Can you make money using social media ads?
Since starting the business twenty years ago, I have witnessed the evolution of online advertising into its current process-driven, data-heavy incarnation. This form of promotion has undoubtedly transformed the retail landscape, enabling even the smallest businesses to extend their reach nationally and internationally. One line I have used in presentations in the past is, “if you have £1000, you could tell a million people you exist by the end of the day.” Of course, it’s not quite that simple, but the potential is mind-boggling.
The Potential and Risks of Social Media Advertising
However, this vast potential also poses a significant barrier to generating a return on investment from social media advertising. The scope is so large that you can lose a significant amount of money in an instant if it isn’t set up correctly. In a conversation with a customer last week, he told me how his ads agency made a change to their campaign, and by the next morning, his life savings were gone as the ads burnt through his budget without generating a return on investment. I have heard similar stories over the years, where people either don’t have sufficient knowledge to control or target their campaigns effectively or where they work with larger ad agencies that manage their accounts as if they were large PLCs with unlimited budgets.
My Approach to Online Advertising
My approach has always been to tread softly when entering online advertising. I test different parameters using small budgets with clearly defined ceilings on what the software can spend, and if there isn’t a return on investment, I stop and find a different marketing channel.
The Hundred Click Rule
In my experience, it takes about one hundred clicks to generate a meaningful enquiry that could become a sale. That’s not science; I haven’t read it anywhere; it’s my observation from personally viewing the analytics of thousands of businesses over a long period. This statistic is the starting point in my view, because if the average cost per click is 50 pence, you must have a product that generates a gross profit of at least £50 each time (and that is just to break even!). As such, many businesses I know only invest ad spend in promoting their most profitable services and products.
Of course, it can and should be better than that in terms of return on ad spend, which you may have heard called ROAS. The goal is to target your campaigns more effectively, create more engaging ads for the target audience, and ensure the landing destination (web page) sells your products.
Past Preference for Google Ads
In the past, I always preferred Google ads to social ads, as there seems to be a far stronger link between investment and subsequent sales. The only ads that I always recommend all businesses set up are brand awareness ads around a location (if you are a destination such as a bricks-and-mortar shop) and the Custom Engagement ad, which displays your promotion to people who have already engaged with your social page or content in some way. Those two always seemed like no-brainers to me, and for as little as £10 a month, you could display your ad 15,000 times to a very targeted audience. Boosting posts, ‘like’ ads, and so on—I’ve just never met a business owner (apart from large corporates with significant budgets) who could tell me with any confidence that these ads generated sales. I’m sure they are out there, but I’ve not encountered them!
A Unusual Facebook Ad Case
The most successful Facebook ad I know of personally was an ad offering to send people a printed brochure for free, not an e-commerce seller at all. That always struck me as ironic—the digital ads evolution worked best at promoting a printed booklet delivered to your door by a driver in his van. It wasn’t even a sale at that point; it was just a step in the sales process to get the customer to view the product range and fill the funnel of prospects.
Learning from a Successful Businessperson using Social Ads
I recently became aware of a brilliant social ad campaign being used by an innovative business person I had worked with previously. She had been generating a return on investment of multiple times the ad spend from day one of launching the campaigns. That piqued my interest, and we met for lunch. She is using an innovative process, a systematic way to test the social marketplace in a very cost-effective manner, before investing higher amounts in ads that have been proven to sell. This approach is very similar to the one I use for Google ads.
Generously, she gave me the name of the course provider who taught this method. I have completed this programme as part of my personal development.
The approach is simple, methodical, logical, and incremental, with an analytics review at each stage before spending more budget. And that’s the key: step-by-step dipping of your toe in the vast social media ocean until you eventually find the place where the water is warmest, where the customers reside who want to buy your product, rather than just wasting money on making noise and hoping to be heard.
Adopting the New Approach
I have adopted this approach and added it to the portfolio of services I offer under the online ads umbrella and started using it myself. If you would like help with social media ads and haven’t been able to make it work previously, please do contact me regarding set up/management.
