ListsHow to Reduce Facebook Ad Costs: An Ultimate Guide for Marketers

Dipti Mishra3 years ago

Facebook ads have become a trusted medium for organizations across the world to increase exposure and generate traffic. The platform’s ad algorithm is flexible enough to help any business to reach its target audience. 

However, when the costs for ad campaigns are going through the roof because of its global outreach, a marketer must look for ways to gain better results through those expenditures.

We have come up with ways to lower the ad campaign that doesn’t compromise on deliverables.

Target the right audience

Target the right audience:  An undefined set of audiences will only increase ad costs. Even if the ads reach a huge number of Facebook users, it doesn’t necessarily ensure that it is reaching the right audience for your business. If the target customers are well segmented, then it is easier to measure the success of the ads. Building specialized audiences for certain demographic, lifestyle, age, gender, or interest will help in getting better ROI.

Understanding your relevance score will be beneficial to measure the effectiveness of your ads. As per the name, it shows how relevant the ads are to the targeted audience. Any actions taken on the ad by a user helps in increasing the score. An ad scoring less on the relevance score should be either removed or replaced with a better performing one.

Excessive ad frequency needs to be regulated to avoid users clicking “I don’t want to see this ad”. 

Choose ad placements

Choose ad placements: Placement of ads mean where exactly the ads are shown to a user. The locations can be on the Desktop news feed, Mobile news food, Desktop’s right column, and so on. 

At the initial stage of the ad run, using all ad placements can be helpful to find out which placement serves the best.  After a while, the performance of each ad placement can be checked in the Facebook ads manager, and then low performing ad placements can be deactivated so that the same investment can be used for the better-placed ads.

A highly used placement is the news feed where users come across the ads while scrolling through their home page. These ads usually perform better concerning CTR and lower CPC than right column ads which have a possibility of being missed by a user.

Owing to the ease of Facebook mobile, many advertisers consider this as a more effective way of targeting than targeting desktop users. These ads are beneficial if the brand is aiming at boosting engagement(likes, comments, and shares) of the audience, encouraging app downloads, or advertising their products.

Instant articles are loaded easily on the browser and provide full-screen experience to users. This mode is beneficial when the target is raising the number of impressions and clicks.

Marketplace ads are targeted at users who are actively trying to buy something over Facebook. This is more intent-based and is affordable.

Understanding Ad metrics

Understanding Ad metrics: An optimized ad that focuses on CTR, provides a high relevance score and yields more customer engagement through likes, comments, and shares. Conversion optimization is a long and data-driven process whereas CTR optimization is a much simpler one. Even though CTR results in high traffic, it doesn’t guarantee relevant traffic. Now there are no such benchmarks for CTRs as ads don’t target the same audience with similar deliverables.

If conversions are the goal of the brand, CTR shouldn’t be used as it doesn’t consider conversions or expenditures. In that case, the CPA is a better tool.

CPM is a recommended metric if a brand is doing multiple test variations. The downside of this metric is a brand has to pay whether or not any actions are taken.

ROAS is the easiest metric to gauge the performance of your campaigns. When it is positive, it means the return on the ads is good i.e. revenue is being generated. When it is the other way around, it is a loss-making campaign.

Facebook offers more than 100 different ad metrics. But the choice should always boil down to your goals out of those ads.

Retarget your customers

Retarget your customers: If your brand is retargeting customers who have already visited the physical shop or e-commerce website, then Facebook pixels can become helpful. If the customer engagement is measured through their activity on app-based actions, then the use of SDK should be considered.

The advantage of retargeting campaigns is that they cost less and convert more. Exploring new customers is always recommended for any business to grow. However, it is equally important to keep the existing customers close. That is why retargeting plays such an important role in ad campaigns. It is designed to reach out to customers who have abandoned a purchase or haven’t made any purchases for a considerable time. Using DPA and custom audiences is an excellent way to do the same.

Split test your ad campaigns

Split test your ad campaigns: This means testing different ads in rotation to find the one which gives the best ROI. The variations in the tests can range from ad placements to creatives. The best way to do this is by creating different versions of the same ad and delivering the same to the exact set of audiences with the same delivery option and same ad placement. If you are trying to test one particular variable(either placement, creatives, audience, and so on), keep in mind to put other variables at rest. Fiddling around combinations of different parameters will lead to confusion.

The sequence to perform split tests should be creatives, delivery objectives, audience, and then ad placements. This will provide for optimized results.

This method doesn’t yield immediate results and incurs costs in the beginning. But in the long run, it provides the best results for the ads. So, the marketers may have to spend some time to find out which ad performs best.

Create relevant content

Create relevant content: You can’t apply similar tactics every time and expect different results. Analysing the performance of your ads will help in deciding if a certain ad type is not working well. If a user comes up with the same ad with an ever-changing feed, it may lead to ad fatigue resulting in the user clicking the ‘hide the ad’ option.

Facebook’s algorithm gives more weightage to videos than photos and links. So, if your ad campaign is performing poorly, then you may consider creating visually engaging videos that the users can relate to. It will help in establishing the brand in the first place leading to positive actions on the ads.

Cost optimization is always an objective of any business and here we have provided the basics of achieving the same. But when you are a marketer, the bigger picture is not to spend less, but to yield better results out of your expenditure. The key is to keep experimenting and be on your toes for the mercurial Facebook algorithms and industry demands.

Dipti Mishra

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