December 18th, 2019

5 Questions Franchisees Ask Us About Facebook Advertising

franchisee facebook advertising

Facebook is the most robust platform when it comes to social advertising. With 2.23 billion monthly active Facebook users, Facebook advertising for franchisees is crucial, now more than ever. Here at Franchise Ramp, we pride ourselves on constantly and proactively testing to produce the best results for our client’s business. Talk of Facebook KPIs can sometimes fall on deaf ears, though. To answer any of the Ad performance questions, our Franchisee Success team is dedicated to explaining the ins and outs of this social-platform-gone-marketing-machine. We’ve compiled the top 5 questions we hear from franchisees regarding their Facebook Ad Performance.

Why does my volume of leads fluctuate day-to-day?

This is probably the most common question we get. Similar questions would sound like this:

“My lead volume looks lower over the last few days.”

“The last couple of days I’ve only gotten one lead each day. ”

“Last week I was getting 8 leads, this week I’m only getting 3 leads per day.”

“Today I haven’t gotten any leads and it’s 4 pm. What’s going on? ”

You catch out drift. In order to answer this question, let’s first give a hypothetical scenario. Let’s say you’re spending $50 a day. Your CPM cost (cost per 1,000 impressions) is $10. For $50 spend in one day, you will get 5,000 impressions. Every single day, your ad will be delivered to different people, on different platforms. One day, your ad may be delivered on Instagram, one day it will be on Facebook Newsfeed, one day it will be delivered to mobile users, the next day desktop users. Your audience could be younger one day, older the next. The delivery of those 5,000 impressions is not the same. Each day on Facebook, there is varying competition from the millions of other advertisers. For your 5,000 impressions, depending on the competition for the LIMITED REAL ESTATE available.

What does this mean? Facebook is a limited real estate auctioning system. If 1,000 people log on in a day in a 5-mile radius of X location, there may only be 20 spots per person, that’s only 20,000 placements in the newsfeed, so all the advertisers vying for that same person show their ad on one of those 20,000 slots. The slot at 6 pm will be more expensive than the slot at 4 pm because people are more likely to convert at 6 pm. The availability of placement is different every single day. This translates to the changes you see in lead volume per week.

Let’s continue with our scenario. If you only have 5,000 impressions, you are relying on people to take action. Let’s say 4,000 people see your ad 5,000 times. So in Marketing Talk, this means your reach is 4,000 and your impressions is 5,000, so 4,000 unique people say your ad in that one day for a CPM cost of $10. For our purposes, imagine you have a 1% CTR (click-thru rate) off of those impressions- so you have 50 clicks in a day. Your CPC (cost per click) is $1. Off those 50 clicks, if you have a 20% conversion rate from click to lead, you’re going to have 10 leads. At the end of the day, you’re relying on those 10 people to take action. Regardless of statistics and data, we are still relying on real people to take action. As advertisers, we can take averages over a month, we can look at year-to-year data, but looking at every single day there are so many different factors it would make it impossible to tell you the real reason more leads came in yesterday than today.

Why does my lead cost rise over time?

There’s a couple of reasons. Mostly, this is due to saturation or the term used to describe the amount your ad or offer has saturated a specific demographic or market. In Facebook, we can measure that using a metric called frequency. Typically in a market of 5-10 miles, if frequency gets over a 4 in a 30-60 day window, ad cost starts to rise for a number of reasons. Here’s the anaology that we like to use here at Franchise Ramp: Whenever you are in presale, you are working 3 months prior to you actually opening your store. You’re probably going to be running your Founding Member offer. For a lot of our clients, we will start running lead generation 12 weeks for that founding membership. This is the first time that anyone in that 5 mile radius has ever seen your offer. Based on previous results, we are able to get in front of the best people at the best times, those who would likely be an early adopter of your product. To further illustrate the customer adoption curve, which looks like a bell curve, we’ll use Apple as an example. Every year when Apple launches a new iPhone, you have the people who are the early adopters who stay outside the Apple store 24 hours before the iPhone even comes out. They’re actually marketing for Apple themselves, and all Apple has to do is come out with a new product. These are the cheapest prospects and customers of Apple. Then, you have the people who wait a couple of months for updates before purchase- they’ve seen the ads only a couple of times. The people purchasing a year later. Before the next iPhone comes out, you have to drop the prices, and so they have a much higher acquisition cost. The late adopters are going to buy the product 4 years after the product comes out. There are multiple reasons- maybe they are late technology adopters, maybe they are cost adverse. The real reason, when you look at their buying habits, they are across the board late adopters. These guys are the most expensive- CPL increases as saturation goes up. How can we try and prevent this? Not spending too much especially if you are a sustainable store and you’ve been open for a long time. Offer fatigue is when a specific offer’s saturation gets too high. At this point, you’d need to switch up the offer.

What ways can we geotarget our ads?

Based off of radius, zip code, or exclusion. We can go down to a single mile radius around any address or longitude and latitude. We are able to add and exclude zip codes or other radiuses. For example, If we were to draw a 5-mile radius around your location, maybe you’d want to exclude the college campus that’s 2 miles away. You can draw exclusions and additions to get the perfect map of your market.

How do you know one ad set will outperform another?

You can’t know for certain. In every account, we are optimizing that individual account based on the individual performance in that account, not in a cookie-cutter manner. Every time we launch new creative in your account, we are launching the best performing creative out of tests completed in same-concept accounts. We’ll diversify the testing between all of our clients, but everyone will reap the benefits. The winning ad on aggregate will be transitioned over to your account. In your specific market, we would then work on optimization. Optimization means allocating the money of your daily budget to the ads and audiences that are performing the best on lead volume, lead cost, cost per impression, and click-thru rate in your specific market. Our Account Managers are constantly pausing ads that don’t work and moving money to ads and audiences that are working.

How do you know my ad is relevant to my target audience/market?

We publish the best performing determined by an aggregate score and the KPI’s that Facebook provides us with. These are CPI (cost per impression), CPC (cost per click), CTR (click-thru rate), CPL (cost per lead), number of leads, and performance indicates like ad relevance- we’re looking at those to determine the quality of the ad in your individual market.