Reach & Frequency for Direct Response
As innovators, we are always on the hunt for growth hacks to provide to our clients and the market. Now that it is August and Q4 is less than 6 months away, we bring you an often overlooked product of Facebook - Reach and Frequency.
Background
Typically, when buying media on Facebook, an advertiser is greeted by the following screen.
Marketing objectives is the first step to building cost effective advertising on the platform. It informs the system what type of behavior you want to see from someone interacting with your ad. The conversion objective goes after people who click and buy things online. The traffic objective shows ads to those who just enjoy clicking on ads.
An advertiser can also go around all the knowledge of the algorithm and buy on Reach and Frequency, R+F. Typically, this is considered the domain of branding rather than direct response.
What we want to discuss is a growth hack that originated in 2014 from Facebook's Tel Aviv office for their eCommerce clients - R+F for direct response. It is now leveraged by some of the largest eCommerce companies on the platform and we hope by our readers this holiday season!
A Quick Refresher
As discussed in previous articles, APM or Actions per thousand impressions is an incredibly useful metric. Furthermore, we can compute CPA or ROAS by leveraging this metric.
CPA = CPM/APM
ROAS = (APM*AOV)/CPM
For the purposes of this discussion, it is important to note that lowering CPM has a direct impact on either decreasing the CPA or increasing ROAS.
Another byproduct of these equations is understanding that rates of change matter as well. For example, take CPA. If you decrease CPM by 20% and APM by 10% you will still achieve a lower CPA. (A similar logic applies to increasing ROAS if AOV is held equal in both cases.)
The Why
Now that it is August, you can book Black Friday 2020 R+F blocks. The benefit of locking in R+F blocks early is that Facebook prices these impressions at incredibly cheap price points.
Using a 5% LAL as a guide, Facebook shows a $8.04 CPM for Black Friday week!
This is well below what CPMs will be during the time period as every eCommerce marketer is in the space pushing up market prices. As a general heuristic, you can typically expect R+F to be about 30-40% cheaper than auction during this key time period.
Results will vary; however, checking is quite simple. Choose a specific audience to look at 2020 R+F pricing and compare to your 2019 Q4 pricing.
The How
Now that we understand this can be an effective way to reduce price during a key time period, the execution is the most important part with R+F. This tactic must be leveraged on audiences that are already high performers for your brand. Dynamic Ads for Broad Audiences would be a bad use case here. On the other hand, a Website Custom Audience of abandon carters would already have a high conversion rate where lowering the CPM would drive up either ROAS or decrease CPA.
Choosing the right audience is key to gaining efficiency with this tactic. Essentially, leverage R+F on audiences that you are confident will have consistently high performance rates.
Even better, R+F has no penalty to cancel! So if the campaign begins and performance is not where it is needed, then simply cancel the campaign and focus budget on your other efforts.
Caveat Emptor
With growth hacks it is important to understand several implications. Gaining a drop of 30 - 40% in market pricing is going to take a bit of sweat equity but we believe the juice can be worth the squeeze.
To pull this off, all it takes is proper planning and understanding of the product.
Here is a starter list of several considerations.
- R+F front loads the purchase to ensure it hits the impressions bought for the length of the contract. This is important to note as in the case above, it would not spike impressions on Black Friday but more than likely have its highest impression block on Monday, followed by Tuesday, etc. This is easy to remedy with shorter campaign purchases.
- CTRs, and maybe CVRs depending on the audience, will decline as opposed to the auction. This is expected and is remedied by testing out this strategy on a smaller scale prior to key periods.
- Audiences need to be over 200,000. If you are a large eCommerce company this should be easy to test into. For smaller brands, testing on a 1% LAL which is showing fantastic performance already in auction can be a great place to start
This year has already been volatile and with an election preceding Black Friday, it will probably only become more so. Having part of your advertising budget secured can be a helpful tool to reduce volatility and gain a competitive advantage in your market.
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Thanks to Jamie Fenn 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.
