When any business first dives into the world of digital marketing, they often wonder “Is Facebook Marketing Worth It?”
The short answer is yes - but it must be done correctly. Today, we’ll take a look at how you can ensure your Facebook marketing efforts are worth it.
At Relevantly, we have over 15 years of marketing experience, and are happy to share what we’ve learned with you. Let’s dive in!
Is Facebook Marketing Worth It?
When considering if Facebook ads are worth it or not, we first need to look at how much you should expect to pay.
According to Fit Small Business, the average small business spends about $1,000 - $2,000 a month on Facebook advertisements.
Looking at this number alone won’t tell you much, however. A better indication of whether or not your Facebook ads are worth the money is by looking at the Cost Per Click (CPC) result.
What Is CPC?
CPC is one of the best ways to determine whether or not your Facebook advertisements are providing a good return on investment for you.
From Facebook Business: “CPC shows how much, on average, each link click costs you. CPC is a metric used in the online advertising industry for benchmarking ad efficiency and performance.”
CPC helps you determine if your ads are performing well
In 2019, the average CPC is $1.86 - although each industry varies (we’ll go over that in more detail below).
If you have a high CPC result, for example, over $3.00, then your Facebook ads may not be performing very well - your Facebook ads might not be worth it.
However, a small CPC result is good, and it means Facebook users consistently click on your ads.
It’s important to compare your CPC result with the average in your industry, since it does vary widely from business to business.
Industry CPC Results
In our example above, we said that if you got a CPC result of over $3.00, that might indicate a poorly performing ad.
If you only look at the average CPC across all businesses, that would seem like the case for any business at first glance.
However, if your business falls into the finance or insurance industry, $3.00 would be on par with the industry average. Actually, it would be a bit lower than average!
This graph shows the average CPC result across a number of different industries.
For our example of $3.00 CPC, we can see that would be quite high in the apparel industry, on-par in the home improvement industry, and would actually indicate an above-average result in the finance/insurance industry.
So, what else influences CPC?
The ad objective you choose (E.g. you may just want to promote brand awareness, or you may actively try to generate sales)
Your relevance score (A score of 1-10 that shows how well your ad resonates with your target audience)
Your ad creative (The quality of image/video you choose, how well you word your headlines, etc.)
Although CPC result is a good way to measure your ad’s performance, it is only part of the equation. CPC only measures clicks - it doesn’t look at sales.
ad example - was this facebook ad worth it?
Let’s take a look at an actual ad we ran for a client over the summer to put sales and CPC together. Is Facebook marketing worth it? Let’s see.
When analyzing an ad, CPC is important. In fact, this is one of the best ways to find out if your Facebook marketing efforts are working for you.
This ad had a CPC result of $0.07
We ran this ad for a home improvement business. The average CPC rate for home improvement, according to Fit Small Business, is $2.93.
This ad received a CPC result of $0.07 - that is significantly lower than the average for the industry. That’s great!
However, this result alone doesn’t tell us all we need to know.
Using “CMR” To Determine Worth
According to Entrepreneur, there’s an easy way to calculate whether your sales efforts are worth it or not - it’s called the “Contribution Margin Ratio” (CMR)
You take the cost of your sales and divide it by your variable costs (everything that goes into making a sale - manufacturing, shipping, etc).
There is a Marketing CMR formula that helps you determine specifically if your marketing efforts are worth it - you divide your marketing sales by your marketing costs.
CMR can help you answer the question “is facebook marketing worth it”
Entrepreneur suggests your Marketing CMR result should be at least a 3, or else you really aren’t making money.
So, in the case of our ad, let’s say the client got $400 in sales. Although at first glance, that looks pretty good - that’s a CMR of just 2 (400 / 200 = 2).
Although the CPC result was low, the ad only generated views and not many sales. This is why tracking both CPC and CMR is important. More views do not necessarily mean a more effective ad.
However, if the client got $800 in sales from their Facebook ad, that’s a CMR of 4 (800 / 200 = 4).
That CMR result, along with the low CPC result, would mean this ad was definitely worth it. This would mean that the ad generated lots of views and lots of sales!
You can use the CMR formula and your CPC result to determine if your Facebook ads are working well. The lower the CPC, the better. The higher the CMR, the better!
If you are not convinced that sales are coming through due to Facebook ads, you can always track them with the Pixel, Google Analytics, or other programs that track clicks and traffic to your website.
Why Choose Facebook Marketing?
You may be wondering if Facebook marketing is worth it at all - why should I create ads when I can just post on Facebook?
Due to Facebook algorithm changes, posts from business pages often do not reach users’ News Feeds anymore. This is why many have said that "Organic reach is dead.”
Check out the video below to learn a bit more.
Organic reach may be dead - but Facebook marketing is not!
“Organic reach” may sound strange, but it just means the number of people who see a regular, non-sponsored post, status update, or video.
In the past, businesses and users alike had the ability to reach hundreds or thousands of people with organic posts.
However, due to the algorithm changes over the last few years, this is no longer the case. Even popular businesses with huge followings have reported steep declines in organic reach.
Because of this, many businesses both large and small are turning to Facebook advertisements in order to reach their audience, connect with new customers, and increase their sales and brand awareness.
Facebook Marketing Is Worth It. Here’s Why:
Getting started in the world of Facebook or online marketing can be tough - but it is worth it.
Even if you have had previously unsuccessful Facebook ad campaigns, that doesn’t mean you are destined to get the same results forever.
Fortunately, with proper targeting, a high-quality ad, and an effective strategy, Facebook ads are one of the fastest ways to make money!
Here are some other reasons why Facebook marketing is worth it.
huge potential reach of local customers
With over 2.3 billion Facebook users, you have the ability to reach thousands of potential customers within your service area.
You can reach thousands of customers with Facebook ads
This example ad has the potential to reach up to 6,400 people per day on a budget of just $600.00!
By creating a defined custom target audience, you can reach the people who are most likely to buy your products or services.
You Can Use Remarketing To Your Advantage
Imagine the opportunity to reach potential customers who are just on the cusp of buying from your business. With Facebook remarketing, you can!
Remarketing is when you seek out leads you previously got on an advertisement - for example, someone who visited your website once but didn’t buy anything.
Facebook remarketing options easily allow you to target these potential customers through Facebook Pixel.
increases brand awareness and traffic to your site
Even if you do not get as many sales as you hoped during your first few ads, the benefits of increased brand awareness and creating familiarity with your website is tremendous!
Facebook ads help improve brand awareness
From Kimgarst.com, brand awareness can:
Increase customer loyalty
Create word of mouth marketing
Keep your brand ‘top of mind’
Help build brand equity
Increase sales in the long term
When your ads hit the News Feed of thousands of customers, they’ll quickly become accustomed to your logo, name, and unique branding.
Don’t underestimate the power of brand awareness - and Facebook is one of the easiest and quickest ways to create it!
Make The Most Of Your Facebook Ads With Relevantly!
One of the best ways to make sure your Facebook marketing efforts are worth it is by working with the professionals!
Contact us at Relevantly to learn how we can help you improve your Facebook marketing strategy and consistently make the most out of your budget.
At Relevantly, we have over 15 years of marketing experience, and are kept up-to-date with marketing trends, including social media and Facebook advertising!
Let us do the hard marketing work for you, so you and your employees can get back to your important tasks!
If you’re ready to create effective ads and make the most of your Facebook advertising budget, learn how we can help now!
Facebook ads Training course
Want to learn more about Facebook advertising to ensure your in-house marketing team is up to speed on the best marketing strategies, advertising tools, and more?
At Relevantly, we also offer a Facebook Ads Training Course for small businesses! If you are located within the Kitchener-Waterloo area, we can plan our sessions at your facility.
If you are located outside of our service area, we can plan web seminars instead! We offer a flexible schedule for our 8 week training course, and can tailor it to your unique needs.
