Chasing ROI vs Building a Relationship
For those that didn't see the news, Airbnb recently announced that it would be suspending all of it's marketing activities for 2020 in order to save $800MM. They aren't alone in this activity as many brands are slashing their budgets, which seems to make sense given that consumer spending is expected to drop. "Why run ads to people who can't buy stuff today? We can simply reactivate ads once this is all over..."
This all tracks to how the industry has been running in recent years. With the increasing number of ways to track and measure performance, advertisers have been aggressively chasing ROI/LTV (especially with the rise of disruptor brands). This is a very logical and financially sound line of thinking, and one we would promote actively during normal times.
But these are no where near normal times. The world is going through a huge amount of turmoil and societal change, and it is during times of change that business and industries are won and lost.
Right now it's more important than ever that brand's don't chase the easily trackable x-day post click sale, and instead take a moment to remember the true purpose of marketing -- to build a relationship.
A recent article in Fast Company did an excellent job at highlighting this issue:
How much a brand invests in maintaining the relationship with its customers during the crisis defines its long-term success. In the case of Airbnb, this means keeping both sides of its marketplace (the hosts and the renters) going. If hosts lose revenue and feel unsupported by the company, they will leave (and many of them already are) and may not come back.
...how [brands] allocate their marketing budgets at the moment (and how much they cut them) should reflect the shift from spurring demand to maintaining the customer relationship. Otherwise, marketers are in danger of losing the connection with their customers, as the Airbnb ordeal shows. Marketing cuts deprive a brand of any still existing sources of revenue, like through email marketing or social commerce. They also fail to mitigate the damage of a negative impression.
By turning off all marketing activities, Airbnb turned off their ability to maintain a relationship with both their supply and demand side customers. The $800MM sounds like a lot of savings, but how much will they have lost in the years of marketing done to attain those people? How much more expensive will it be to try and turn that engine back on to regain the attention and trust of those people?
We're not saying don't make cuts. There is likely a strong business necessity to reduce costs in various places. But this time can also be a huge opportunity for brands to strengthen the relationship with their customers. To find a way to be authentic and demonstrate that your brand values and identity are aligned with your customers. That your brand can be more than simply a service that sells a widget.
Brand communication has to acknowledge what consumers are going through and what they need right now.
There are some great recent examples of brands that understand their brand voice, who their audience is, and what that audience would need during this time. Our favorite examples in the market:
- Nike - "Play for the World" campaign and "You Can't Stop Us" (highlighted above)
- Levis - Launched 5:01 Live (great tie into their core 501 jeans line) which leverages their music connections to promote social distancing at home with live entertainment and donations going to various charities
Now these are clearly well established and defined brands in the space. But they know their voice, the identity they've built over years and years, and they delivered content that is aligned to what their audience is experiencing today. What is your brand voice? Who is your audience outside of demo and HHI? What is their unique experience during this time and can your brand deliver on a need they have?
This is an opportunity for brands across verticals to capitalize on the shift from products to content, from physical stores to virtual membership, from transactions to inspiration, from buying to socializing. Brands should consider it a necessary—and holistic—business adjustment.
The easy path is to simply treat advertising like a cost center and cut budgets during difficult times. This is a short term mentality and one that will inevitably hurt your business in the long run. Take this time to push reset on your marketing. Shift your focus from short-term performance and build a true relationship with your customers. This is how advertising can become a profit center for your brand, and will keep moving forward in good times and bad.
Begin to optimize for resiliency over efficiency and reap the benefits when your competitors are few and far between.
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Thanks to Kelly Sikkema for sharing their work on Unsplash
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Facebook Ads Bidding Strategies can either make or break your advertising campaign. If you've been struggling with getting the best results, understanding the benefits and drawbacks of each strategy can save you both time and money. The right bidding strategy can help you reach your target audience more effectively and get the most out of your advertising budget.
Each bidding strategy has its unique benefits and challenges. Some are great for maximizing visibility, while others prioritize cost-efficiency. Choosing the right one depends on your specific goals, whether that's more clicks, better engagement, or higher sales. Knowing the pros and cons of each strategy will help you make informed choices that benefit your business.
This article will guide you through five key Facebook Ads Bidding Strategies. You’ll learn about their benefits, drawbacks, and how to pick the one that suits your campaign objectives. By the end, you’ll have a clear understanding of which strategy will help you achieve your advertising goals effectively.
Understanding Facebook Bidding Mechanics
Facebook bidding is essential for advertising success. It involves auctions where advertisers compete for ad placements. Understanding key elements like Auction Dynamics and Different Bidding Strategies is crucial.
Auction Dynamics and How Bids Work
In Facebook's auction, ads compete based on bids, estimated action rates, and ad quality. Bid represents how much you're willing to pay for a specific action (like clicks, views, or conversions). The Cost Per Result adjusts based on competition.
Bid Cap lets advertisers set a maximum bid. This ensures spending control but may limit campaign reach. Meta bidding strategies, like Lowest Cost and Target Cost, help optimize for specific goals, balancing cost and performance.
Factors influencing the auction include:
- Bid amount
- Ad relevance
- Estimated action rates
Exploring Different Bidding Strategies
Advertisers can choose from several Facebook bidding strategies. The Lowest Cost strategy aims to get the most results for the lowest price but may lack spending control. The Cost Cap strategy helps maintain an average cost while driving results.
The Bid Cap strategy is useful for high-control needs, letting you set the max bid per action but it might restrict delivery. Target Cost aims for a stable cost per action, ideal for steady budget planning.
Choosing the right strategy depends on your campaign goals, budget, and desired Cost Per Result. Evaluate each option to find the best fit for your needs.
Implementing Bidding Strategies for Campaign Success
Successful implementation of bidding strategies can drive better results and optimize ad spend. Key factors include setting appropriate bid caps, maximizing returns using ROAS goals, and balancing volume and value.
Setting the Right Bid Cap for Your Campaign
Setting the right bid cap involves determining the maximum amount you are willing to pay for a result. This ensures costs don't exceed the budget. Bid caps can help control spending and improve efficiency.
- Analyze past performance: Review historical data to identify the highest bid that achieved desired results.
- Adjust as needed: Be flexible to change bid caps based on real-time campaign performance.
- Consider the competition: Higher bid caps might be necessary in competitive markets.
Maximizing Returns with ROAS Goals
Use the Return on Ad Spend (ROAS) bid strategy to drive maximum returns. ROAS goals ensure that every dollar spent on ads generates a specific amount of revenue.
- Calculate target ROAS: Set a realistic ROAS based on past campaigns.
- Monitor and tweak: Regularly check ad performance and adjust your ROAS goals to meet revenue targets.
- Balance quality and cost: High ROAS might limit reach, so find a balance between cost and quality.
Balancing Volume and Value in Bidding
Balancing volume and value helps achieve the right mix of reach and profitability. Consider using both Highest Volume and Highest Value strategies.
- Highest Volume: Bids are set to get the most conversions, good for awareness and large-scale campaigns.
- Highest Value: Focuses on getting the highest-value conversions, suitable for targeting high-value customers.
By carefully implementing these strategies, advertisers can meet their campaign goals effectively.
5 Facebook Bidding Strategies: Benefits, Drawbacks, and Selection Guide
Static ads and dynamic ads serve different purposes in the world of marketing. Static ads are simple and stay the same at all times. They are easy to create and can be effective for straightforward messaging. But dynamic ads offer customization, changing their content to fit the audience's preferences and behaviors.
Dynamic ads might seem complicated, but they bring better results by targeting specific groups with personalized messages. This means higher engagement rates and more conversions. Static ads, on the other hand, are less effort to produce but may not capture attention as effectively.
Deciding between static and dynamic ads depends on the brand's goals and resources. Each has its strengths and can be powerful if used appropriately in a marketing strategy.
Understanding Static and Dynamic Ads
Static ads and dynamic ads serve different purposes in digital marketing. Each has unique features and benefits that cater to varied marketing needs.
Exploring Static Image Ads
Static image ads are straightforward. They are typically still images that do not change once created. These ads are ideal for conveying a clear, unchanging message or brand image.
A static image can include text, graphics, and logos, and is often used on websites and social media platforms.
Advantages of Static Images
- Consistency: The message remains the same, which can be useful for brand recognition.
- Simplicity: They are simple to create and often cost less than dynamic ads.
- Predictability: Once the ad goes live, what you see is what you get.
Unpacking Dynamic Advertising
Dynamic ads are more complex. They can change content in real-time based on user data and behavior. Unlike static ads, dynamic ads can alter images, text, and calls to action depending on who is viewing the ad.
Benefits of Dynamic Ads
- Personalization: Content can be tailored to each user, potentially increasing engagement.
- Flexibility: They can show different messages to different audiences without creating multiple ads.
- Efficiency: They adapt to user preferences, making the ad experience more relevant.
Comparative Analysis and Use Cases
Static and dynamic ads offer different benefits and limitations. This comparison will help you understand where and how to use each type effectively in your marketing strategy.
Static Images Vs. Videos
Static images are simple and quick to create. They load faster than videos, which is great for mobile users and slow internet connections. They allow for clear, focused messages without distractions.
Videos, on the other hand, capture attention better with motion and sound. They convey more information in a short time. Videos are more engaging and can demonstrate products or services in action.
Leveraging Opportunities for Static Ads
Static ads are useful in various scenarios. Billboards are a great example, as they need to be read quickly. Print ads in magazines and newspapers also benefit from static images. Online banners are often more effective when static, as they load quickly and are less intrusive.
Static ads are best when the message is straightforward. They work well for short calls to action like "Buy Now" or "Sign Up." Visually, they should be clean and uncluttered to convey the message quickly.
