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Increasing ROI from Facebook ad spends

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Sachin Rao, Head of Small Business, Facebook India

Sachin Rao,
Head of Small Business, Facebook India

Reach out to the people you already know! – Sachin Rao, Head of Small Business, Facebook India

A lot of small businesses have a customer database. Often it’s a list of email addresses or phone numbers of customers who have bought something from their business before, downloaded their e-book or signed up to their newsletter. These customers recognize the brand and have demonstrated some positive intent towards it. Imagine if such a brand could show advertising content targeted to these customers. The cost of their advertising would reduce, the engagement with advertising would increase and their business would see a greater return on investment!

Now businesses can achieve this on Facebook
Facebook’s Custom Audiences tool does exactly that. It lets businesses upload a contact list of people whom they would like to reach with an ad. They simply need to upload the list of customers from their database and then create an advertising campaign that is targeted towards them. It is a great way to reach specific audiences with customized messages. Once the contact list is uploaded, each person on the list is given a unique code and this is then used to match their customers with their profiles on Facebook.

Over the last few months, Facebook has seen great results from small businesses that have used Facebook’s Custom Audiences tool. Businesses can be more strategic when they use Custom Audiences in conjunction with Facebook’s Offers product. Combining Facebook’s Offers and Custom Audiences also allows businesses to be targeted with an offer. For example, the business can design different offers for customers at different price points. Businesses that have loyalty program are able to segment and target messages to their customers effectively.

Take a ‘test and iterate’ approach
As with every marketing campaign, it is important to start small, track results and refine campaigns until you find the sweet spot. Once you identify which customer segment is driving the most results, you’d want to reach customers who are similar to them.

Facebook’s Lookalike Audiences tool can help businesses reach new people who demonstrate characteristics similar to your existing customers and are likely to be interested in their business. While  using Custom Audiences, the business can choose to create a Lookalike audience that targets people who are similar to the Custom Audience list. Lookalike Audiences can help businesses reach people who are similar to their current customers for multiple marketing objectives – customer acquisition, site registration, online shopping, coupon claims and brand awareness.

Driving conversation and loyalty
A brand that’s using Custom Audiences very well is Zivame.com, India’s premier online lingerie store. Zivame.com wanted to lower the cost of acquiring their Indian female clientele by 50%. Finding these customers is expensive as Internet users in India are often male, making it difficult to reach a female audience without attracting negative clicks. What’s more, buying lingerie online in India represents a fundamental change to current customer behavior. Specifically, Zivame.com was seeking to double their return on ad spend over 6 months.

Zivame.com used Facebook to target female audiences in India based on their interests, with ads and messaging relevant to the target segments. Over a six-month period in 2013, the brand used different ad images and ad copy to target college students and female professionals. By making their ads more targeted and relevant, Zivame.com reduced their cost per click by more than 70% and increased conversions by more than 2X.

Zivame used an in-house data-mining tool, which allowed them to identify various demographic and psychographic profiles based on their customers’ buying patterns. With this data, they were able to create custom audiences to target existing customers with ads featuring products relevant them. They also used the data to create Lookalike audiences to reach potential customers who had profiles similar to their existing ones. For example, Zivame segmented people based on their product preferences, purchase frequency, affinity for deals and offers, as well as other characteristics, showing different ads to each custom audience. Zivame also used custom audiences to reach people who were registered with the site but had not yet purchased. And one-time buyers were shown a different set of ads to encourage them to make a repeat purchase. Customers who had bought more frequently were targeted with an entirely different set of ads.

As a result, Facebook has been Zivame’s main channel to bring relevant, first-time visitors to Zivame and has improved their cost of user acquisition along with the overall return. This is the power of digital and Facebook in particular, where granular targeting and segmentation is available at a click of a button.

About the author / 

Neeta Nair

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