No reason behind this photo other than it's one of my favorite classic ads
Lets talk about magic. Not the stupid kind that people put on capes and wait in line at the movies to see, but the kind that makes you money. I’m talking about the black magic that is lowering bids and reducing CPC’s on FB ads.
Disclaimer: Everybody has their own formulas and theories about how to do this and what works the best. The info I’m going to share is based around what has worked for me and will hopefully give the clueless some light on the subject.
I don’t think I even need to explain the importance of having a good method of lowering lowering CPC clicks on FB thanks to increasing competition and companies with more money than brains the click costs on most demos (especially US) are very high and if you want to make even the best converting low payout offers work you better know how to drop it like its hot and do it fast.
While I do miss the good old days of cheap US suggested bids this new age of high click costs can actually have some positives as far as reducing competition. It’s rare that any demo especially in the US has low enough click costs to easily back out and produce a profit with anything less than decent to good CTR’s. Lazily slapping up an offer with a little targeting just doesn’t work anymore and as you’ll see in the strategy that reducing the CPC’s requires spending some money and that barrier to entry helps reduce competition from other marketers in an already saturated market.
So lets get down to it.
What You Need First:
- Good performing ads: .100% CTR was soooo last year .2% is the new shit dude get on it. (the higher the CTR the better, but I’ve noticed .200% and above ads are much easier to get down to the sub .20 level) If you can’t pull that high of a CTR then you have a lot of work to do.
- A good offer that converts: Before making a real investment you should collect some data and know that the offer converts at a level your happy with.
- Budget: This will vary wildly depending on your offer, demo, country targeted, etc. I pointed it out, because as stated before at the suggested bid price hardly anything can be profitable so you’ll need to “invest” in your campaign knowing that you’ll most likely be losing money before you make it.
Now that you’ve launched your well targeted campaign with a solid offer, good targeting, and you’ve achieved a high/good CTR (this is where most people ask “what do I do next?”) it’s time to start working on driving down the CPC’s.
Step 1: Let Facebook do it for you.
When you launch a campaign in the suggested bid range and achieve a good CTR of lets say .200% FB will immediately start lowering your average CPC. You don’t have to do anything, but let volume come in and the CPC’s will decline on their own. The higher your CTR the faster and larger of a drop you will see. This is why it’s important to bid initially at a decent rate somewhere near the suggested so your ads have a good chance of getting good CTR and some volume quickly.
Now where some of that “black magic” comes in as far as how many clicks you want to let roll in before making any bid adjustments. I can say from experience that 25-75 is going to be a minimum depending on your demo and how high your CTR is.
Don’t get antsy and drop the bids to early! You’re shooting yourself in the foot if you do as the initial high bid/launch phase is where you see the highest decrease in CPC.
Step 2: Pause and Lower.
Once you have collected about 25-75 clicks, you now have some data on how good the CTR of the ads will be and you’ve seen a drop in you average CPC’s already. Typically I let ads run as long as possible for day one and eventually will pause the campaign once things start to level out. Some people will say just lower your budget don’t pause, but I’m not in that camp.
Now comes the fun part while the campaigns are paused this is when you want to lower your bid. I like to drop mine to match the Avg. CPC I’m paying or slightly above by .10-.20 cents. We don’t want to go to low, because that could hurt volume and impressions.
A key to getting your avg. CPC down is understanding that FB does things on a daily basis. Once lowering my bids I keep the camp paused until the next day. Then I unpause with my new much lower bid. If your ad is able to maintain the same high CTR from day one chances are you will see yet another big drop in CPC.
Now you’re starting at a lower bid and FB will once again lower your CPC using your starting bid as reference point as long as you maintain CTR and collect more clicks.
Step 3: Repeat and Tweak
Repeating steps 1 and 2 will continue to drive down your CPC to a point. Eventually with bid lowering you should start to see a bottom, which means you will have trouble getting impressions. This is when you simply raise until you can find that happy medium between volume and ROI.
So that’s basically it. It’s not rocket science, but it works. The key to success is first creating high CTR ads and making sure that you collect enough data to know that the CTR is some what maintainable for your demo size. In other words no “woohoo! I got a .635% CTR with 1,200 impressions!”
I know it’s tough to let ads run at a loss initially, but if you know the offer works and the target click cost is obtainable then it’s totally worth it. Example, a few months back I ran a gaming campaign that required me to invest nearly $40-50 bucks per ad to get them down to a profitable level. Once they were there all I needed to do was raise my budget and turn up the volume.
When you hear some one say to stick with one offer and focus on it this is partially what they are talking about. If AM was as easy as slapping up an ad or two and making an instant profit then we’d all be making bank.
Cheers
-Strov
Great post. Useful information for the people who still run with Facebook. Now if only they’d hire some reviewers that don’t suck at their jobs…
you are so right about that the thing that facebook will give you even lower cpc.
i’ve had days when i could not get my cpc lower and remain high traffic, then the next day FB automaticly dropped my cpc!
so thats a really good tip
Interesting insights! Thanks for sharing this.