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The 5-Step Process HubSpot Uses to Optimize Facebook Advertising Costs

When Mark Zuckerberg shocked the digital marketing world with his announcement that Facebook would overhaul its algorithm to let users engage with their friends and family more and less with brands, the social media giant’s CPM skyrocketed 122% — the highest spike in Facebook ad prices over the previous 14 months.

Today, organic and paid reach are still flatlining, causing ad costs to balloon to unprecedented levels. And in a space where advertising has historically been cheap, how can marketers sustain their revenue without having to increase their Facebook ad budget?

One word: optimization. In a nutshell, ad optimization is getting the maximum bang for your buck for every single dollar you spend distributing content. But to do this, you need to constantly test your Facebook ad strategy and use data to course correct it enough to maximize your results every time you send out an ad.

Fortunately, we sat down with Rex Gelb, HubSpot’s paid acquisition team lead, and asked him about his approach to Facebook advertising. Check out his five-step process for running efficient campaigns and start optimizing your Facebook advertising budget today.

The 5-Step Process HubSpot Uses to Optimize Facebook Advertising Costs

1. Choose a campaign objective.

From a fifty-thousand foot view, our paid acquisition team usually pursues two types of Facebook advertising campaigns: direct response and branding.

Direct response campaigns aim to get people to take a desired action, like a download, signup, or purchase. Branding campaigns aim to get as many eyeballs on our content as possible. Clicks aren’t the goal here, exposure is.

Facebook also knows which users are most likely to click on ads and which ones are not, so whatever objective they chose at the start of their campaign, the social media giant will distribute their ads to the right audience.

2. Pick a bid strategy.

On Facebook, there are two main ways to buy advertising space: Cost Per Thousand Impressions (CPM) and Cost Per Click (CPC).

When our paid acquisition team uses CPM bidding, the risk is completely on them. They’re paying for impressions, not clicks, so if their offer or creative isn’t compelling, they’re wasting their money.

When they use CPC bidding, they share the risk with Facebook. They need to craft compelling ads and Facebook needs to distribute them to the right audience. Otherwise, both parties lose.

3. Build out targeting.

One way our paid acquisition team likes to target their ads is by building a custom audience. A custom audience is a list of people who have specific attributes, like being one of HubSpot’s monthly active users or CRM signee, that they plug into Facebook. Facebook then analyzes this list to provide them with more data about these people, like their age, gender, job title, location, and household information.

A couple of years ago, the paid acquisition team used a custom audience to target ads to CMOs who use Google Chrome. They wanted to see if their strategy would decrease their cost per acquisition and cost per click for one of HubSpot’s Google Chrome extensions.

But they also had a hunch they could convince CMOs who use other browsers that HubSpot’s extension was valuable enough to switch browsers for. They ended up being right. When the paid acquisition team broadened their targeting to all browsers, they discovered that they could acquire twice as many users for HubSpot’s Google Chrome extension compared to only targeting Chrome users.

Experiment Cost Per Regular User Cost Per Click
Chrome $19.32 $3.60
All Browsers $9.63 $1.07

Another way the paid acquisition team targets their ads and optimizes their spend is by creating lookalike audiences. To do this, there are two relatively easy options they can leverage:

1) Pull lists of people who have specific attributes from HubSpot’s database, like anyone who is a CRM signee or invited additional team members to sign up, and plug them into Facebook.

2) Pixel one of HubSpot’s web pages, like the blog’s homepage, and plug the list of people who visited the page into Facebook. This way, the social media giant can match these people with their Facebook profiles.

Whichever route they choose, Facebook will generate a much larger group of users who “look like” the people in these lists. The paid acquisition team can then distribute ads to a cohort of new prospects who are likely to convert into users.

For instance, during one of their Facebook advertising campaigns that promoted CRM signups, the paid acquisition team found out that creating lookalike audiences based off people who have decision maker titles, are activated users, or are listed as a sales rep in HubSpot’s CRM helped them acquire team registrations at a lower cost than lookalike audiences based off people who visited certain pages on HubSpot’s website.

Seed List Cost Per Team Registration
Decision Maker Titles $20.31
Activated Users $20.48
All Sales Reps In CRM $23.95
Registered Users $24.33
CRM Homepage Visitors $27.66
Sales Exec Same $28.55
All HubSpot Visitors $31.48
SB4 Visitors $33.48
Sales Blog Visitors $34.14

4. Craft compelling ad creative.

When our paid acquisition team sits down to write ad copy, their goal is write something so compelling that it can grab the attention of a distracted millennial slouched in front of the TV, with their smartphone in one hand and a slice of pizza in the other.

So what’s the process for convincing their audience to ignore that pizza and read HubSpot’s content? After testing over 500 ad creatives during the past two years, our paid acquisition team has boiled the art of crafting compelling ad creative into three steps.

1. Pique your audience’s curiosity.

A little intrigue goes a long way in marketing. Humans are biologically driven to investigate our world rather than respond to it. And if you can evoke enough curiosity in your audience so they can’t help but satisfy it, they’ll click on your ad.

For instance, when the paid acquisition team used the tagline “The hidden gem buried within your Google Calendar, brand new from HubSpot”, it produced better results than the tagline “Scheduling meetings just got a whole lot easier with HubSpot’s CRM”.

Why? Without revealing what it actually is, the first tagline describes a new tool that’s right in your email inbox, evoking curiosity and excitement for something that seems valuable yet easily accessible.

On the contrary, the second tagline immediately gives away what the new tool is — a meeting scheduler. This doesn’t evoke enough curiosity or interest to compel people to click on the ad.

2. Blend into the news feed.

Most of your audience’s news feeds are filled with posts from their friends and family, especially after Facebook’s latest algorithm update. To avoid screaming “I’m an ad”, include a photo that actually looks natural.

For instance, the picture below looks like a stock photo. And when people see a stock photo, they’ll immediately know the post isn’t authentic.

However, the next picture looks like a regular picture a friend might post, organically blending in with your audience’s newsfeed and making a genuine first impression with them.

3. Sell a feeling, not a product.

Psychology tells us that emotions drive our behavior, while logic justifies our actions after the fact. Marketing confirms this theory — humans associate the same personality traits with brands as they do with people. Choosing between two alternatives is like choosing your best friend or significant other. The people we decide to live our lives with makes us feel something.

This is also the reason why pitching a product’s features is a lousy attempt at persuasion. Features only appeal to the logical part of your brain, which science suggests doesn’t drive action nearly as well as appealing to the emotional part of your brain does.

To pinpoint the exact emotion that resonated with our audience the most when our paid acquisition team promoted our CRM through Facebook ads, they tested over 30 angles against cost per regular user and click through rate. Here are their best and worst ones.

Angle Cost Per Regular User Click Through Rate
Free/Alleviates Frustration  $2.86  1.07%
Transformation Version 2  $3.95  0.76%
 Data Enrichment   $4.08  0.68%
 Saves Time  $4.10  1.02%
 Transformation Version 1  $4.97  0.72%
 360 Degree View of Sales Process  $9.65  0.53%
 No More Falling Behind On Leads  $10.47  0.56%
 Cuts Down On Stress  $10.57  0.64%

5. Design a simple landing page.

Just because you’ve grabbed someone’s attention with your ad doesn’t mean your work is done. You still need to design a compelling landing page that clearly conveys the value of our offer. To help you do this, here are three principles our paid acquisition team lives by when they design their own landing pages.

1. Again, pique your audience’s curiosity.

Curiosity is the best way to convert an audience. Don’t reveal too much about your offer, but make sure to highlight its benefits.

2. Don’t distract your audience with external links.

Allowing people to exit your landing page through an external link pokes a hole in your funnel — users will leak through, diminishing your conversion rate. If visitors can leave your paid acquisition funnel, there should only be two exits: exiting out the page or signing up for the offer.

3. Test out a video.

Even though videos can explain the value of your offer in a more engaging way than text, they also serve as a distraction. This might lead to a dip in your landing pages’ conversion rates, but our paid acquisition team has noticed that videos actually increased their landing pages’ activation rate, which compensated for their loss in conversions.

Variation Cost Per Regular User Cost Per Activated User
Video $21.56 $78.37
No Video $15.76 $85.32

Never stop testing.

Testing your Facebook ads is like gambling — most of the time you’ll fail. But if you can quickly figure out which strategies work and which ones don’t, you can refine your Facebook advertising to the point where you’ll almost always earn the maximum bang for your buck on every dollar you spend distributing content on the social network.

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