Facebook sponsored ads have become a popular marketing channel for businesses of all sizes. With over 2.8 billion monthly active users, Facebook offers an enormous potential reach. But are Facebook ads really worth the investment? Let’s take a detailed look at the pros and cons.
The Pros of Facebook Ads
There are some key benefits that make Facebook ads worth considering:
Highly Targeted
One of the biggest advantages of Facebook ads is the ability to target your ideal audience. You can target users based on location, demographics, interests, behaviors and more. This level of targeting allows you to put your ads in front of people who are more likely to be interested in your products or services.
Cost-Effective
Compared to other paid advertising channels, Facebook ads can be very cost-effective. You set your own budget and only pay when someone clicks your ad or views a certain percentage of your video. The minimum budget to get started is as low as $1 per day.
Measurable Results
The results from Facebook ads are very measurable. You can track detailed analytics like impressions, reach, clicks, conversions, return on ad spend and more. This makes it easier to test different ads, audiences and strategies to optimize your performance.
Engaging Ad Formats
Facebook offers a variety of ad formats that allow you to showcase your brand creatively and drive engagement. A few examples are:
- Photo ads
- Video ads
- Carousel ads
- Stories ads
- Lead ads
Retargeting Pixels
You can add Facebook pixels to your website to track visitors and then create custom audiences to retarget those who have already visited your site or taken certain actions. Retargeting to warm leads can improve conversion rates.
The Cons of Facebook Ads
While Facebook ads offer some advantages, there are also some potential downsides to consider:
High Competition
The huge number of active advertisers on Facebook means a lot of competition. In some niches, the auction-based pricing has driven up costs for clicks and conversions over time.
Learning Curve
There is a bit of a learning curve with setting up and optimizing Facebook ad campaigns. The platform offers many options and targeting parameters – getting it right takes some knowledge and testing.
Ad Fatigue
Because users see so many ads on Facebook, there is a risk of ad fatigue. Sophisticated creative and good targeting help overcome this. But some users are overloaded with ads.
Time Investment
Managing Facebook ads well takes dedicated time. You need to monitor campaigns frequently, test new ads and audiences, bid adjustments and continuously optimize for better results.
Policy Changes
Facebook’s policies, algorithms and ad review process are constantly evolving. Changes like ITP 2.2 reducing tracking and conversion data have impacted campaigns. Staying on top of the latest updates is key.
Tips for Success with Facebook Ads
Here are some top tips to improve your Facebook ad performance:
- Focus on detailed targeting – really narrow down your ideal audience.
- Test different images, copy, offers and videos.
- Use many ad variations and let the algorithm learn.
- Customize ads for different audience segments.
- Analyze data and double down on what’s working.
- Be patient – optimization takes time to achieve results.
- Monitor competitor ads for inspiration.
- Create retargeting campaigns for visitors and email lists.
- Make mobile ads part of your strategy.
What Types of Businesses Benefit Most from Facebook Ads?
Here are some examples of businesses that can achieve great results with Facebook advertising:
Ecommerce Brands
Any ecommerce merchant selling products directly through their own website can benefit. Facebook lets you promote products, drive site traffic and conversions.
Lead Generation Businesses
Businesses that collect leads like insurance agents, higher education and SaaS companies do well with Facebook lead gen ads.
Local Service Businesses
Local businesses like dentists, salons and restaurants can geo-target nearby Facebook users to increase local store visits.
Info Products/Online Courses
Paid ads are ideal for promoting high-margin info products and online courses to warm audiences likely to convert.
Apps and Games
The Facebook audience offers huge potential for driving app installs and game downloads through video views and app install ads.
Nonprofits
Charities and nonprofits can run effective Facebook ad campaigns on modest budgets by targeting supporters and social causes.
Sponsored Ad Benchmarks by Industry
Average costs and performance for Facebook ads can vary significantly based on your industry and niche. Here are some average benchmarks by industry:
| Industry | CPC | CPM | CTR % |
|---|---|---|---|
| Ecommerce | $0.50 – $2 | $5 – $15 | 0.5% – 2% |
| SaaS & Software | $1 – $4 | $10 – $30 | 0.5% – 1.5% |
| Education | $0.50 – $2 | $8 – $20 | 1% – 3% |
| B2B | $1 – $3 | $10 – $25 | 0.4% – 1.2% |
| Nonprofits | $0.40 – $1.20 | $5 – $12 | 1% – 3% |
| Local Services | $1 – $3 | $15 – $30 | 0.5% – 1.5% |
Benchmarks will also vary based on the objective you are optimizing for like clicks, conversions, video views, leads, etc.
Should You Manage Facebook Ads In-House or Outsource?
There are pros and cons to managing Facebook ads in-house vs. outsourcing to an agency or freelancer:
In-House Pros
- Full control and oversight of campaigns
- Internal knowledge and best practices gained
- Ads aligned with internal goals and resources
- No agency fees or markup
In-House Cons
- Significant time commitment needed
- Learning curve if Facebook ads are new
- Harder to stay on top of Facebook algorithm changes
- Lack of external perspective
Agency/Freelancer Pros
- Time-savings from outsourcing workload
- Expertise in running profitable Facebook ad campaigns
- Strategic guidance from specialists
- Often stronger ad performance
Agency/Freelancer Cons
- Less control and visibility
- Additional costs involved
- Still need some internal time for oversight
- Need to find qualified partner
Key Facebook Ad Metrics to Track
To determine if your Facebook ads are performing well and optimize them further, keep close tabs on these key metrics:
CTR
Click-through-rate (CTR) is the % of impressions that resulted in a click. Look for CTRs above your industry benchmarks.
CPC
Cost-per-click (CPC) is how much you pay on average for each link click. Compare CPC to targets for your marketing objectives.
CPM
Cost-per-thousand impressions (CPM) is how much it costs for 1000 ad impressions. Useful for awareness campaigns.
CPL
Cost-per-lead (CPL) helps you gauge the profitability of your lead generation ads. Start optimizing when CPL thresholds are met.
ROAS
Return-on-ad-spend (ROAS) is revenue generated per dollar spent on ads. Shoot for a positive ROAS as quickly as possible.
Conversion Rates
Optimizing ads to improve website conversion rates is crucial. Track conversion rate by ad, audience and placements.
Frequency
How many times each user saw your ads on average. Balancing frequency and fatigue is key for optimal reach.
Conclusion
In most cases, running Facebook ads is worth the investment. The potential to reach a huge audience that’s highly targeted to your niche makes Facebook hard to ignore for most marketers. Just be sure to tackle the learning curve properly, track analytics meticulously, and optimize frequently for the best results. With some effort put into crafting quality ads and honing your targeting, Facebook’s massive scale makes it possible to drive impressive ROI across multiple objectives.