Are Facebook Ads Efficient and Cost-Effective?

Are Facebook Ads Efficient and Cost-Effective

Social Media Marketing in 2020 is one of the pillars of Digital Marketing. No business today can ignore the vital role social media plays in its marketing strategy. Among all the social media platforms, Facebook has been one of the preferred platforms for businesses in the past to market their products and services.

But time and again the question is raised “How effective are Facebook Ads?” The answer to this is “very effective” if done right.

If you are still sitting on the fence about using Facebook for your business, let’s get right on and discuss this in further detail to help you decide.

  1. Your Customers are on Facebook:

There over 2.45 billion monthly active users, this number is simply overwhelming. People from all age groups hang out on Facebook. Millions of users check Facebook daily and some of them multiple times during a single day. This is a huge pool of customers that you cannot afford to ignore. Whatever your business is, your customer is out there on Facebook. Facebook allows you to show your ads to all these customers.

  1. Reach Target Customers:

Whenever you create a Facebook account, it requires you to give some basic information about yourself. All this forms part of the Facebook user database. Facebook also tracks how you interact on its platform, the content you engage with, the groups you visit, the pages you like and so on.
This all gets added to Facebook’s user database. This makes it possible for advertisers to create ads using various detailed targeting options about their ideal customers. Facebook makes sure that your ads reach the right people.

  1. Cost-Effective:

Facebook advertising remains one of the most cost-effective platforms to run ads on. Compared to other forms of traditional advertising, you can start with a low budget amount and then scale up as you like. You have the option of running your ads for a single day – more numbers of days. Also, the reach you get through Facebook ads is more compared to other forms of advertising, which makes it an ideal platform even for small businesses to advertise.

  1. Facebook Gives Fast Results:

Once you have set up the ad and it gets approved, the ads start giving you results. In a matter of hours, you can reach thousands of people. You don’t have to wait for months to get the outcomes. Whatever your goal, you can achieve it with Facebook Ads.

  1. Increased Brand Awareness:

Brand visibility is very important for any business. Brand Awareness is one goal you can easily achieve using Facebook ads. Facebook has an important feature called lookalike audience whose demographics and interests match your existing customers or followers. Using this, you can show your ads to people who might be interested in your product and service and increase brand awareness and generate relevant leads and conversions.

  1. Drive Traffic To Your Website:

Facebook ads can drive traffic to your website through conversion ads. You can encourage people to visit any page or take action on the website. By installing the Facebook pixel, you can learn about the characteristics of your website visitors and create ads that target similar people. There are high chances of these kinds of ads giving you greater conversion and driving relevant traffic to your website.

  1. Facebook Ads are Measurable:

The results of Facebook Ads can be measured in detail. You can get to know how many impressions, clicks, conversions you are getting. By installing conversion pixel on the website, you can track the conversions like purchases, sign-ups, etc. There are various metrics that Facebook offers businesses to know the effectiveness of their ad campaigns.

  1. Helps You Drive More Offline Sales And Store Visits:

Facebook ads have an option that you can choose to send your visitors to your offline stores. This is very important if you have a physical store. It increases brand awareness and also traffic to your store, where there is a greater chance of the customers converting. It is also possible to upsell other products when customers visit your store.

  1. A/B Testing:

One reason Facebook ads are so effective is that you can split test your Ads. Once your ads run, you get data about the performance. You can easily test which ads are performing well and which are not.
Stop the ads, which are not working, and divert the funds to well-performing ads. You can fine-tune and adjust every aspect of your ad to make it better and relaunch.

  1. Remarketing:

This is one powerful feature that makes these ads effective. Many customers after clicking the ad go to a website or landing page but do not undertake the action. Facebook collects this data and makes it possible to retarget all these customers. There is a high chance that these customers who have already engaged with your brand or product will take the next step and complete the action you expect from them.

  1. Cost Per Acquisition is Less:

Facebook advertising offers multiple ad formats, call to actions, multiple targeting options, placements, and so on. You can create the best possible engaging ads in a format suitable for your customers. Detailed targeting options are available to decide who to show the ads to in the minutest of details. You can also decide where to show the ads. All this helps in targeting the best potential audience and in the form that they will engage. This decreases the cost of acquisition of each lead or conversion significantly.

I rest my case here. I hope by now you are thoroughly convinced about how and why Facebook ads are effective.

How Much Do Facebook Ads Cost

The other frequent question related to Facebook ads is, “How much does it cost?”

Facebook Ads does not really put a lot of constraints on how much you need to spend; it can be made to work for any budget.

However, the cost of Your Facebook ads depends on certain variables that come into play while setting up your Ads. Some main factors are:

  1. Objective:

Facebook has different goals that you can select. The objective you choose will affect whom Facebook shows your ads to and can significantly influence your cost. The smaller the group of people your ad can be shown to higher the cost. Therefore, select the appropriate goal as the KPIs tracked are also different.

  1. Type of Bidding and the Amount:

The Ad auction and the bidding amount play a major role in deciding the cost. When multiple contenders are bidding for the same advertising spot, it does not always go to the highest bidder. Here something called ad value plays a role. Ad value depends on:

Bid amount: The amount you are ready to bid.

Quality of ad and relevance: It depends on the feedback Facebook gets from its users and also how relevant Facebook thinks your ad is to the people you are targeting.

Estimated action rates: This is an estimation by Facebook of how likely your target audience is likely to complete your objective.

Again, the higher you bid, the greater the chances of your ad being shown.

  1. Targeted Audience and Size

If your ads are shown to a relevant audience, the costs are less. There are various options to define your target audience, which takes years to perfect. The wrong selection can increase your costs significantly. Again, if you keep the size of your audience too small, your cost can increase. It is a trial and error, try out for a few days and then fine-tune.

  1. Quality of Ad:

If you want to reduce your ad cost, you need to work on designing the best possible ads. It should be interesting and engaging and drive action. Each ad gets an ad relevance score. This ranges between 1 and 10. The higher the score, the lower your cost.

  1. Industry You Operate In:

If you are operating in an industry that deals with high-value products or services, the cost will be higher than those in a low-value product industry. No specific guidelines are there for this.

Are Facebook Ads effective? Yes, and it remains effective. But having said this, I would stress that you need to fully understand the entire advertising process, and what major factors make a Facebook ads campaign effective. You need to come up with an optimum balance so you can meet your advertising objective at the lowest possible cost.

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