I've been getting a lot of questions along the lines of, ‘How much do I need to start advertising on Facebook?’
…Or: ‘How much money do I really have to spend each day to see results with my FB ads?’
It can all start with just five dollars per day.
Want the full Facebook Advertising course I'm personally studying and loving? Go here: http://www.milesbeckler.com/fb
Whether you are just getting started or even if you are already successfully running Facebook ads, this $5 Facebook Ad stratgegy will hep you take your FB Advertising to the next level while minimizing your risk!
If you are on the go and you want to listen to the five dollar per day Facebook advertising strategy in podcast format, here you go!
This is used successfully as an advanced tactic, so don't think this is simply beginners only. It is a budget based idea, but I'm going to teach you how to leverage the $5 Facebook ads so you can advance.
The two biggest reasons why this method works for beginners and advanced Facebook marketers alike is that you minimize your risk while increasing your potential to find new audiences and demographic segments to market to.
If you create your ad set, you've got a campaign going, and all you can afford is five dollars per day, that is truly enough to begin marketing.
The big questions is…. How fast are you going to receive results?
Note, if you are an advanced Facebook advertiser, I go deeper on how this applies to you, in a minute…
If you are only able to spend $5 per day total, you're essentially saying that your budget is limiting you, therefore, you’re willing to be patient in order to see the results.
Because if you are getting 10 cent clicks at $5 per day, you can expect to see about 50 clicks per day.
Considering that it takes one thousand clicks to run a successful split test…. That's one thousand per variation.
If you're running a split test on your landing page, you're going to need to wait to see approximately two thousand clicks in order to have statistical significance on which one wins.
You run five dollars a day and hopefully you're getting ten cent, or less, clicks. If you are, that's essentially going to take ten, 20, up to 40 days to get 2000 clicks.
Now, can you make a decision based on statistical data sooner? Sure. If the numbers are incredibly skewed to one side or to one variation and you've got 500 clicks, you can consider making a decision.
But the Law of Large Numbers proves that you need to wait until you have a large sample size to make sure that the numbers are reliable.
If you're not making statistically significant decisions on your split tests, you're potentially making decisions based on the wrong data.
The trade off, if you're entering this point with only a $5 a day budget is patience. You have to simply be patient to get the number of clicks to see if something's working.
The good news? It’s a cup of coffee a day. The bad news? It's going to take you a few weeks to get some good data. But if you're putting your first funnel or ad set up and you just want to dip your toe in the water, start with a five dollar add set.
The bad news? It's going to take you a few weeks to get some good data.
But if you're putting your first funnel or ad set up and you just want to dip your toe in the water, start with a five dollar add to set.
With a $5 per day budget, do not run a split test on your advertisement. Run one static ad. Try to make it a long-copy, story based ad. Base it on the ads of people in your niche who have done really well.
If you haven’t seen my ‘Spying on your competitors ads,’ check it out here.
At the risk of repeating myself, it is so very important that you model the kinds of ads that have worked well for people in your niche. This way, it has a high likelihood of working for you.
Once you begin your campaign you want to make sure that you have spent as much as you will potentially earn with one sale from your OTO.
Example: I just launched a new funnel and at this moment my average order value is about $60.
What would I do with a five dollar campaign? I would let that run until I spend at least $60 before I decide whether it’s going to work or not. If I spend fifty-nine dollars in ads and then, on that $59.50 click I see a sale, I break even.
If I spend fifty-nine dollars in ads and then, on that $59.50 click I see a sale, I break even. And to me… Breaking even is a total WIN!
If I turn the ad set off at $30 or $40 of spend, when I potentially earn $60, I could be basing a decision on too little information.
I could be shooting myself in the foot because that first sale could be right around the corner.
The average order value is my monitoring mark. I do keep an eye on my cost per lead before I have any sales, too.
You need to know what kind of numbers you expect or what kind of numbers you need to see from your campaigns in order to be break even or profitable. It’s all based on data and statistics.
We call these your ‘Key Performance Indicators' or ‘KPIs'
If you don’t know your Key Performance Indicators, check out my Know Your Numbers video.
A real business is one that spends money on advertising and turns that into paying customers.
A scalable business is one that knows exactly how much they can spend per new customer and what audience segments are able to deliver customers within that KPI, so they can flow all advertising dollars to the adsets that are proven to work!
Let's step up the game here and get a little bit more advanced.
Personally, I use five dollar a day ads on Facebook still, for several reasons… None of which are budget limitations.
I am mainly focus my five dollar ads sets to test new ad sets and more specifically new audiences. The goal is to come up with 30 different ad sets.
When advertisers are starting out, the goal is to come up with 30 different ad sets you want to test. If you haven't found your most relevant ad sets, check out my video on the Audience Insight Tool where I show you how.
Advanced marketers need to get really meticulous about how they are marketing to new audience segments and need to find out quickly which of these different ad sets are outperforming the others based on your KPI's.
This is where you start with the five dollar ad sets!
Here is my approach: I am always keeping my tried and true ads running because I know these work and bring me leads and customers within KPIs.
But I'm always trying to expand my audience. I always want to grow my reach to targeted audiences that have a high likelihood of wanting to buy my products.
Facebook has over 1.9 billion monthly users and I'm marketing to a few million.
There's a very large opportunity here for me, but I don't want to go moving large amounts of money around while testing these new audiences.
I don't want to jump in with $100 or $200 a day on something that's not tested because odds are I'll lose my shirt!
So I do my research and use the audience insight tool to I find new ad sets that are relevant and worth testing.
I usually focus my research on my competitors.
I'm looking for people who have really strong overlaps with what my niche is. If I think there's a good potential of that becoming a new profitable interest for me, I will duplicate one of my ad sets.
I set up a five dollar per day ad set and focus that on one new audience segment and leverage the same ad that I've currently got running successfully to other adsets.
It is important to run these new $5 ad sets to an advertisement you know already works so you are only putting one new variable in place!
Same funnel, same ad, same everything else. And I'm only spending $5 a day on this one new ad set and one new audience!
To follow along in a video where I setup a campaign for this $5 Facebook ads strategy, watch this video below where I setup a retargeting campaign in this manner and show how to duplicate the campaign to add additional $5 per day Facebook ad sets.
Let's say I want to increase my budget by $50 a day. I want to scale a little bit but I don't want to scale to the audience as I have.
I want to try to scale into the unknown; into a new territory of audiences.
Here is my work-flow:
I start by finding ten new interests in the audience insights tool that I feel have the highest likelihood of creating leads and customers for my business.
Then I separate them out and start ten new ads sets… $5 per day each.
I duplicate these ad sets from my campaign that’s currently running successfully and simply change the audience at the ad set level.
This process gets repeated for every new audience segment I'm testing.
Then, the job is to go enter the separate interests in each of them and point them all right back to that same advertisement.
This gives me a very effective, neat, and tidy split test on that Facebook's audience interests through the ad set level.
Once launched, it is important to monitor how are each of these ads are doing.
The goal is to make very intelligent decisions based on real data in order to decide whether a new audience and ad set is working or not.
Personally, I'm willing to go a little over my ‘new customer' budget if my cost per lead is within KPI.
I'm playing the game a little bit more aggressively. As long as my cost per lead is good, I know that lifetime value of a lead and I'll willing to be patient with my ad spend and nurture the leads.
So I will spend about $80 which is up to 16 days of $5 per day.
(If you are wondering where that $80 number came from… That is one of my KPI's that is proven based on past experience… This is a part of knowing your numbers, which we discussed above!!!)
So I let the new ad sets run for about two weeks and I monitor the KPI's along the way.
Starting out, I monitor my cost per lead daily until I've spent enough to expect a sale (spend $80 if I earn $80 per sale). If my cost per lead is within my standard operating area, I'm good.
Once I've spent $80 (whatever your average customer value is), I make an exectuive decision.
If I have not seen any sort of transactions come through from those ads, I turn them off. I mark it off of my list and I keep monitoring the others.
If I have seen paying customers come through this ad set, I will keep it running and consider scaling the ad spend…
Once I've gone through that process of removing the ad sets out of KPI and deciding which to keep with those ten, I now have some new ad sets that have proven to work added to my standard campaign!
I can now repeat the process from the beginning… Again starting with research in the audience insights tool to find new interests to test.
In the below playlist I show you exactly how to analyze each Facebook ad set's performance and how to decide whether to scale the individual ad set or shut it down.
The playlist has 4 videos, one per week tracking the same campaign and ad sets as I continued to get more and more data going through them, so it is extremely comprehensive at showing you how to analyze your facebook ads success.
Start with small budgets to test the audience first and only spend more on ad sets that have proven to work.
Spread your money out really thin to minimize your risk and when an ad set works you know that there's a high likelihood it's going to work again.
When ad sets don't work, you’ve only lost small amounts of money in gathering that data!
What I’m talking about here is the minimum viable campaign or the minimum viable ad set that you could run on Facebook. That's going to deliver results.
This method works for me and many other great advertisers on Facebook… It takes patience and discipline, but allows you to make data-driven decisions which is key!
After this new set of interests that I've just tested is done, some are gone some stay in and keep running. Now what do I do? I go right back into the audience insight tool and look for more interests that I've never tested before and repeat this process.
Slowly but surely I'm collecting ads that generate customers for me. Then I increase my spend on the ones that work.
Little by little letting go of the ones that don't work. I'm never really risking a lot of money. I'm never risking a situation where I'm all in on one thing. Spread your wagers out across the table.
If you are trying to go from good to great and thinking, ‘OK. I've got a few ads working in this area but I can't reach out in these other sectors very well.’ Try this approach!
See if you're able to slowly bring in new interests that work for you.
You don’t have to limit yourself to interests.
You can also do this with look-alike audiences and get really granular in your testing at this level. If you're a spreadsheet person and you're really analytical this is absolutely for you.
You can test a look-like in Australia versus a look-alike in the UK versus a look alike in Canada versus a lookalike in the USA. You can get data that will tell you where you’re getting the best results from.
Cool. Turn off the ones that don't work. Add those budgets to the one that does work slowly
If you have an authority website that receives volumes of organic traffic, you could retarget people based on what pages or topics they see on your site… Starting with a $5 ad set on each topic segment.
You could create a separate audience for people who have read articles about subject A and then you could create a separate audience for people who read articles about subject B.
Then you set up a split test against A and B to start getting statistical data that tells you that people who read article A( or articles about Subject A) on your website have a much higher likelihood of becoming a customer.
For five dollars a day, you learn that you can bring more people who are interested in topic A to your website. Then take that information and apply it to your content marketing campaign.
When you get these data points that really pinpoint the kinds of people, topics, and interests that deliver you customers, you now know how to build out your content marketing. You understand more about the ad copy that you're running.
You really start to get specific with what's working.
Do more of what works!
Minimize your risk while you're testing. Do more of what works. Let go of what doesn't. If it takes 100 ad sets over the course of the next few months in order to find five campaigns that you can run every day, at $20 a day, and break even, guess what?
You've just stumbled upon that magic recipe that's going to allow you to quickly grow your list and build your audience through the lifetime value of those people on your list.
You're going to be able to build a statistically significant business.
I really want to help you get there. If you're just starting out, know that there's room for you to start with a $5 day budget with Facebook advertising. And, there's a high likelihood that, with some patience, you're able to turn that into positive split tests on your pages.
When you start to see things that work at that $5 a day level, inch it up. Get it up to $10 a day. If it keeps working for another week at $10 a day, inch it up! Try it $15 a day.
If your numbers get skewed, you can back it back down to $5 a day if you need to. That's the trick of the game.
If you're already running lots of ads and feel like you've hit your ceiling in your audience, implement this. If you feel that you don’t have any new audiences to tap into or you feel like you’re spending as much as you profitably can, implement this method immediately.
Find ten to 30 new interests and run a $5 day ad set for each of those to an advertisement that you're already running that is proving to work with another audience. You don't want to start putting new ads onto these new audiences.
You want one variable at that point. Let the ad sets run until you would normally reach your average order value. Then make an executive decision.
You can monitor at the three, five, and seven-day marks. Monitor your cost per lead KPI. If you're used to getting dollar leads and a new audience is bringing you five dollar leads, obviously you could turn that off after day two or three.
The numbers do change a lot on the first few days with small budgets. Facebook has a small amount of ammunition to work with. It can take two to four days for them to find you those .50 cent leads.
You might see your cost per lead going from $2.50 to $1.00 to .75 cents over the course of a couple of weeks.
This goes back to that idea of, ‘make your decisions based on statistics that have significance.
If you don't have a big enough sample size to get enough data to make a good decision, you can potentially turn off assets prematurely.
I generally err on the side of running things a little bit longer than I should just because I've seen an ad that doesn't work and all of a sudden, on day nine, two sales pop in. This completely changes all of my KPI’s.
Now it's within metric. Had I turned it off at day seven, I would never have seen those two sales. Now, it's a profitable ad set for me and a profitable ad for moving forward.
It’s a great way to start.
It's a great way to grow if you've already started.
It takes patience and discipline, either way!
You need to track what you’re doing and what's working. Keep adding functional ad sets that work for your campaigns and eliminating those that aren’t working.
Focus 80% to 90% of your marketing budget on the ones that have proven to work and then focus that 10%-20% on testing new ones that might work.
Miles is a full time internet marketer who sells information products and a niche membership program with his wife, Melanie. Together they have created a lifestyle business that allows them true location independence and this blog where you get to see behind the scenes and see how they have built their online business from scratch.