Building a Business Empire on a $300 Initial Advertising Investment


Car wash equipment
Photo Credit: 1968 Dodge Charger R/T | Scott Crawford via Compfight cc

It’s a sobering realization for small business owners – most of the activities we do to “market” our businesses, won’t actually produce new traffic and customers.

If you’re like most marketers, you know your advertising works, but you’re not sure which parts of it… and most of us can’t reliably predict exactly what amount of cash register results to anticipate from our advertising investments. Because you need to test, in order to know.

Stories like this one, about a Toronto-area business owner who spent more than $350,000 on Facebook ads in less than a week, for no profits, can scare business owners away from trying Facebook ads because it reflects our most common fear of investing hard-earned cash into advertising activities: “What if this advertising doesn’t turn a profit?”

In this example, our advertiser failed from the start for two reasons: He had the wrong goal, and he failed to test his investment in a no-risk way.

The Wrong Goal

His goal was to gain Facebook page Likes, so he could later advertise to them “for free”, an old approach to Facebook community engagement strategies. Pre-2012 before Facebook went public and began focusing on advertising revenue, page owners could post an update to their Facebook page and feel somewhat confident that the update would be seen by a large portion of their page likes – whoever was on Facebook at the time and looking at the newsfeed.

These days, when you post an update to your Facebook page, only a small fraction of your Likes see it, reportedly around 16%.

Facebook has done this so that their advertising is more effective, and when used properly, a more efficient method of communicating with your community.

Not All Facebook Ads Are The Same

Facebook allows you the opportunity to choose to pay to promote/advertise your content & offers in a variety of ways:

  1. Promoted Posts: pay to ensure updates on your page are seen by more of your total page likes. How to get page likes? Invest time, energy, and money in community management and organic page growth OR invest in a Facebook Page Likes campaign.
  2. Page Likes: pay to promote your Facebook page, to new people on Facebook, to increase the size of your Facebook community.
  3. Facebook Ads: pay to place ads on Facebook, to promote any link you choose (on or off Facebook), to any defined target group.

○      You do not have to have a Facebook page, or audience, to begin or continue advertising

○      You can upload any list of emails (any segment of customers or coupon requests), into the Facebook “Power Editor”, to create a custom target audience, to target ads specifically to those email addresses’ related Facebook profiles

○      You can “retarget” and “remarket” on Facebook to send a customized message or offer, to people on Facebook who have previously been to your website, and either purchased, or not purchased

Promoted Posts

This 1st option is the easiest way to spend your ad budget, with Facebook putting a BIG “Promote This Post” button on every page post for page managers to create an ad campaign and spend their budget, in 2 clicks. This type of advertising is indirect advertising, or multi-step advertising. You’re purchasing an ad campaign to generate audience exposure to your page updates. Unless the post is a sales or promotional offer, you’re actually paying to advertise a general post, for a successful result of zero potential sales & profit.

Page Likes

The 2nd option is a little more complicated and can be beneficial for businesses who are already using Facebook advertising to build their business revenue. This is a commonly misunderstood form of advertising, and not a great investment if you want to be able to measure the effectiveness of your advertising spend. What paying for Page Likes will do is boost your ego, with the ability to quickly grow your page with low-cost page Likes that most people will never know are complete junk.

Facebook Ads

Just like Google Adwords, you can set a maximum daily budget and campaign options so that you only pay for ads that get clicked on. Once you’ve decided on your primary objective, you can create the steps of the campaign to get you there.

Risk-Free Testing Is Critical

In Perry Marshall’s book 80/20 Sales and Marketing, he outlines how to “split test” every ad campaign, in a way that leverages the 80/20 universal rule in each stage of your advertising. The simplest way to determine a more profitable ad is to always be testing – always have at least two ads running simultaneously, to the same offer.

Each test produces a winner, the one ad option that performs better, and the loser is “turned off”, so that with each subsequent test, your results are improving. Each element of your ads can be tested, from the headline, to the landing page, to the offer, to each segment of the target group, so you can optimize each stage of your campaign.

For your 1st Facebook campaign investment, to limit your risk, run small, focused tests.

I recommend an initial testing budget limited to $10/day, over 1 month. During this month of testing, there is no specific amount of sales or results that you’re trying to achieve, you’re only looking to benchmark your starting point, to run split tests on and to end the month with graduated improvements.

So here I propose a challenge:

For one month, decide that you will take a disciplined approach to Facebook advertising so that at the end of the month you will have very clear answers to the question:

“When I spend X amount on Facebook Advertising, daily, exactly how much money will I make and how long will it take?

Sadly, you’ll never know the real answer to this question, until you start testing answers:

  • Offer: the ONE solution package you’re promoting
  • Perfect customer: the target group segment (why are they your most likely buyers? – Grouped by a shared problem, know their specific geography, age, socio-economic characteristics, interests, or passions)
  • Compelling Message: consistent messaging through ad copy, landing pages and sales page copy choices matter! They buy solutions, and results, not processes.
  • Images: people react in a split second and reject or appreciate your ad based on the image

You’ve Tested & Learned From the Results

When your answer is something like: “I spend $25 per day on Facebook advertising and it consistently brings in at least $875 worth of new business”, you’ll probably have a very different view on the value of Facebook advertising.

When I spend $X amount daily on Facebook Advertising, with this offer, against this target group segment, with this landing page copy, we can reliably predict (from past experience) a near range of this specific outcome.

Once you find the right ad, to landing page, to offer sequence, that produces a consistent profit on Facebook, you can test the same landing page & offer sequence against different traffic sources, like Google Adwords or banner advertising on your friend’s business website page.

As you strip away all the variety of activities and places where you can “advertise” on Facebook, to focus ONLY on the types of campaigns that produce measurable profits or specific actions in business, Facebook advertising can become a very simple tool for generating reliable revenue and profit in your business.

Like turning on a light switch, you’ll know how to turn on a measurable flow of traffic to your offers, and with testing, create a reliable daily rate of how many people see your offers and then convert into paying customers.

These two articles share some of my insights and approach to Facebook paid advertising:

When you decide its time to get started, one of the best overall resources for expert insights to Facebook advertising today, is Jon Loomer:

About the author: Debbie Horovitch is a 20-year advertising media veteran and SEO content producer currently working on her 1st book and training program for marketers using YouTube and Google+ Hangouts on Air, Celebrity Hangouts on Air. Debbie has been working with automotive and aftermarket marketing professionals and media, since 1996.

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