I’ve read more
than a few places that it’s possible to get dirt cheap cost per clicks (CPC) using Facebook advertising. However, my experience until then had proved otherwise. I had never been able to do better than $0.25 CPC on Facebook, which simply is not cost effective for a bootstrapped startup
like ours.
But the promise of cheap advertising convinced us to keep trying. A little research, a little testing, and a lot of patience later has led us to the promise land:
We achieved the elusive single penny clicks!
Alas, not all that glitters is gold. So I’ll explain how we achieved 1 cent CPC, how you can do it, and why you might not even want to.
1. Broad demographics, narrow interests
To start, when choosing the target for your Facebook Ad, you are given numerous geo-targeting options. However, unless you have a product that can only be used in a certain state or country, your best approach will be to select the broadest range of demographics that apply, and then target the ad based on specific interests.
For demographics, we chose all English speakers over the age of 24 (sorry, teen moms!).
For interests, we targeted based on any baby or child related term we could: motherhood, playing with my kids, playing with my sons, children’s books, you get the idea.
We chose over 100 terms in total, which put our estimated reach at 14 million people.
2. Photo, photo, photo!
Let’s get started on how to construct an effective ad.
The first and most important aspect (by far!) of your Facebook ad is the photo you use. But what makes a clickable photo?
All of my research on Facebook ads pointed to the same definition of clickable photo: “shows cleavage.” It seems rather vacuous that Facebook users don’t notice the text of an ad much, but both men and women are apt to notice an attractive woman’s chest.
However, we run a site for parents; showing an inappropriate photo in our ads would damage our brand. So we had to consider how to create a clickable photo that was still relevant to our audience. Our idea was to balance attractiveness with tastefulness by using celebrity moms and their kids. Finding several celebrity+baby photos, here are the ads we created for our first test:
Quiz time: Can you guess which ad had the best and worst click through rate (CTR)?
Here are the results:
- B - 0.086%
- A - 0.055%
- C - 0.043%
- D - 0.025%
What’s notable here? First, people were clicking on the celebrity’s photos at a decent rate (average ad on Facebook has 0.051% CTR), but Ad B, which had the least recognizable
celebrity, did significantly better.
Our CPC bid for these ads was $0.30, and our average CPC was $0.25.
Note: until you prove to Facebook your ads perform well, you cannot short-change them with low CPC bids. Facebook won’t run your ad in widespread circulation until you prove they can make money off of you!
3. To lower your CPC, raise your CTR
A lot of acronyms, I know. But the big key to getting cheap clicks is this really simple concept: the better your click through rate (CTR) is, the lower cost per click (CPC) you can achieve.
The reason is because Facebook is trying to maximize their revenue while also maximizing their users’ satisfaction. Ads that get clicked on often mean their users are finding something they like (satisfaction). And if they are clicking more often, Facebook is making more efficient use of their page views (revenue), and thus can afford to charge you less per click.
Since our CPC from round 1 was much too high, we needed to lower it by raising our CTR.
4. More Cowbell!
And by cowbell, I mean clickable-ness. Examining the results of our first round, and our research of what makes a photo clickable, we experimented with a new version. This one took our best performing ad (Ad B) from round 1, and zoomed in further to put more focus on the baby and the, ahem, clickable-ness. Then we lowered our CPC bid to $0.10. Take a look:
How’d it do? Well, the click through rate doubled to a phenomenal 0.15% (triple Facebook’s average) and sure enough, the CPC went down to $0.08!
Once you achieve a high CTR, you can start dropping your bid to try to squeeze a better deal out of Facebook. We found that at a $0.06 bid we were still getting placement and clicks!
5. Analyze, Rinse, Repeat
We had picked all the low hanging fruit to achieve a very good CPC of 6 cents, but that was still 6 times more expensive than our goal of a penny per click.
The next step to lowering your CPC is by super targeting. Remember, we originally targeted broadly on demographics and narrowly on interests. After running your ad, Facebook provides you demographic data so you can see which countries, ages, and genders are clicking your ads and at what rate. That way, you can stop damaging your CTR by not showing your ad to people who never click. And the higher the CTR, the lower you can get your CPC.
Here’s our demographics report for the “more cowbell” ad:
Fascinating stuff. What we learned:
Old Middle-aged people (over 44) don’t click on the ad at all.- Muslim countries clicked at an incredible rate. Pakistan and Egypt provided CTRs of 0.23%!
We then ran a new version of the same ad, targeting just muslim countries, and people aged 18-44. We began our bid at 4 cents, and as we started to earn impressions and clicks, we dropped it penny… by… penny… until…
All that glitters ain’t gold
While we did in fact reach our goal of
1 cent CPC, we realized that we lost sight of the forest through the trees.
We’re a business, and as such, we want (no, need) to make money.
Our final ad, costing us just
1 cent per click, was not coincidentally targeting some of the poorest countries in the world. How many people in Pakistan are going to pay for a
Premium Moment Garden account, or buy $50 photo books of their child, when their average monthly income is just $41?
So while we did indeed find gold in our quest for penny clicks, we quickly realized we were chasing fools’ gold trying to reach it.
Lessons Learned
We did learn a tremendous amount from our Facebook Ad experimentation. While you may not be able to get much value out of
1 cent CPC, all the above techniques can be applied to drive down your CPC within the market you ought to be targeting. Just be sure you’ve identified who that market is, and aren’t spending your precious cash showing your ad to people who don’t need, or can’t afford, your product.
In addition, here are some “secrets” we learned along the way:
- Many people recommend switching to cost per impression (CPM) bids once you drive down your CPC. We tried this as well, but what we found is that it results in much lower CTR, and subsequently higher CPC. The reason? If Facebook knows it’s getting your money as long as it shows your ad (whether or not anybody clicks on it), it’ll show your ad lower on the page. That way it can milk higher CTR from ads with CPC bids by putting them at the top of the same page, and still get just as much money from your CPM bid at the same time. That’s my theory, at least. Sneaky.
- Likewise, as we lowered our CPC bid from 3 cents to 2 cents down to 1 cent, we saw a drop-off in CTR. Why would the same ad perform differently based on your bid? I’m guessing for the same reason as above - Facebook decides to put your ad lower on the page to fill inventory, while showing a more lucrative ad near the top.
- Ultimately, what matters from ads is your conversion rate. How many of those clicks turn into users. We tracked this data and found that for our first $37 in Facebook Ads, we got 442 clicks and 58 new users from Facebook. That works out to a 13% conversion rate, and a user acquisition cost of $0.64.
- Not surprisingly, people coming to our site from Facebook were much more apt to click the Facebook “like” button on our homepage than an average visitor. Out of those 442 clicks, we got 43 new “likes.”
- Step 5 above requires access to your demographics’ CTR data, so you’ll know which demographics are clicking the most often. While you can access much of the demographics data via Facebook reports within a day of starting your ads, the CTR column was missing for us. It took about a week for that data to show up in the reports! Just keep this in mind if you’re wondering where that column is, like we were.
We hope you learned a bit from our experiences, and that you can apply some of this knowledge to your own Facebook Ads.
If you have any questions, leave a comment below.
