Welcome to Counterflow Marketing. Today, we’re going to talk about some opportunities that your business can take in the digital advertising canvas. What do we mean by that? We’re talking about Facebook and Instagram. Let’s talk about some key terms and let’s talk about some history.
Key Terms and History of Facebook and Instagram Advertising
To make this a little easier to understand, we’re going to break down some terms really quick about digital advertising in general.
First, we have CPMs, or cost per impression. The root definition of cost per impression is the cost and how many times the page is refreshed a thousand times, whether it’s viewed or not. It is the general metric of online advertising. That’s a very interesting number, especially when we talk about Facebook’s base level pricing, but we’ll get to that!
Second thing is cost per click. About 10 to 20 years ago, Google pioneered this with AdWords. Cost per click is really just the cost that it takes for one click, for a mouse click to go to your website. Now, Facebook is a little bit different with this than Google because a click, by definition, on Facebook is slightly different. A click for a like or a click for a comment or a click for a share also counts as a click, so that’s something just to keep in mind. If you’re coming from a Google mindset, keep in mind that there’s a lot of different things that also count as a click with Facebook. So, that’s something to understand that’s slightly different.
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Facebook and Instagram’s Historically Cheaper Pricing
Let’s dive into a little bit of history from the past to where we are in the present with Facebook and Instagram. From about 2016 to 2018, we saw a massive e-commerce boom on the Facebook platform. The reason why is that we have people taking first mover advantage, taking advantage of a newer Facebook ad platform, where the base prices were quite cheap. So, you had entrepreneurs jumping into who got the first mover to e-commerce for household items, for other items, and e-commerce transactions. It was absolutely booming, 2017, 2018, and Counterflow particularly had several businesses in this canvas. We saw an immense amount of success in doing so, because we saw such a scalable cost per acquisition with purchases. Every day, we spent X and we got Y, and we were seeing three to one on our money, which up until now was unheard of compared to today’s number with how much Facebook’s ad costs have gone up.
So, that’s something to really keep in mind is 2016 to 2018 were the golden years for Facebook. It was very, very good, particularly if you were a manufacturer with the level of margins to all go into advertising. There was a massive opportunity in these years to get the first mover and get your business online where the competition wasn’t, and also particularly taking advantage of the cheap ad costs in 2016 to 2018. As supply and demand have come up, in 2019 the prices are substantially higher. The base level pricing of Facebook is substantially more, but we also have so many different variables as well. That is, we have much more competition, and that moves us on to our next point.
Facebook and Instagram is cheap again. Right now, we are seeing 2018 level pricing. Again, that was the glory year of Facebook. That’s where Counterflow made all of our successful e-commerce transactions, and moving to 2019 we saw, because of the cost of advertising, competition going up, we saw much more challenges with our online strategy. This caused other things to emerge and we saw other opportunities like retention and moving into other, off the platform and into other mediums. But, we’re coming back, because we are seeing prices are of the 2018 pricing.
Now, there’s a couple things we’ve been studying this past month that are because of these changing prices. Now, there is base level pricing that Facebook sets there on CPM. Arguably CPC, but cost per impression. They have a base level price that they want to collect from you. The rest of the puzzle of how much you pay because it is really based on the viral nature of your ads. If you have an ad that is awesome and just a rock star and thousands of people are watching and sharing it, you’re going to see a conversion on the upside of, for example, CPA and CPC. You’re going to see a conversion that is going to be very cheap and affordable, whereas if you have an ad that is not great, is static, or causing tough conversions, Facebook has to work that much harder to get that ad into people’s eyeballs. They have to force it on the people, on the users, on the platform, which means you’re going to pay a lot more for it. This is why the quality, or the relevance score is so important.
So, based on that viral nature of it is how the pricing works with Facebook, and again, we’re back to 2018 prices, because twofold. We are seeing competition with the COVID-19 pandemic right now. We are seeing people not being able to stomach the market right now and pulling out. However, the second thing is Mark Zuckerberg came out and said that because of the amount of usership being up right now, he genuinely does not know if Facebook can keep up with the demand of users at home on their smart phones, on their laptops at an unprecedented volume. So, between low competition, people pulling out, and a surplus of usership and volume, we are seeing supply and demand at its finest. We are seeing so much more available inventory on the amount of different times. For example, CPM, your ad can be displayed to people.
So, there is an absolute opportunity here because of competition and because of the surplus in inventory. That is going to trickle all the way down to the platform of being a cheaper conversion. By cheaper conversion, we’re talking about CPA. We’re talking about cost per acquisition of purchases, leads and landing page view conversions.
How Can Your Business Take Advantage of This Opportunity?
So, what is this? How is this useful to you? How can your business take advantage of this? We’re going to break this down. Landing page view – we’re seeing unprecedented cheap landing page views since we’re seeing about 2018 pricing and what does that mean? That means it’s roughly, if you have a relevant enough ad to who you’re targeting, you’re paying between $0.12 and $0.15 to bring someone to your website. That’s the cheapest we’ve seen in three years on optimization and bringing that.
With that being said, let’s ask some questions:
- How can you tweak or how can you maximize your Facebook ads and your messages to bring as many people to your website as possible?
- What are they going to do once they get to your website?
Tweaking your message so that it’s convertible online is a really good idea. Just what we are doing here in this video. We are taking advantage of landing page views right now, and we want all of you guys to come to our website and to watch the rest of this video so that we can get an inquiry from you about moving forward and seeing how we can work together. That is a very textbook example of us taking advantage of the cheap landing page view optimization.
Now, with that being said, there’s some other things as well. For industries that have to conform and change,
- What can they do to generate an online transaction now to take advantage of these cheap rates?
- What do you have to change in general as business to go from being a brick and mortar level to being online?
- What changes can you make to accept payment on your website, or partial payment?
It doesn’t necessarily have to be the entire amount. X for Y, particularly service industries. We’re seeing the legal industry heavily moving to Skype to do video conferencing, and really find ways to take advantage of the moving climate that we’re in from a digital perspective. The advice is the same quality and everything is barring the same. We’re seeing a little bit of a pivot here.
Another example is, say you are an auto detail company who works on cars and you’re unrolling a concierge service where you provide that same great service, but you are able to deliver it on call. People are ordering groceries at an unprecedented rate online right now as well. So, the market is already moving there as well.
The third thing to take advantage of is building your database. We can’t stress enough how important it is to build the database. We are seeing cheaper acquisition than ever to get a first name, last name, email, phone number interested in your services. Just because you may not make money on with that right this second, this is absolutely important for retention. If you build a database of several thousand people strong, you are going to absolutely see a lower demand for your ad costs in the future because you have a database that you can constantly sell goods and services to, but not just getting data you can sell. Think about the lifetime value of the customer. When you collect who went through the hoops and boundaries to inquire about your services for the future.
It is cheaper than ever to build a database, but don’t think about it just as long term. If you play your cards right and you really think about this, we can make money in the short term on building databases, whether we decide to perhaps give something away for free in exchange for something down the road. The opportunities are endless. Whether you’re offering a discount because it’s their birthday, or if it’s a discount on services with the discount code for your services or products. There are so many different ways to utilize email and other automated flows to increase and take advantage of a cheap database and which it costs to gather the lead. So, that’s something massive, and it’s absolutely going to reduce future ad costs.
The last thing, 100%, is what are consumers doing right now? With the several e-commerce companies that we work with and that we pioneer on our own in our products, we are not seeing a decline in consumer spending, and that is the most important metric. We are seeing the opposite. We are seeing people spend more money online right now for our products and services. So, getting online, taking advantage of an online transaction or building your business to accept payment, full or partial, is absolutely converting sales right now, because we are not seeing a decline in consumer spending. Right now, as we speak, at least in the time we are in, people are cooped up. They are on the social media platforms more than ever, and they are still willing to make transactions.
How Can You Work with Counterflow?
Now, the last thing is how can you work with us? It’s very simple. Fill out the form on our page, and we would love to talk about how we can work with you and set up a free consultation. The second thing is give us a call. You have our website. You have our contact information, and we would love to hear from you. We can dive in and do a digital audit on your business. We can evaluate where you’re at currently and set up a plan, work together to set up a plan on what we can do in the future. All we do is digital. We have been in the business for 10 years, and all we have done is study these social media platforms, their tendencies and ways to convert transactions into sales online and bring you money.
We can’t wait to hear from you! Thank you so much for visiting our website and watching this video, and we shall talk soon.