Retailer Interviews

How To Advertise On Facebook

In this article we explain the most common misconceptions businesses have, and most importantly, exactly how to advertise on Facebook.

How to advertise on Facebook can be an overwhelming concept for business owners. On one hand, the potential gain seems limitless. For only a few hundred dollars, you can reach thousands of people who are targeted to your exact customer profile. 

On the other hand, advertising on Facebook can seem overwhelming and daunting. There are so many options, and so many people willing to take your money and promise results. It can seem safer to avoid online advertising altogether. 

For this article, we sat down with Alex Gallner, a marketer who specializes in Facebook advertising. He’s helped dozens of businesses expand their market share and increase their sales. 

alex gallner, facebook marketing, how to advertise on facebook

He told us the most common misconceptions businesses have, and most importantly, exactly how to advertise on Facebook. If you’re interested in having a consultation with Alex, contact him here.  

1) Facebook Advertising Can Work For Any Type Of Business

different cartoon shops

One of the biggest misconceptions surrounding online advertising and especially Facebook advertising is that it only works for certain types of businesses. 

However, with the right ad content, special offers, and experimentation, almost any kind of business can be successfully advertised on Facebook. Alex told us the companies he works with almost all fall into the following categories, each of which has a different strategy:

  • Local Brick and Mortar Locations: ‘These are local clients, like local stores, restaurants or services. Retail locations, doctors and lawyers, things like that. This category is its own animal because you’re really relying on creating a finite audience that has a predetermined geographic area.’
  • E-commerce: ‘This is a little different because typically, in e-commerce, you’re trying to appeal to a mass market. It’s more about finding out your niche and appealing to the people who have an affinity for that niche.’
  • Coaches and Consultants: ‘These are experts like life coaches, tutors, and gurus. People who are trying to sell their expertise. They might just be selling their service, or they might be selling digital products, but it’s different than people with physical products.’ 

2) The Most Important Math Is The Relationship Between The Cost Of Acquisition And Customer Lifetime Value 

graph going up and down
You’ve got to be able to get a new customer for less than you’ll make from them.

Advertising anywhere digitally involves a ton of math, statistics, and variables. But everything boils down to the relationship between your cost of acquisition and the customer lifetime value. 

Your cost per acquisition is how much it costs you on average to get a new customer. This includes advertising, as well as any materials and labor costs that go into getting that new customer. 

Your customer lifetime value is how much on average each customer spends on your business during the entire time they’re a customer. 

To have a successful Facebook campaign, your customer acquisition cost has to be equal to or less than the lifetime value of a customer. Let’s say each of your customers spends an average of $100 on your business throughout shopping with you. That means your Facebook ads have to cost you $100 or less to get a new customer. 

Because the success of your ads hinges on the relationship between these two numbers, marketers do everything possible to make them more favorable. 

‘If you only sell packs of gum, you would need to figure out a way that your relationship with that customer won’t end on a single pack of gum. 

Selling one pack of really good, overpriced gum would lead to three or four bucks. However, if you could sell more than one pack, you could raise the average order value.

Like if you have the best gum on the planet, now you can convince people to sign up for a recurring subscription of gum or something complementary to the gum-chewing experience. Then, suddenly customers aren’t spending three or four bucks. It could be $50 – $100.’

3) Get Ready To Spend At Least $500

person opening wallet how to advertise on facebook

So how much will you have to spend? While every company is different, a good ballpark number is $500 to see if the ads are working. 

Facebook ads are like a shotgun approach at first. The $500 mark is essentially what it takes to figure out where to aim your focus, and after that, you can optimize the rest of your process. It can cost less than that sometimes, but in the beginning, you’re paying for data and for the algorithms to narrow focus.

‘You could probably get away with as little as 10 bucks a day. But I wouldn’t recommend it, I would recommend at least 20 bucks a day.

It’s hard to say how long you’ll have to spend this amount. It really depends on the competition for your audience, because it’s still a competition based, auction-based system, even though it’s automated. So it depends on the level of competition in the space.

For a local audience, a lot of people don’t even do Facebook ads, so it’s usually pretty cheap. Pretty quickly, I can usually optimize the campaign for about 500 bucks. 

That being said, it’s not like you’re not getting results until then. Hopefully, you’re learning a lot in that process. And then you have something ready to go and hopefully ready to stay.

The other thing is, you’re paying for clicks or impressions, and it’s all a game of interpreting statistics. So to gain a large enough sample size, or to get to statistical significance, you’re going to have to spend a certain amount of money. 

The higher the budget is, the faster you’re going to get the insights that you need. So really, in the early stages, budget means speed. But ultimately, you’re trying to figure out what the variable is that makes you profitable. Once you have that, you kind of shift your focus into optimization and scaling.’

4) Be Flexible

pencil in knot

For your ads to be successful, you need to adapt your business around what works for Facebook, not the other way around. This means getting rid of certain expectations, being willing to add in new marketing techniques, and maybe even modifying your products and services based on the feedback you get from the ads. 

Businesses often feel uncomfortable about certain proven techniques they feel doesn’t match the tone of their brand. Perky ad copy, offering free gifts and large discounts, and building funnels are simply part of a successful Facebook ad campaign. If you aren’t willing to change from your ideal version of ads, Facebook advertising may not be for you. 

‘Most people think they know what people want, what customers want. And the truth is, you don’t know until you test it.

And that concept holds true in Silicon Valley, which is why they don’t build out these massive apps anymore with all these features. They come up with a minimum viable product by asking, what’s the most minimal functional version of what we’re trying to do? 

They think, once we can get people in front of our product, they’ll tell us what they want. And that’s how some of the best things are made. It’s the same thing with your business or your marketing.

Initially, the focus just has to be on getting in front of your ideal customer. You’re creating a value exchange between you and your ideal prospect, and then you listen. 

It’s really easy to get caught up in statistics, and I’m guilty of this for sure. But the reality is, each one of these statistics is a human being with a whole life behind them. 

Our businesses exist by collecting a group of these individuals and attempting to serve them. The only way to really serve them is to listen, and the way to get them to really tell you what they want is to create that initial value. You have to create that initial relationship because no one wants to talk to a stranger. 

Let’s take a mug company as an example. You may get feedback that you should carefully listen to. For instance, your customers may tell you that your mugs are a little too small.

When I would put it under my Nespresso, it would overflow just a little bit. If it were bigger, I would buy it for everyone because we all drink Nespresso.’ It’s important to really take those kinds of comments to heart and consider making changes based on them. 

Your initial challenge is going to be finding the right people and then figuring out what you’re selling and how you’re selling it. Once you figure that out, it gets pretty easy. The more successes you get, the more the platform learns. 

And that’s really where people are successful with Facebook. Once you’ve made it work on a small scale, If you can collect enough successful impressions, then the Facebook algorithm is really good at taking your successes and replicating them. 

The more data they have, the cheaper they’re going to be able to do it. And assuming your audience size is big enough, you’re going to be able to scale.’

5) You’re Not Paying For Ads, You’re Paying For Data

how to advertise on facebook data in shape of human face

Online advertising is different than traditional advertising because you’re given complete access to how the ad performed. This means you know who saw the ad, who clicked on it, and who eventually bought. 

Analyzing this data won’t just make your Facebook ads better, it can also be used to improve how your business normally gets leads. By knowing the average age, income, and general demographics of who engaged with your Facebook ads, you can target those types of people in other outreach campaigns. 

‘I usually tell my clients initially, try not to think of it so much as you’re paying for these ads as much as you’re paying for the data. It’s super-valuable data. 

Initially, when I’m setting up a campaign, I’m looking more to identify what is the right way to engage with this audience? Once I figure that out, after a series of tests and experiments, I then have some really valuable information. Because next time I can skip that step, and bring any offer that I have onto the table.

There are a couple of phases I go through. Usually, I try to identify the audience I’m going after first, then I test out the different offers and see how the audience responds. After that it’s just an ongoing process of scaling and optimization.

It’s also important to own your traffic. I tend to focus on collecting contacts before I try to go directly for a sale. Once I have the contact, I have a chance to follow up with them via email. With their email, I get more chances to close a sale without having to pay for them to see the ad again.

It’s going to be very unlikely they’re going to buy something from you their first time meeting you. But once I have that contact, I have the chance to re-engage, even give them a little bit of value until they’re ready to buy.’

6) A Buyer Is A Buyer Is A Buyer

money bags being given

Online ads are a volume game. Facebook can get your ads in front of thousands of people, but only a small percent will engage with the ad, and an even smaller percent will spend money on your business. 

With this huge volume of people, there are many different levels of engagement. One of the most important distinctions is finding out who will spend money – any amount of money – on your business. 

‘I have a client where we’re selling an e-book for $1. We sell other stuff after the book. But what’s cool is that it’s just for $1, so we’re collecting a huge list of buyers. Rather than charging like $100 we have this massive list of people who are willing to pay us at least $1. 

And there’s a huge difference between people who are curious and people who are buyers. There’s a marketing phrase, ‘A buyer is a buyer is a buyer.’

Once you identify a buyer, you have a window of opportunity to ascend the relationship and get that person to buy more stuff. But it’s pretty unlikely that they’re going to take you up on your high ticket offers if that’s the first thing you put in front of them. 

Whereas if you put a little bit of value in front of them first, you’re much more likely to build a relationship. So it’s all about initially owning the contact and self-liquidating the cost per acquisition with your initial set of offers.’

7) Either Dedicate Yourself To Learn What Works, Or Hire An Expert

person clicking on expert advice how to advertise on facebook

One of the most common questions people have about Facebook advertising is whether or not they can do it themselves. Many small business owners have limited marketing budgets already, so the thought of simply paying for the ads themselves is already daunting. Paying for an expert’s help on top of that can seem out of the question. 

The most important thing to remember is that Facebook ads have to be done correctly, and whether that’s you or a professional marketer doesn’t matter. However, if you decide to put up the ads on your own, make sure you do a ton of research and are caught up to date with the most recent methods. 

‘A lot of people have tried it on their own, and they’re a little gun shy about it. Because the truth is, if you don’t know what you’re doing, it’s easy to mess it up.

It’s not actually that difficult to learn. But you either have to learn it completely or find someone who knows it already. Because there are too many steps in the process of building out a campaign and managing it. 

Even if you get lucky out of the gate, there are things to consider, like scaling. One mistake a lot of people make is not scaling correctly. Let’s say you’re testing an ad small, maybe you’re only running $10 or $20 a day on it. But it’s profitable. 

A mistake would then be to say, okay, we figured it out. Now, instead of $10 to $20 a day, we’re going to spend $1,000 to $2,000 a day and get rich. It just does not work. It’s too big of a jump for the algorithm. And so there are ways to scale, but you can’t do it too quickly.

There are ways to scale vertically, that’s adding budget, and there’s horizontal scaling which is adding different prospects and targets.

So should people hire someone? That depends on your interest level. It’s easy to learn if you’re into it. If it at all spooks you, then realize there is a learning curve. And someone who knows what they’re doing is going to be well worth it.

One thing that’s helped me as an entrepreneur and a marketer, is to stop asking yourself the question, how do I do this? That’s a common question. 

The question shouldn’t be, how am I going to do that? As a business owner, you’re better off asking the question, who am I going to get to do that?

Because even though someone’s fees might be hefty, at least for a platform like Facebook, if someone’s worth their weight, you should be begging them to pay their fee. That’s the opportunity. That’s where the potential is. And it’s tremendous. Never before have we been able to leverage godlike amounts of data.

Facebook knows everything about you, they just do. They can’t tell you. They don’t want to freak anybody out. But they’re going to use machine learning to leverage that data. And it’s really powerful when you know what you’re doing.

You know, I had to learn it. And I originally learned it to serve my own businesses. Eventually, it was successful enough that people started asking me if I could help them out, and that’s how I formed my career in marketing.

But realistically, that was a long journey. And it cost me a lot of money to get the right info. You have to know who to consult and who to learn from.’

If you’re interested in learning how to advertise on Facebook on your own, Alex recommends this free course. 

8) Check Out Your Competition’s Ads

paper airplanes racing

Just like how you should be competition shopping, you should also be spying on your competition’s ads. If similar businesses are running ads on Facebook, that’s a great data point to prove that Facebook ads will also work for your business. 

‘Success leaves clues. If your competitors are successful with this, there’s a reason. And you can actually go on to their Facebook page and see what ads they’re running.

Before you jump in, do a little recon. That’s what I do when I build out a campaign. I always want to see what the competition is up to. Because if somebody is spending money on ads, unless they’re just made of money, there’s a good chance that ad is working out for them. 

There are platforms like Similar Web that you can use, and you can kind of spy on people. You can also go into Facebook, not even just the ad, but look at how they structured their offer.

Are they giving something away for free and you just pay shipping? And then they know people will want to add $50 and $100 items at checkout? Is that what they’re doing? Pay attention to how they’re getting people in the door. 

There’s also a concept called funnel hacking. You can just turn on your screen recorder, click one of their ads, record yourself buying everything, and you can see how they do it.

I wouldn’t advocate plagiarism by any means, but I think you can model what is likely leading to their success.’

9) If You Do Everything Right, It Can Transform Your Business

going up steps

The bottom line about Facebook advertising is that it involves a ton of time, dedication, and knowledge to get right, and even then there are still some risks. 

However, this shouldn’t serve as a deterrent. If you need new leads and customers for your business, it might be worth it, whether you learn yourself or hire an expert. Thousands of businesses have found success with Facebook advertising, and it’s completely transformed they operate. 

‘I think people really need to understand, this is a huge opportunity. We haven’t had anything like this before, to this scale. It’s spooky how well it works. 

I would encourage people to get their feet wet. But if they’re scared, find someone who knows what they’re doing. And that’s a whole other conversation – the conversion rate optimization that happens on-site versus on the ad on Facebook. The ad on Facebook is just the bait and the hook.

Once you’ve got the fish on the hook, you’ve got to reel them in. Go out there and see what your competitors are doing. If anybody else is having success, try to model it. 

And if you don’t know what you’re doing, find someone who does.

1 comment on “How To Advertise On Facebook

  1. Chip Hopkins

    Very interesting article. The part about the Lifetime value of a customers, is what so many business owners don’t get. That one fact, when you have the data to figure it out, can determine whether or not your business can succeed.
    I have a need and would like to try Facebook advertising but I don’t have the time to figure it out. Do you have a referral list of people who could help me get started.

Leave a Reply