First, let me start by saying that you DO NOT have to invest in Facebook ads to build your business. If they don’t interest you at all, you’re off the hook.
On the other hand, if they’re something that intrigue you, there are a few things you should know…
The thing is, Facebook ads are really incredible in a lot of different ways. They offer an amazing level of targeting based on not just demographic information like age, gender, location, relationship status, career, etc., but also interests, pages liked, etc. And then there are advanced features like lookalike audience based on site visitors or subscribers. You can also retarget people who have visited your website, watched one of your videos on Facebook, or any number of things.
That said, though, building, testing, and tracking Facebook ads can be pretty complicated (and, frankly, well out of the scope of what I can go into here). Suffice it to say, they shouldn’t be attempted without training.
My rule about anything you pay for in your business is that it needs to pay for itself and then some. That includes software, office supplies and, yes, advertising. Maybe it’s obvious that advertising should pay for itself, but you’d be shocked at how many people create ad campaigns, set them live, and never check to see if they’ve made any money from them.
The truth is that Facebook ads can be great opportunities to build your audience and client base, but they can also be a great way to lose a lot of money, fast.
The key to Facebook ads is the numbers. If you can make the numbers work for you, you can make Facebook ads work for you.
In a nutshell, if you could invest X and make 2X every time you did, you’d keep doing it and increase that x number every time, right? But the problem is that it’s easy to invest X and not make X back. Or make less than X. Or nothing at all.
It’s a little easier to understand with real numbers. (Please understand, though, that these are only averages. Your numbers could vary higher or lower, depending on a lot of different factors.)
So, let’s start here. Let’s say your plan is to run ads that drive people to an email sign-up page and then, through a series of automated nurturing sales emails, you try to get them to hire you for a copywriting project. Let’s say it’s an email funnel.
(Just a quick tip: It’s both expensive and very unlikely to work to send cold Facebook traffic from an ad directly to your sales page to get them to buy. It’s like meeting someone new at a bar and immediately asking them to marry you. People need to be warmed up and nurtured before they’re ready for marriage AND before they’re ready to buy from you.)
So, you’ll run an ad. And your goal for the ad is an email sign-up – that’s your “conversion.” You run it to a bunch of people, some people visit the landing page and some of THOSE people subscribe. On average, you discover that it costs you $3 in advertising to get a subscriber.
Again, that is just an estimate. Your cost could be much more or it could be less.
Then you send them down your nurturing sales email sequence. Not everyone who signs up will look at your sales message. Usually, you’ll see a 25% or 30% open rate. Which means that only 25% to 30% of the people on your list will even see your sales message.
Next, a normal purchase conversion rate is 1% or 2%. So, of 100 people who see this sales message, 1 or 2 of them will purchase.
So, let’s say you spend $600 to get 200 subscribers.
Of those 200 subscribers, maybe 30% will see your sales message.
So that’s 60 people. And of those 60 people, 2% may purchase—which is one person.
So you’ve spent $600 to get one sale.
Which means that if you’re writing an email series for a client and it’s going to take you 12 hours to write it and edit it and your usual rate is $50, that’s $600. You’d need to mark it up to $1,200 just to cover the cost of the ad and the cost of your service time.
But remember, too, that if any of those percentages in that sequence skew, it affects your profits. If your email sign up conversion rates change and it takes you $4 to get one subscriber, all of your numbers change and it’s now costing you $800 to get one sale.
Or, if it drops to $2, it becomes $400 to get that sale. Or if your purchase conversion goes up or down or your email open rates go up or down – all of those factors affect how much it costs you to make a sale.
(Just a note — the average cost for conversions is closer to $7 or $8 at the time of writing this post…)
Some people love this. I find it pretty fascinating myself. But, as you can see, Facebook ads can be especially tricky to make profitable for a service-based business.
Facebook ads tend to make more numerical sense for products like high-ticket coaching or high-ticket information products where the cost of the product makes up for the cost of the ads. Or, sometimes, they can make sense for very low-ticket items when people are more likely to make a spontaneous purchase.
But you also can’t judge by who’s running ads – some people are running ads, knowing that they’ll be at a loss but they need the ads to help grow the visibility of their business.
So the long and short of it is that you absolutely can try Facebook ads for your business. BUT you must:
- Understand what you’re doing. Take a course so you know how to place your pixels to track ad performance, test your ads, and track your metrics in Ads Manager.
- Understand your metrics and fully extrapolate how those numbers affect what you need to charge to ensure that you don’t lose money.
- Check your ads every single day. Facebook ads are not “set it and forget it” – the results can change regularly. You also should regularly be testing new ads to keep what people see fresh.
If you’re going to run ads, you also need to monitor comments to answer questions and delete any nasty comments.
Can Facebook ads work for you? Absolutely – as long as you’re willing to follow the guidelines I’ve set.
But again, you don’t have to run Facebook ads at all. Invest your time and energy into the other tactics we’ve discussed in this course and you’ll start to see a lot of success.
Last Updated on October 6, 2022
Susan Burton says
Amazing article! I love how you use some specific numbers to create a real-life example!
Nicki Krawczyk says
I’m so glad you found it helpful! Actually numbers really help to give some context, don’t they?
Thanks for commenting!