Facebook lead ads have become an increasingly popular advertising method for businesses looking to generate leads and grow their customer base. But are these ads actually effective at driving results? In this comprehensive guide, we’ll examine the pros and cons of Facebook lead ads and look at case studies and metrics to help you determine if they are worth investing in for your business.
What are Facebook lead ads?
Facebook lead ads allow you to collect contact information from interested users directly within the Facebook platform. When a user clicks on your Facebook lead ad, they are presented with a lead form where they can input their name, email address, phone number and other details you request. This allows you to generate a constant flow of leads from Facebook users without needing to send them to an external landing page.
Here are some key things to know about Facebook lead ads:
- Lead ads can only be created and managed through Facebook’s Ads Manager, not through Facebook Business Manager.
- You can customize the questions and fields you want users to fill out in the lead form.
- Leads are sent to you as they are generated so you can follow up with users in real-time.
- Lead ads work on both desktop and mobile.
- You only pay when users submit their information, not just for clicks.
The pros of Facebook lead ads
Here are some of the key benefits that make Facebook lead ads an appealing choice for many businesses:
Targets interested users
One of the biggest advantages of Facebook lead ads is that you can target your ads using detailed demographic, interest, and behavior-based criteria to reach users who are likely to convert into leads. This allows you to put your ad spend to more efficient use targeting hot leads instead of spraying out to a broad irrelevant audience.
Lead generation on autopilot
Once your lead ads are up and running, they provide a constant flow of leads into your sales funnel on autopilot. You don’t need to keep driving external traffic to your site. And when those leads come in, you can call or email them instantly while interest is hot.
Highly measurable results
Facebook provides robust analytics on your lead ad performance. You can view leads generated, cost per lead, amount spent, and conversion rates. This makes it easy to calculate your ROI and tweak your targeting and messaging to improve results.
Works for both B2C and B2B
From small retail shops to giant enterprise SaaS companies, businesses across industries have found success generating quality leads through Facebook. The targeting capabilities make lead ads effective for both B2C lead gen to grow an email list or boost sales, and B2B lead gen focusing on capturing leads from your ideal customer profiles.
Lead nurturing capabilities
You can send automated messaging to your Facebook leads to nurture them post-conversion. For example, you can send follow up emails, special discount codes, and engage leads that aren’t sales-ready yet with useful content.
The cons of Facebook lead ads
While there are certainly some excellent benefits to Facebook lead ads, they do have some limitations to be aware of as well:
High cost for competitive keywords
Because leads are highly valued, expect to pay a premium CPC (cost per click) rate to compete for high commercial intent keywords. For sought-after keywords, average CPCs can easily be $50+. Make sure you have robust lead scoring practices to filter out junk leads.
Lead quality varies
The quality of leads from Facebook ads can be hit-or-miss. You may need to weed through irrelevant leads and tire kickers to find those truly interested. Using tight targeting and lead qualifiers can help improve quality.
Ongoing optimization needed
Don’t expect lead ad campaigns to be set-it-and-forget-it. To maintain strong lead flow and ROI, you need to continually refine targeting as you gather performance data and test different creative.
Lead data not as rich
The lead contact details you get from Facebook are fairly minimal – just name, email, phone number and any other fields you added. You won’t get any firmographic data on the company to qualify B2B leads with.
Ad fatigue possible over time
If you heavily saturate certain user groups with your lead ads, you may start to experience ad fatigue where CTR and conversions decline. Make sure to monitor frequency caps and target expansion to give users a break from your ads.
Types of businesses that benefit most from Facebook lead ads
While lead ads can work for many business types, they tend to perform exceptionally well for the following industries in particular:
Software/SaaS
From capturing demos to building email lists, Facebook’s targeting makes it possible to zone in on your ideal customers in the software space. Lead ads are an efficient way to generate enterprise demo requests.
Ecommerce
Ecommerce brands can leverage lead ads to grow their email subscriber lists and retarget customers. Capturing emails on Facebook helps build lookalike audiences to find new customers.
Financial services
For insurance agents, mortgage brokers, tax prep services and other financial niches, lead ads provide a steady flow of prospects looking for those exact services.
Home services
Home service businesses like contractors, landscapers, home cleaners and HVAC companies can capitalize on Facebook’s hyperlocal targeting to connect with nearby homeowners looking for help.
Automotive
Dealerships, repair shops and detailers can attract nearby car owners in need of their services. Facebook interest targeting also makes it easy to reach auto enthusiasts.
Best practices for running effective Facebook lead ads
When creating your own Facebook lead ad campaigns, use these proven best practices to maximize your results and ROI:
Choose the right objective
Be sure to select the “Lead Generation” objective within Facebook Ads Manager rather than using Website Clicks or other objectives. This unlocks the necessary lead ad formats and optimization.
Nail down targeting
Take the time to test different layered targeting approaches – interests, behaviors, demographics, lookalikes, etc. The more refined your targeting, the higher quality your leads will be.
Design simple, direct creatives
Because lead ads have such a direct conversion goal, you don’t need elaborate branding or explanations in your creatives. Use simple, benefit-driven language and eye-catching visuals.
Personalize ad copy
Use dynamic fields in your ad copy like website URL, business name and location to make the ads more personalized and relevant to viewers.
Add lead qualifiers
Add screening questions to the lead form to qualify leads, like budget, role, company size or other relevant criteria to filter out unqualified leads.
Automate lead follow-up
Instantly send new Facebook leads emails or text messages to continue engaging with them when interest is highest.
Continually optimize
Check lead ad analytics regularly and make changes to target expansion, bids, creatives, lead form fields and more to steadily improve results.
Develop lead scoring
Grade incoming leads based on criteria like lead source, form completions, page views etc. so you can prioritize following up with your best leads first.
Map out lead nurturing
Plan how you will continue nurturing leads through your sales funnel with email, direct mail, phone calls, and other personalized touches.
Case studies on Facebook lead ad effectiveness
Want to see some real-world examples and metrics on how effective Facebook lead ads can be? Here are a few compelling case studies:
Microsoft Azure
- Averaged 900+ leads per adset
- CPA of leads was 60% lower vs other channels
- Sourced leads from 11,000 different companies
HomeX
- Decreased CPA by 34% year-over-year
- Reduced CPL by 15%
- Increased conversion rate by 12%
United Shore
- 12,000+ leads within first 3 months
- Average CPL of $22
- Monthly lead volume grew steadily to 75,000+
As you can see from these impressive results, all types of businesses from enterprise B2B brands to local home service providers have found Facebook lead ads to be a valuable source of new, low-cost leads at scale.
Evaluating the ROI on your Facebook lead ads
When assessing the return on ad spend and making decisions about your Facebook lead ad campaigns, make sure to focus on these key metrics:
Cost Per Lead (CPL)
This measures how much you are paying to acquire each lead that fills out your form. Benchmark your CPL against other lead sources.
Leads Generated
The quantity of leads being driven by your campaigns and how that number changes over time as you optimize.
Conversion Rate
The percentage of people who click your ad then go on to actually submit a lead form.
Quality of Leads
Gauge the quality of leads based on criteria like completeness of forms, page views, lead scoring etc.
Sales Generated from Leads
Track both the raw number and percentage of your Facebook leads that ultimately convert into paying customers.
Conclusion
Facebook lead ads present an intriguing opportunity for marketers to unlock a high volume source of leads while only paying for actual form conversions. However, to see stellar results, you need robust targeting, optimization processes, lead scoring, and lead nurturing in place. Set clear ROI goals and metrics from the start and continually refine your process to ensure your ad spend keeps yielding the right customers to grow your business.