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Wednesday, June 17, 2020

Does Facebook Advertising Work?

Maybe you’ve seen an ad from one of your competitors as you scroll through your Facebook Newsfeed or you’re considering leveraging Facebook ads to boost your business’s reach and conversions.

Or maybe you’re already dabbling in Facebook ads.

Either way, as a business owner you’ve probably found yourself asking: Do Facebook ads really work?

It’s a perfectly reasonable question to ask, regardless of how familiar you are with paid social. The short and easy answer is: Yes. Facebook ads work and they work incredibly well.

And while I could leave it at that, I wanted to use this opportunity to explain why social advertisements have become an integral part of a business’s growth today.

I can 100% vouch for this - If a business has not established its presence on social media, it will lose out on customers.

In this article, I’ll cover:

There’s alot of groundwork to cover so let’s dive in.

Facebook has seen a steady growth of its user base since 2012. With the number of active users surpassing one billion in the third quarter, it became the first social network to ever do so. Eight years later, its monthly user base has continued to grow to almost 2.5 billion making Facebook the biggest social network worldwide.

Credit: Statista

If everyone and their grandmother is on Facebook - your business should be there too if you want to expand your reach.

The real trick to executing a paid social strategy is understanding how to leverage Facebook ads effectively.

While there are businesses that believe in the power of paid social, we also have the skeptics. According to a survey, 62% of business owners said their paid ads on Facebook were missing the target.

Do we agree? Does no one click on ads? Absolutely not.

In 2019, Facebook recorded a revenue of 70.7 billion US dollars, the majority of which was generated through advertising. This is 55.8 billion US dollars more than the previous fiscal year. Someone’s clicking.

Facebook’s immense reach makes it also highly influential - in October 2018, 23% of respondents stated that the leading digital channel that influenced their decision to complete a purchase was Facebook.

While the king metric people measure with Facebook ads is ROI, it’s worth remembering how ads help build social connections with customers.

Facebook ads give you an opportunity to attach a face, name and personality to your brand. It allows you to have one-on-one conversations with your customers and help solve their everyday problems. In return, your customers are more likely to remember your brand and share it with their own connections.

Now that we’ve validated why your business needs a paid social strategy, we need to understand how Facebook ads work.

How do Facebook Ads work?

In its entirety, Facebook ads help businesses find prospective customers. The platform allows you to target specific audiences that are likely to be interested in your products by leveraging the immense wealth of data it has on its users.

Facebook then uses an auction to determine the best ad to show to a person at a given point of time. The winning ad maximizes value for both people and businesses.

Although the delivery system might seem similar to Google ads and Bing ads, there are a couple of elements that are unique to Facebook advertising. Understanding these elements can help you improve your ads performance.

To ensure that the winning ad maximizes value for both people and businesses, the winner of the auction is the ad with the highest total value. The total value is a combination of 3 major factors:

Illustration showing Facebook advertising formula

Together, estimated action rates and ad quality measure ad relevance. The delivery system subsidizes relevant ads in the auction, so relevant ads often cost less and see more results. In other words, an ad that’s relevant to a person could win an auction against ads with higher bids.

For more on how Facebook’s ad auction works, read their Business support documentation.

How Facebook ads have worked for businesses

Now that we know how Facebook advertising works, I’ve compiled a list of 2 great case studies that show how different businesses have succeeded on the platform.

Even if your company has a lower budget or sells different products, I hope these case studies will inspire you and give you creative ideas for your own scalable Facebook strategy.

Beachbody success story:

Beachbody is an at home fitness solution which offers on demand exercise programs and nutrition plans to help people get fit, get healthier and lose weight - all without signing up for an expensive gym membership.

They wanted to use Facebook ads to drive subscriptions to their workout streaming platform all while lowering their acquiring cost.

They partnered with an agency to create a campaign targeting a broad audience of US and UK adults between the ages of 18-54. The team used Beachbody’s existing list of customers to create powerful lookalike audiences and delivered tailored messages to these multiple groups.

The campaign featured multiple video ads and two photo ads. As weeks progressed, the image ads accounted for half the overall spend and drove 30% lower cost per acquisition than video assets.

The business also saw a 72% increase in subscriptions compared to the same time of the previous year.

Bottega Veneta success story:

Bottega Veneta is an Italian luxury goods and high-fashion brand best known for its men's and women's ready-to-wear clothing, leather goods, handbags, shoes, jewellery, accessories and fragrances.

Their goal with Facebook ads was to boost brand awareness, attract new potential customers and ultimately increase sales conversions.

Bottega Veneta partnered with an agency to run campaigns that took customers through an entire sales journey - from being aware of the brand at the top of their sales funnel to drilling down and converting prospective buyers.

Their campaign used video ads and hypnotic storytelling to increase traffic to their website. Each ad was gender specific - ads aimed at men featured a variety of bags and accessories while those aimed at women featured a mix of products. Each ad also had a ‘shop now’ call to action button that encouraged people to make a purchase.

Based on the reporting data from Facebook’s ads manager, the campaign drove a 2.3% lift in online products added to cart and a 68% incremental lift in sales.

How you can make Facebook ads work for your business

Now that we know how massive the population is on Facebook and how different businesses are leveraging ads to drive sales, I’m going to talk you through on what you can do to make Facebook ads work for your business.  

Develop a customer journey

If marketing has one goal, it’s to reach customers at moments that influences their decisions the most. It is why began offering targeted product recommendations to consumers already logged in and ready to buy.

In a traditional marketing journey, customers start with a set of potential brands and methodically reduce that number to make a purchase.

This is different to social marketing where the customer journey is a series of touch points and impressions which when accumulate shape buying decisions.  

Hence as a business, it is your job to recreate this customer journey within your Facebook ad campaigns.

You need to have multiple campaigns, each with different objectives that target audiences with varying levels of intent.

The good news is that Facebook helps you with this right out of the gate. Here’s how you can use Facebook’s objectives to serve all 4 stages of your sales funnel:

Image source: FSCinteractive

Awareness: Create a brand awareness campaign to promote your products to an audience who has never heard of your business.

Consideration: Target those who are familiar with your business’s offerings and direct them to your product pages using the traffic objective

Conversion: Recapture past visitors and actively pursue them to purchase using dynamic product ads.

Loyalty: Get existing customers to purchase new arrivals of products from your store by using the conversion objective.

Learn to measure success

Now that you’ve developed a customer journey, it's important to measure what success looks like for your business.

At every stage of your funnel, you’ll want to start tracking your key KPIs so you can prove your social media efforts are fruitful.

For example, if generating revenue was your main goal, a low click through rate doesn’t accurately measure whether you were successful or not.

Rather focus on ROAS (return on ad spend) to understand revenue that is produced compared to what is spent to acquire a customer.

Invest time and money

Let's get one thing straight - Facebook is the kind of thing that needs to be done right or not done at all.

There is a massive potential to grow your business using Facebook, but if you don't commit the time and resources to test the platform, you will fail.

Many business owners are of the mentality that they don’t need to spend money to make money. This is further from the truth.

All businesses have to invest capital first to start seeing profitable returns. Facebook is just another tool businesses need to invest in strategically to decide whether it works for them.

Know your audience

If you don’t see results that translate into sales from your campaigns, it’s usually because you haven’t done enough testing of your ad copy, visuals or even targeted the right audience.

Are you guilty of only defining your audience by their gender, age and country?

If you’re choosing the simplest criteria to let Facebook know your target audience, you’re going to fail.

Go too wide and you will spend alot of money on audiences that don't convert well. Being too laser specific with your targeting can increase your CPM’s.

You need to have a right balance to define who your customers are, what behaviors they exhibit and what demographics they belong to.

Revisiting your brand guidelines can help with this, allowing Facebook to deliver your ads to only those people who are most likely to want what you have to offer.

Don't go for the cold sale

Do you usually kiss on a first date?

If you’ve answered yes...well done you!

But for most of us, a kiss is usually reserved once we get to know the person better.

It’s the same with ads. Socializing is the new way of selling!

No one is hanging out on Facebook looking to make a purchase.

You want to focus on benefitting your customers first before asking them for anything, especially a sale.

Remember your sales funnel?

Make sure you're building a relationship with your colder audiences at the beginning of your funnel.

Once your prospects are familiar with your brand and you’ve built trust with them, only then can you expect them to go ahead and buy.


Alot of businesses are struggling to make Facebook ads work for them. You don't have to be one of them.

Remember that Facebook ads work.

We’ve already seen multiple success stories of businesses using Facebook ads to drive conversions.

The problem is not with Facebook.

It’s with how you are approaching Facebook.

Treat it like a business partnership.

Create a strategy, determine what you want out of it and how you’re going to measure your returns.

Be prepared to invest more time and money into it if you want results.

As long as you invest wisely, targeting the right audiences with the right messages, you will see a positive ROI.

Facebook wasn’t designed as a place to cold-sell customers.

It is social media. Connect with your audience. Build relationships. Be social.

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