First of all, Facebook ads mistakes are COMMON. I’ve personally fallen victim to each and every single one of them at some point in my advertising journey. So no stress! I’ll go over how I caught them, what they were, and how to fix them too.
There is no doubt that digital marketing has done more to even the playing field between large corporations and simple household businesses. More specifically, Facebook ads due to a combination of low advertising costs, accessibility, and the most sophisticated niche-finding algorithms in the world.
Now, I’ve been running Facebook and Google ads for YEARS, (5 years, in fact) and I’ve worked for businesses that sell both low-ticket consumer goods and businesses that sell high-ticket consulting and coaching services.
Well, guess what? Despite your offer, businesses, niche, or product/service, there are 5 common Facebook ads mistakes that I’ve seen hold businesses back OVER and OVER again. So, today I’d like to talk about what they are, and how to identify them!
If you’d like a more personal touch for your business needs, please schedule a free consultation with Austin by clicking the button below… Otherwise, read on and enjoy!
Facebook Ads Mistake #1: NOT Considering CLTV (Consumer LifeTime Value)
LTV (Lifetime Value) is defined as the net amount of money that a customer/client will spend on your products or services over the lifetime of your entire relationship.
Here’s why LTV is SO important for advertisements, and I’ll explain it in terms of a real case-study for a business that I’ve helped so you know the REAL power it has to transform your advertising practices.
I once worked as a digital marketer for a small consumer services company specializing in grooming and personal hygiene. We had an innovative product that solved many common market issues. We had a clearly defined niche and an audience who loved our products despite the fact that we cost more than the competition.
Yet, we still lost market share and were constantly outbid on our digital advertisements. We knew this was true, because despite having a larger profit margin (and therefore more money to spend per click than our competitors on Google) we were being outbid by competitors with lower profit margins.
Generally what this means is that our competitors are incurring an initial loss to gain a new customer. This customer then proceeds to spend more money over the lifetime of their relationship with our competitors, creating a net profit over time.
Without determining what your CLTV is, you will…
- NOT become a competitive force in the marketplace.
- NOT know how much you can spend to gain a customer/client without losing money in the long run.
Here’s a simple way to determine your CLTV:
- Calculate average purchase value: Do this by dividing annual net revenue by the number of purchases for the same year.
- Calculate average purchase rate per customer: Do this by dividing the number of purchases by the number of UNIQUE customers who purchased over that time frame.
- Calculate Individual Consumer Value: Multiply the average purchase value (#1) by the average purchase rate (#2).
- Calculate Consumer Lifespan: Average the number of years a consumer continues to purchase your goods/services.
- Calculate CLTV: Simply Multiply Customer Value (#3) by the average customer lifespan (#4)
Once you have that number, use the same calculations to determine the total COST (by replacing revenue with costs) of fulfilling that consumers goods or services. This should give you the CLTC (Customer Lifetime Cost of fulfillment)
Subtract CLTV by CLTC and determine how much net profit you make per customer.
Use that net profit as a guide for how much money you can spend on digital advertisements before incurring a loss.
To be more competitive in the digital marketplace, multiply your advertisement conversion rates by your net profit per customer and see exactly how much you can bid per click before incurring a loss!
Facebook Ads Mistake #2: Creating Low-Quality Audiences
One of the most common Facebook ads mistakes is based solely on the Facebook ads quality score.
Most often, a marketer who sees the “low-quality” tag on their Facebook advertisements will assume that the problem is with the ad creative or copy itself.
However, there is another sneaky culprit that may be flying under the radar. Your audiences.
Facebook allows us to specify the location, interests, age, and demographics of the audience we want to target. Very often, the true issue is not an ad, but the audience that ad is being sent to.
For a long time, I offered a rather large and comprehensive course on the basics of money management. I targeted this course to the people I believed could benefit most and find great value in it, college students.
I did this because, at the time, I had just graduated and was thrust into the world of money management where I had no education, no experience, but all the willingness to learn, so I did.
I wished to share that knowledge with others who were not given that financial education. Therefore, I developed a full course and advertising funnel that would target college and university students.
I never sold a course.
I asked my friends to read my ads, they thought the ads were brilliant, but Facebook didn’t.
I was rewarded with a “below-average” ad quality score and not one sale, all boiling down to two main factors.
- College students HAVE NO MONEY with which to buy expensive courses (considering they take out formal LOANS just to attend college).
- My offer was too expensive for my audience.
So, I ran similar ads with similar ad copy that was targeted to college GRADUATES who were working full time, and boom, far more interest and quality.
So many marketers attempt to change ad copy and creative work when the problem lies in the AUDIENCE that is seeing those ads.
Every time you create a facebook audience, ask yourself these key questions:
- Are these consumers similar to your EXISTING consumers?
- Can these people afford your products/services on a whim?
- Are you providing any VALUE that truly interests them?
- Are they actively seeking the solution YOU provide?
- Is your product/service relevant to their position in life?
These simple questions will keep you on track when creating an audience that is relevant to your advertisements in the first place.
Facebook Ads Mistake #3: NOT taking advantage of lookalike audiences
If you could, in a perfect world, place your advertisements in front of audiences that perfectly mimic your existing customers, and do it all within seconds, why WOULDN’T YOU?
It sounds almost too good to be true, but it most certainly is true with the power of Facebook’s lookalike audience algorithm. And why, in terms of Facebook ads mistakes, you are really missing out when you don’t employ this strategy.
A lookalike audience is exactly what it sounds like, it is an audience that Facebook generates for cold-marketing campaigns using a pre-existing set of rules or conditions that we, as marketers, can create.
For example, let’s say that I’ve seen a good amount of purchases on my website. I can create an audience of people who have purchased something from my website, then use that audience as the model for similar people to target my ads for.
All through creating a “lookalike” audience of similar people to those who have bought from me.
Why is this powerful? Here’s why…
- These people are MOST likely to purchase from you because they are modeled after your EXISTING customers.
- You will be given an idea as to the market size of your audience, meaning you can accurately estimate market value for your product/service by multiplying your audience size by your conversion rate and then multiply that by your average customer revenue.
- Build an audience or following far more effectively by targeting those who take very specific actions on your site (engagement, page likes, etc.)
Can you see why it is SO detrimental to make use of lookalike audiences?
If there was one key of advice to creating a lookalike audience, it is this: Always model your lookalike after an audience who has taken the favorable action that your CAMPAIGN is geared towards.
If you are creating a lookalike audience for a conversion-optimized campaign, Facebook will do best when targeting people whom you want to CONVERT.
Otherwise, you risk losing potential data due to Facebook’s unwillingness to track specific actions based on your chosen campaign objectives.
To create a lookalike audience, first, determine what your campaign is meant to achieve (ex. Conversions). Then determine an action that you can define as a conversion (ex. loading the “thank you” page on your site) and create a “conversion” event in Facebook for that action.
When enough data is collected for Facebook to generate a lookalike audience (around 100 people), you will be able to create a lookalike audience for people who Converted on your site, and then market towards similar people!
Facebook Ads Mistake #4: Not Providing VALUE First
By far one of the most common, and most destructive, Facebook ads mistakes is to run advertisements that are CONSISTENTLY sales-oriented.
“But Austin, we are in the business of making money! We’re not a charity!”
Exactly, you are NOT a charity.
Then you’ll understand that the best way to make the most amount of money is by cultivating an audience and providing value before you ask for value back.
If you wanted to make the most of your advertising dollars, you’d spend them to provide interesting and valuable information to your audience before trying to sell them.
People love to buy, but HATE to be sold. If you sound like a salesperson, say goodbye to any kind of high-ticket sales.
Low-ticket, you MIGHT get away with creating offer-based ads. But they still won’t optimize the CLTV we talked about in mistake #1.
To optimize for CLTV, you’ll need to develop trust and rapport with your target market. You can ONLY do this by humanizing your business and coming across as a useful, informative, casual, NOT NEEDY, business.
Dan Lok says “Needy is creepy.”
And it’s true, why is it that the best way to attract a spouse is by coming across as confident and independent as possible? Preferably, you ARE these things. You become someone that gives before you take, and therefore operates off of a belief in abundance as opposed to scarcity.
Why is it that we value the opinion of someone we KNOW many times more than someone we don’t? Easy, it’s because we don’t feel our friends have an agenda to profit off of us.
Businesses almost always come across as if they have an agenda, and in my experience, ads that I have written to inform and NOT to sell have performed far better. And have created far greater CLTV.
Facebook Ads Mistake #5: Having no medium, or intention, of gathering a following
Here’s where I went WAY wrong when I first started out.
I thought to myself, I’ll just run ads for my product or service, no need for emails, social media presences, individual relationships, or any of the things that ACTUALLY MAKE BUSINESSES WORK.
I was so foolish.
By far the largest mistake I made in the beginning, the mistake that cost me YEARS is attempting to grow a brand without gathering data or any way to get into contact with my marketplace.
All I was doing was advertising. And sometimes the largest facebook ads mistakes have nothing to do with your ads, but with the end-results of your marketing funnel.
Think about this, if I had the momentum to build a 2,000 person email list in the last year. I could have been a millionaire already, but I am not.
An email list is far more personal, marketable, and high-converting than any digital advertisement you could run. Why? Because the people that give you their email are already on a healthy and interested track to trusting you and your products/services.
If they really didn’t want what you offer, they would not give away information that personal.
They become warm leads instead of cold leads, and warm leads convert an average of 858% higher than cold leads of a similar audience (according to Americanagents.com).
How can you beat that? By creating a simple lead-generator that you offer for FREE in exchange of an email, you are not only weeding out the people who are not serious about your offer, but you are also creating an audience of warm leads whom you can retarget and remarket for FREE.
Put simply, having no systems in place to collect customer data for the purpose of remarketing and retargeting is costing you thousands in the best-case scenario, and BILLIONS in the worst.
Here’s a quick article I wrote on how to re-target consumers.
Hopefully, these tips shed some light on your Facebook Ads mistakes and how you can begin seeing higher conversions and greater profits from the most sophisticated targeting platform in the world!
Thanks for reading!
Here’s how to get into contact with me!
-Austin Denison is a management consultant and coach from Southern California and founder/CEO of Denison Success Systems LLC. He is the author of The Essential Change Management Guidebook: Master The Art of Organizational Change as well as The Potential Dichotomy: The Philosophy of a Fulfilling Life, and, the Best-Selling book, KICK*SS Content Marketing, How to Boost Your Brand and Gather a Following.