Posted by Andrella | September 28, 2018
How to reduce Facebook Lead Ads Cost for Better ROI

Over the years, Facebook has emerged as one of the leading platforms for business promotion. The fact that it allows getting hold of millions of people from all over the world under the same roof has made it so popular. Companies invest in millions in online marketing, which includes a significant amount in Facebook. However, ROI or return on investment is an important aspect which needs to be taken care of. The main idea is to invest less and to get a considerable amount of return out of it.

The advertisement cost at Facebook depends on different factors which include the audience, goals, industry and different optimization settings.

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There are ways which can help the companies to reduce their ad cost on Facebook and at the same time ensure high rate on investment

Tips on Reducing Facebook Lead Ad Cost

The online marketing gurus have come up with a couple of valuable tips which have proven to be very useful when it comes to reducing cost. Here are some of them

  • Specific Audience Should be Targeted: While specifying an audience, the advertisers need to be very precise. By narrowing the target audience the competition can be drastically reduced from other brands targeting the same audience. It is basically a bidding war with other brands.  The audience needs to be targeted based on their interest, demography and geographical area.

    How to reduce Facebook Lead Ads Cost for Better ROI

  • Bid Caps: Some experts are of the opinion that more granular the audience targeting is, the results tend to be more expensive. It is because Facebook offers a mechanism which allows reaching out to the most valuable audience and it is likely to charge more for its own interest. However, this can be managed by using bid caps and rule. This is particularly applicable in case of app installs which is based on the lifelong value of an individual sale or lead.

  • Audience Overlap: Few Digital Marketing experts have recommended the use of Facebook Audience Overlap Tool. It is very useful when it comes to monitoring whether the audiences are being overlapped significantly. If they are indeed, it helps to select the audience which is relevant to the marketing goals.

  • Reintegrating Segments: The website visitors need to be segmented by their level of engagement for creating better segments for retargeting in Facebook. Running dynamic retargeting advertisements can be very effective when it comes to generating sales at a reasonably low cost on Facebook, per acquisition.

  • Targeting Fans Separately: It has become a common practice these days to segment the consumers connected to the Facebook page and then saving them as independent audiences and then building dedicated campaigns. The same mechanism can be applied in case of visitors for websites and converters.

    How to reduce Facebook Lead Ads Cost for Better ROI

  • Using Video: Another effective way of reducing ad cost on Facebook is using videos wherever it is possible. As far as Facebook videos are concerned, they are valued more. Facebook offers the videos a bigger impression which generates cheaper CPC

All these factors along with many others together help to reduce ad cost on Facebook and ensure a high return on investment

Facebook Ad Hacks to Increase ROI

According to some digital marketing experts, there are ways which can be used quite effectively to increase the ROI. Here are some of them

  • Targeting the Right Audience: Most of the Facebook marketers think that they can get the desired results by simply optimizing their Facebook ads. This is a wrong notion and far from being true. The fact of the matter is, a proper strategy needs to be formulated before optimizing the ads. The strategy should be based on the target audience; as to what they like and what they are likely to respond to.  According to some experts, the following steps need to be followed.

  • The first step should be defining the target audience
  • The targeting option of Facebook should be listed and it needs to be made sure that it matches the description above
  • The ad sets needs to be created which should base on the targeting options

It needs to be mentioned that there is no assurance that this will help reach the target audience. One needs to follow up and make sure that the trick is working.

  • Avoid Running Entire Ad Set: It’s a common mistake made by most of the people. They tend to turn off the entire set of the ad when it’s not yielding the desired results. According to a study, there are 5 major aspects that need to be taken into consideration while creating ad set for Facebook

  • Allocation of budgets
  • Selecting the proper target audience
  • Creating an ad schedule
  • Choosing the proper bidding option
  • Deciding where the ads should be placed.

Multiple creative needs to be created within each set of the ad in order to see and test what is working as far as the target audience is concerned.

  • Low Cost per Conversion should be looked for: One needs to be careful when the number of clicks and conversions are close. When it is being properly analyzed, one would notice that the actual conversions are quite different from what was assumed

    How to reduce Facebook Lead Ads Cost for Better ROI

  • Conversion Rates need to be looked beyond at: Many people think that the conversion rates can be improved when the ads are being optimized; however, they tend to ignore one vital aspect, which is CPM or cost per mile. CPM refers to cost per thousand impressions and gives a clear idea of the volume of competition one needs to encounter in order to reach the target audience.

CPM plays an important role when it comes to directly affect the cost per conversion. If it is ignored, then the cost per acquisition for a customer is likely to be more than what one can afford.

It needs to be remembered that it is not sufficient to improve the conversion rates while managing the Facebook ads.  For each target audience, the CPM needs to be considered at a strategic level.

Advertising Definitions

When it comes to Facebook ads, there are certain important aspects that one needs to get used to. It is true that one pays for the campaign goal but it’s quite likely that one ad can be used in different other ways.  Here are some of the mechanisms which are commonly used for running ads on Facebook

  • CPC(Cost per Click): CPC needs to be the metric if a campaign has been designed to charge for the clicks.

  • CPL (Cost per like): As the name suggests, this is generally used in the Like campaigns. Cost per Like mechanism is used when an ad is being presented to a user and he clicks on the Like

  • CPM (Cost per Mile): Cost per Mile is being frequently used for measuring brand awareness

  • CPA (Cost per Action): as the name suggests, CPA is used to measure activities related to any action like installing an App. In order for the advertiser to be charged, the user needs to click on the button.

  • Relevance Score: This mechanism is only applicable in case of ads. The estimated metric is set on a scale of 1 to 10. It is shown after the displayed ad has received impressions in excess of 500 and it is also based on the fact how the audience has responded to the ad.

  • Frequency: This gives the advertiser an estimate of how often his ad has been seen by a user. The method of calculating this number is by figuring out the total impression and then dividing it by the total number of unique users, also known as a reach.  It is considered to be an ad fatigue if high numbers are reached.

What are the Factors that Affect Cost?

There are quite a few factors which affect the ad cost on Facebook. Here are some of them

  • Industry: The industry to which the product belongs can affect cost. Some industry has lower advertising cost compared to the others.

    How to reduce Facebook Lead Ads Cost for Better ROI

  • Time of the Year: It is very important to determine the right time of the year to run an advertisement on Facebook. For example during festive and holiday seasons, the cost would be considerably higher as there are many other competitors around.

  • Objective: Objective of the campaign plays a very important role. Installing an app would cost more compared to any post engagement

The key to achieving higher ROI from Facebook is to set a budget and then outlining the goals. The reason it is very important to be clear about the goals because it would help to determine the focus areas and at the same time the objectives to be achieved.

It is advisable to start with a reasonable budget, wait and watch how the ad is performing and then increase the budget. A daily, monthly and yearly budget can be set would be reviewed and revised whenever necessary.  Constant monitoring and keeping an eye on the competitor’s strategies also play a vital role in this regard.


Author: Andrella



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