It seems harmless: why not ‘boost’ that Facebook post for $5?
But I’m here to tell you that not only is this a potential giant waste of money but of your time and effort.
The exercise I am going to propose you do is a complete buzz kill but I’ll do it with you to show you how important it is.
I think it’s important to think of the following numbers related to your business.
Average Sale Price
I have an ecommerce site. After paying credit card fees and expenses, I make about $2/order. (I’m not in it for the money, guys, and I have plans for it, I swear!)
Conversion Rate/Lead to Customer Rate
Of the roughly 3,000 people going to the site I’ve tracked, we’ve gotten 55 orders. So that’s a 1.8% conversion.
Ad Budget And Cost Per Click
Clearly I have some kind of budget per month (let’s say for round numbers $100) but I clearly don’t want to pay more for an ad than I am making so let’s say I’m willing to pay $1/click as a maximum bid.
So let’s stick this in a calculator, shall we? I used this one on Hubspot but just Google ‘Facebook ads calculator’ and you’ll find a ton. I adjusted the sliders and got my result:
It doesn’t take a genius to see that to buy Facebook ads, I am losing money. Which is why for this site I don’t.
And what’s great about the calculator thing is you can adjust certain variables. Like what if I lower the amount I’m willing to pay for a click to $0.50 instead of $1?
Wohoo, I’m losing less money! What if I made $5 per order instead of $2? What if I increased the conversion rate on my website (ie made sure more of our website visitors bought something)? I can see what changes actually move the needle and adjust my website and marketing strategy accordingly.
Now paying $5 for an extra 3,000 eyeballs (ie the boost) doesn’t force you to think about how effective your website is, how good your pricing is, and other admittedly more fundamental questions so I get why you’d do it. But please, stop handing Facebook money and spend ten minutes with a Facebook calculator and your actual numbers. It is totally worth your time as you might be doing a bang up job marketing but people get to your site and don’t buy. You can put lipstick on a pig but you know how that goes…
Why Not Everything Has To Be Profitable
I did this exercise with a potential client and she was totally deflated. She had been holding these low cost events (not unlike our $25/person workshops at Anchorspace) and wanted to advertise them… but with the exercise understood taking out ads would cost her more money than she’d make.
Now I could tell she loved the events so I didn’t tell her to not do the events. And I didn’t tell her not to advertise. What I did tell her is if she was going to keep doing her events, she’d have to stop looking at them as a moneymaker and instead think of them as a loss leader (getting people into her business where they buy other things) or marketing tool (something to get her name out there, regardless of whether people came or not). In other words, not everything you advertise has to make you money directly. But if it’s not making you money, you should have some other reason to do it that makes sense.
(If you like this, I’m doing a Facebook workshop on Friday. You should come, virtually or in real life.)
Facebook Ads can be a great tool but I see so much wasted effort. By knowing your numbers, using a Facebook calculator, and having your non-revenue generating activities have another clear purpose, you will be spending your money and time more purposefully and effectively going forward.