had to offer.
But this world is slowly sliding away.
The online media duoploly of Google and Facebook has turned media into a world of auctions, of machine optimised campaigns, and has done for some years now.
Adwords started it, and Google are gradually pushing the advertising prices in every industry to as close to breakeven as they can get without actually sending all their clients out of business.
Facebook is driven by the same game too, and now the nonsense of buying “Likes” is becoming clear to the old school brand advertisers, worshipping at the dusty alar of “awareness”, the dull stats-driven direct response types are making bank again.
Lets take a moment to look at the options available for FB advertisers:
[screenshot of campaign options]
Engagement, leads and sales are the new virtues, and the greatest of these is sales.
Our challenge as marketers is to know where to find these sales.
In the last few months I’ve crossed swords with more than half a dozen Facebook advertising “experts” who have been patting themselves on the back about driving click and lead costs down for their clients, with no visibility of the effect that has on sales.
As the “conversion guy” on the team, I’m kind of obsessive about optimising for the right metrics, no matter how hard that might be in reality.
Lets take a few facts into consideration:
1) 95% of people in anly online market are just never going to spend money with you.
No fault of yours, maybe they don’t like yor suit, maybe they’re too poor to own their own computer, maybe they’re too young for a credit card.
There are all sorts of reasons. Some you can overcome, some you can’t but the fact is there are a lot more people who will show an interest in your free content, than people who will part with cash for the eventual product.
2) Facebook, knows exactly who the 5% are.
They have enough purchase data from campaigns by now to have a pretty good model for what makes a buyer in any scaleable market where transactions can be seen online.
They also know who the rabid clickers, and the lead magnet junkies are.
More so even than Google, Facebook has data on permanently logged in users on almost every device, and very few instances of people operating a “split personality” – running multiple accounts to keep work and home life apart.
Clicking an ad on your phone at work, then buying when you get home?
No bother.
If you pick any of these metrics to base your campaign on, Facebook will give them to you, in spades.
So who are the ones you would pay most for?
The buyers of course.
And so would anyone else.
Let me walk you through a client campaign I’ve been running recently. It’s for a training product for a career development course costing just under the £500 mark.
We have a number of audiences we can target…
Previous buyers
“Lookalikes” of our previous buyers
“Fans” of our Facebook Page
Subscribers on our email list
People who have watched a significant portion of our videos
People who have visited our website
People we have guessed look like our audience based on Facebook’s available options (people who like competitors or have an interest in our broad subject area)
Now there’s no point targeting people who have already bought the product, so that’s where our “lookalikes” come into play.
Facebook creates audiences of people who have the same characteristics as our buyers, fans, site visitors or video viewers, and allows us to target many more people than our “known” audience, the people who have actually had contact with us.
And look at the cost of the buyer lookalikes – almost 3x the cost of the “fans” and email subscribers.
But how much more are they worth?
8X
Lets look at our returns on each group.
[numbers]
That means for every £1 we spend, we make more than ####X the rate the cheapest clicks are earning us, and ####X the rate the cheapest leads (email list signups) are earning.
So despite the high cost, these are significantly higher worth leads than any of the other groups.
If you are optimising for likes, clicks, leads or any other metric other than sales, you are leaving a LOT of money on the table.
So, your long term strategy is not to get the cheapest leads.
Just like a strategy of providing the cheapest product that’s a sure fire race to the bottom.
What you need to develop is a product range that allows you to afford the most expensive leads.
And this is how the shift happens, from tiny niche businesses with strong personalities and high conversions, to large businesses with the cashflow to support loss-leaders.
The good news is that now is the perfect window to start building out that ecossytem of products. Facebook now has the critical mass of data to give you fantastically optimised campaigns in any scaleable market, and yet the big brands are still struggling to make the switch out of “awareness” based campaigns.
Most are still reeling form the shock that the investment they made in building up fan pages is swiftly going down the drain as groups and live video get the viewers attention instead.
But they’ll catch up.
Their TV history means they will master video at a far faster pace than most smaller businesses and those engagement metrics will give them the leg up they need.
They already have the broad product ranges to hit way more of the market, from discount shoppers to premium buyers.
And they have more than one thing to sell each customer, so losing a little on the first sale isn’t the end of the world for them.
There’s still a window though. 6 to 18 months depending on your market is my best guess. After that, deep pockets will be a dress requirement.
