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High ROI Advertising on Facebook

(August 2014) posted on Wed Aug 20, 2014

Facebook allows you to find people likely to buy from you, target them with your advertising, and get a predictable return on your investment.

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By Mark Coudray

In the last issue of Screen Printing, I discussed using Facebook to build very precise target and custom audiences for your prospecting efforts. This month, I’ll expand on the potential of advertising to these precise audiences. But before I dive into the details of the different types of Facebook campaigns you can do, some background is in order.

Digital marketing and advertising is fundamentally different than the traditional marketing and advertising most of you have done. The old joke among business owners is that half of their advertising budget is wasted—they just don’t know which half. This is a typical observation for traditional campaigns that lack feedback, metrics, or analytics.

What makes Facebook advertising so incredibly enticing is the ability to test and know in advance the results you’ll be getting. This is also known as ROI (return on investment) advertising, and it’s a radical departure because advertising has traditionally been considered an expense. We all know that when things get tight, the first thing to do is cut expenses. With ROI-based campaigns, the concept is to create more sales than the advertising costs so that each dollar you invest delivers some multiple of traceable, trackable revenue. My goal is at least ten times the ad spend, so for every $100 I spend on advertising, my minimum acceptable return is $1000. Put another way, ROI advertising allows me to spend $1 to get $10 back. That may sound too good to be true, but it’s actually a very low rate of return. A recent test campaign delivered more than a 30:1 return.

The cost of social media advertising is determined by competitive bidding to place ads in front of a defined audience. Google uses keywords for this; Facebook uses the Precise Target Audience and Custom Audience features described in my last column. For those new to digital advertising, the logic is very straightforward and can be defined in several layers, each with its own metrics. The key performance indicators fall into several categories.


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