Here’s how businesses can make their Facebook Ads profitable by significantly cutting their cost per acquisition.
Running Facebook Ads for your small business can be hard work, especially when you are managing several other areas of the business. Not to mention that you may have zero experience in the social network’s advertising suite or pay-per-click in general.
Where do you go? For many small business owners, they either try to setup the account themselves, follow Facebook’s steps, and end up losing money. Or they go to a digital marketing agency, receive the sales pitch, invest significant sums, and get little-to-nothing back, on many occasions.
Both of those examples above were exactly what happened to one of my latest Facebook Ads clients. I’ve been a freelance PPC consultant for more than four years now and have heard the stories more times than I care to remember.
The Situation
We were two weeks into 2023 when I got a call from a prospect client. They were looking for someone to audit their Facebook Ads account with the potential of managing it full-time.
An agency had been running their account for them for a year, with the CPA going up and up. The prospect client admitted to not keeping a close eye on it, with sales from their brand name in Google keeping them afloat.
I won’t deny, when they told me what their product was, I was a little hesitant. Let’s just say it’s a niche product, and I tend to only work with clients whom I am confident I will be able to run a profitable pay-per-click campaign for.
Auditing their Facebook Ads Account
They granted me access to their Facebook Ads account. After doing a bit more research into the product and customer reviews I took a look at how their advertising had been performing.
Campaigns had been setup between February and March 2022 and the only adjustments since then had been increasing the budgets. No tests, no optimisations, nothing.
Was it a surprise that this account was failing? Not at all.
Of the campaigns they setup, the lowest CPA they got throughout 2022 was £22.86. Remember that number for later. The previous 90 days had been £27.69, and January was on course to be even higher (it would end up at £33.73).
Tip: Facebook Ads isn’t just a one-time setup and let it run. Even if that is profitable to you, there are always optimisations that can be made to further improve your campaigns. In this case, lots of changes need to be made just to make the campaigns profitable. Test, test, test.
Looking through the three active campaigns I noticed the Facebook Interests didn’t align with the ad copy. I have a non-disclosure agreement with the client, so let’s just hypothesise that the product is potty training your baby.
Instead of targeting users who like the Toilet Training and Parents (1-2y) Interests, they’d targeted Cute Baby, Parents and Parenting (magazine) Interests.
I’m all for testing new Interests and demographics but as mentioned earlier, everything had been setup and left for almost a year. There was no testing.
The Audience targeting you can create in Facebook Ads is fantastic:
- Locations
- Excluded Locations
- Age
- Gender
- Demographics
- Behaviours
- Home
- Interests
- Life Events
- Parental Status
- Work
Tip: Make your audience as detailed as possible to begin with. This way you should quickly have an idea if Facebook Ads is profitable for you. You can test additional interests and demographics afterwards if/when you look to scale.
Getting the Go Ahead
I let the potential client know I was confident in reducing the CPA and that I was interested in managing their account.
A few days later we setup a Google Meet. It ran for over an hour, with the client explaining more detail about their product and target audience. They felt they hadn’t got this across to the current agency managing their campaign, but I insisted it had been poorly managed.
They challenged me to reduce the CPA to below £20. Bear in mind the record low for any single campaign last year had been £22.86, and January would end up at £33.73.
Oh, and the client had now reduced the budget to £400 for the month, having lost faith in Facebook after reviewing the numbers. They had spent £4,000 combined over the previous quarter to give you an idea of the reduction.
Building New Campaigns
There was absolutely nothing I liked about the current or previous campaigns, and nothing in the data that would persuade me to carry them over. It was a case of setting up everything from scratch – Finding suitable Interests, choosing the right imagery, producing the ad copy etc.
I’d been given the all clear to start on the account from 1 February. I planned I’d have a Remarketing campaign for previous visitors to their website that hadn’t converted. And two other campaigns – one for people interested in the product, and the other for its use. Hypothetically, if this was a product for baby toilet training, one campaign was for potties and the other for toilet training.
The latter needed a landing page though. I didn’t feel the current landing page, nor the homepage, nor any page was suitable for this audience. The client would supply me the copy and imagery, I’d do the design based on years of A/B landing page testing experience and adjust the copy where I felt necessary.
We went back and forth throughout February and the landing page for the latter campaign didn’t go live until the 27th.
In the meantime, I put the other two campaigns together, got sign off on the ad copy, and they both went live on 7 February.
Record Numbers
Starting a few days into the month meant I essentially had a £20 per day budget for the remainder of the month. I needed to average 1 sale per day at worst in order to match the target CPA.
I smashed it.
By the middle of the month, we had already had 19 sales. I even double-checked with the client it matched up with their CRM system just to be safe.
The final figures for February:
- 71 sales (a record high for a single month)
- £6.76 (a record low CPA for a single month)
From January to February their CPA had dropped by a whooping 80%.
Scaling Campaigns on Facebook Ads
Speaking with an ecstatic client on Monday 27 February, I got the go ahead to increase the monthly budget from £400 to £1,500 for March. I actually started early and increased the daily budget to £50 there and then, for the final two days of February.
My task for March is to scale the campaigns. The first test is simply: Increase the budgets to see if the traffic and potential sales are out there.
I understand nearly quadrupling your budget overnight could lead to an increase in the CPA. But I’m not too worried – it’s not going to shoot up to £20, it won’t be anywhere near that mark. Anything a few £ over £6.76 is still a big win if I can spend the full budget.
Should increasing the budget not increase the spend and sales, then I have a few options in my back pocket:
- Increase the number of Interests in the campaigns
- Begin using Lookalike audiences
Should I hire an agency to manage my Facebook Ads?
The only way you’ll know the correct answer to this question is by hiring an agency. Either they will make Facebook Ads profitable for your business, or they won’t.
Same goes for freelancers. My client is lucky to have come across someone with a track record of success and who is willing to do the research and put the hours in.
For something that is likely to be a significant financial investment for you: do your due diligence. Vet the prospect agency or freelancer. Any recent negative reviews in Google? Any recent positive reviews you can talk to over the phone?
Need help with your Facebook/Meta Ads account? Get in touch today and I will be glad to help.