by If you plan to increase your marketing budgets this year and sign up a lot of New Subscribers from Facebook ads this post will be a massive help
I recently touched on this in a previous post and I want to elaborate on it further as I think it will help a lot of people in this group.
One of the biggest problems business owners have when it comes to Facebook ads is increasing spend and actually remaining profitable.
Normally they can get a very good return on investment at a lower spend, but as soon as they try and crank things up their customer acquisition cost goes completely through the roof.
This can be extremely frustrating when it happens as it can feel like somebody is holding your Subscription Box Back.
We have managed to solve this issue in BusterBox and we can now spend a lot of money each month and get thousands of people signed up profitably.
I will now explain to you the 3 main things that are stopping you from increasing your spend and explaining exactly how to solve them.
1. 2% Conversion rate
This is one of the biggest reasons why people can’t increase their ad spend on Facebook and remain profitable. It also has nothing to do with your ads. The issue is the conversion rate on your website isn’t good enough to sustain the increase of traffic and ad spend.
If you want to scale your conversion rate needs to be 2% minimum
Let me explain to you why that is the case. When you are spending a lower budget on Facebook the algorithm is more likely to identify and target the low hanging fruit.
The low hanging fruit are the people who are most likely to buy your Subscription Box. These are people that have sent signals to Facebook in the past to demonstrate that to them. E.G they may be extremely interested in your niche, they may have browsed a competitors website and had their product in their cart or they may have purchased similar products in the past.
I think this is amazing that Facebook can identify these people, but the annoying thing is there is only so much low hanging fruit you can actually target. That’s why when you increase your budget the cost to acquire customers can also increase. Let me explain that to you.
The low hanging fruit are people I like to call In market.
Once you start spending a lot of money you will have to target out of market consumers.
These are people that are less likely to buy your product. There is still a good chance you can get them to sign up, but their purchase intent isn’t as high.
That means you have to have a website that converts well to get those people to sign up. These people are on the fence and you need to win them over by having everything perfect with your website.
If your conversion rate is under 2% you can get away with lower spend as those people are easier to convert so the site doesn’t have to be perfect.
Once you get past that low hanging fruit, though your site needs to convert at 2% otherwise your CPA is going to be extremely expensive.
There are loads of ways of improving your conversion rate and if you take a look at my blog you will see multiple articles on the subject. The main thing is though you need to track is using google analytics and see where you are.
Once you know where you are, you can then work to improve it.
Heres a major tip.
A good offer can get your conversion rate to where it needs to be. If your offer is really good you can get away with not having everything else 100% perfect.
2. Audience is too small.
This is the second reason people usually struggle to increase spend and remain profitable. This may seem obvious, but a lot of people don’t think about it. You may not be able to spend any more money as your audience is simply too small.
If your audience is too small there won’t be enough people online at any one time to serve your ads too. If that’s the case you will have a very high frequency and the same people will see your ads over and over again which can drive up costs.
This is something to bear in mind when increasing your budget. If you are planning to spend thousands over and over again make sure your audience is in the millions. (This is a very broad statement and of course there can be exceptions, but it is something to bear in mind)
If your audience isn’t big enough the answer is very simple find more audiences and make it bigger.
You can do this by testing broad targeting. Making more lookalikes (videos views, email list, site visits, etc) and testing more interests.
3. Not understanding how the algorithm works.
This is the final reason which is stopping a lot of people from increasing their budget and spending more money profitably on Facebook. They simply don’t know how the algorithm works and they are breaking their campaigns.
If you try to scale the wrong way you will 100% send the price of your CPA through the roof.
These are the main ways you should be increasing budget.
1. Raise by 20% every 24 hours while monitoring CPA
This is what Facebook officially recommends. It can work, but I don’t like doing it because it’s like playing poker with your campaigns. In my experience when you do this more often than not you will eventually break your campaign and the cost will eventually go through the roof.
Trust me, there is nothing more frustrating than having a winning campaign and then suddenly it breaks. It can destroy weeks of good work and really set you back.
This suggestion does work sometimes, but be very careful when doing it. Basically, you increase your budget manually every 24 hours by 20%. The theory behind this is you will avoid sending it back into the learning phase by doing this.
The reality is you can do it once or twice and it works fine, but by the third time you raise it the campaign breaks and you have wrecked it.
If you decide to do this approach this is what I would recommend.
· Duplicate the winning campaign
· Leave both of them running.
· Increase budget on duplicated campaign.
· If it works turn off the original
· If it doesn’t work you can go back to the original and it isn’t broken.
This is a much safer way of increasing budget and if you want to do it this way I recommend this approach.
2. Duplicate winning campaign.
This is another one which can work well. Simply duplicate the winning campaign and leave everything running at once. Facebook advise against this as they recommend consolidating campaigns, but in my experience it can work.
If your audiences are big enough, you shouldn’t have too many issues with campaigns competing with each other and the overall approach can work well.
3. Add more campaigns.
This is what I like to do when increasing spend. Instead of going in and increasing budgets I prefer to simply make more campaigns and target more audiences. It is very common for us to have up to 10 campaigns running at any one time.
This is my favourite way to do it as I feel like I have more control and normally it doesn’t break the original campaigns when you do this approach.
Like anything though you need to test on your own account as different accounts can have much different results.
I hope you found this article helpful and you now understand how to increase spend on Facebook without breaking the algorithm. If you have any questions about that or Subscription Boxes in general, please let me know.
