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Facebook Ads Results 45 Days After Covid
Facebook Ads Results 45 Days After Covid
Yan Deiss Webinar : https://bit.ly/2K6aaNa
COVID-19 has become, in a very short period of time, an inevitable topic of conversation for the whole world, and especially for online businesses.
Leading to the following question: Should I stop spending on advertising during this time?
Nathaniel Létourneau Ross, Account Manager at J7 Media, and I try to answer this question by presenting real-life client cases and data from our own campaigns.
What should be a hindrance could end up being a huge opportunity. Indeed, so far, no e-commerce company working with J7 Media has stopped advertising.
Even better, the vast majority have seen their ad delivery costs as well as their costs per results decrease.
We explain how in this podcast.
We hope you enjoy this episode!
A J7 Media Podcast
(Antoine Gagné) My name is Antoine Gagné and I’m very happy to be with you today for a new episode of Social Selling. We’re recording this podcast on April 23rd, 2020 and for the past month and a half, more than 50% of the world population has been confined to reduce the contagion of the COVID-19 virus.
Now, what does it mean for people who advertise on Facebook? Would it be better to stop your advertising efforts or should you double down on your initiatives? Here, at J7 Media, as a Facebook advertising agency that manages close to 1 million dollars per month in media spend, we’ve been able to see three things that any business who sells online should do right now to increase their sales.
To discuss this topic, I’m with my colleague Nate Ross, who’s a senior media buyer at J7 Media. Nate, welcome to Social Selling!
(Nate Ross) Thank you, Antoine. Happy to be doing this in English as well.
(Antoine) Yeah, of course. Because usually we do this podcast also in French. So Nate, let’s get right into it. I think the big question that everybody has had in the past couple of weeks is ‘should I continue to advertise my business during the crisis?’ And now almost forty five days later, I think we can all agree on one thing. There is an amazing opportunity on Facebook right now.
(Nate) Absolutely. So, we’re going to do two main things today.
First, as you mentioned, we're going to go back in time a bit and take a quick look at what metrics, data and general observations we've made in the first few weeks of the pandemic that basically led us to have an important shift in our confidence level heading into the months ahead.
Second, we’re going to reallydetail out the different ways we repositioned our marketing strategies in many cases or not in others to better adapt both the messaging and marketing strategies to the realities of COVID-19.
So, let’s jump right into it!
First, let’s talk about the first few weeks of March when reality really settled in and people started realizing that COVID-19 was for real and that our lives would probably be transformed for a little while. So let's face it, the current situation with the strict social distancing measures being put in place by governments has really compromised many businesses in the short term and will continue to affect our economy in the long run. You really can't deny that.
And people are actually even scared of stepping outside and simply don't have access to a lot of things they used to. So, there's a very important shift in both the broad consumer sentiment and the consumer behavior. And as a result, many business owners or marketing managers had to make the very tough decision to put a hold on their operations basically.
At J7 Media, some of our clients had to hit the pause button on their campaigns. Most of our clients who either own local businesses, retail stores or event planners and producers, they really had to basically put a complete stop to their marketing efforts.
(Antoine) Yeah, they’re closed.
(Nate) Yeah, a hundred percent.And you can't really be planning any events. That's just the law. However, it's definitely not the case for e-commerce clients.For many obvious reasons, e-commerces appear to be pandemic-proof and even thrive during the pandemic. But because of the expected shift in consumer sentiment that you could foresee, this really wasn't obvious at first and it definitely wasn't guaranteed. So it took us a while to understand that.
Let's just take a look at precisely what metrics and data we used to regain this confidence I spoke about earlier.
First, let's take a look at the effects of COVID-19 on the CPM. So the CPM, just as a quick reminder, is basically how much you have to pay to get a thousand impressions on Facebook ads. Our idea here was to put facts and numbers on something we thought could represent a good opportunity for us. We understood that it might have this effect on the CPM.
If you're not aware of the way advertising works on Facebook, it's basically an auction for everyone who wishes to put an ad on Facebook or Instagram or any other member of the family of apps on Facebook. So you're actually bidding against other advertisers to get placements for your ads in front of the right audience. So logically, if you have many local businesses, retail stores, event producers and many other businesses that have to put a stop to their marketing efforts, this means less people are bidding for the ads, which then leads to a dramatic decrease in CPM.
So, we actually compared the CPM numbers between February and March 2020 for nine of our main clients.And the results were really, really important for us because they actually showed that there was a very large and considerable decrease in the CPM.
The results that we got were: the average CPM for February for these nine clients was around $7.11. Compared to March, which was around $5.87. That's a decrease of around 18 percent.
(Antoine) You'll see these numbers continue to be quite fascinating also in April.
It was the case that it decreased in March, but the CPM is also very cheap in April. You'll see when I will present point number two.
(Nate) Yeah, exactly. Those were really the figures that we got at the time when we were first trying to answer that question with hard facts and numbers –
(Antoine) Of course.
(Nate)But definitely, we continued seeing that reality in the weeks after that. So the conclusion that we got here was really that if you pay less for ads, you're going to reach more people and your average cost per conversion will drop. So, in the endyou're just going to make more money by selling on Facebook and just – it's going to be easier, basically.
Second thing I wanted to take a look at was the consistency in results for some clients. So if consumer sentiment and behavior shifts and people keep more of their money in their own pockets, this would surely end up showing in our sales reports for our clients. So to learn the effects of the crisis on our general capacity to sell stuff, we took a look at the sales metrics for some clients who run really basic Evergreen campaigns, which means they didn't really have anything planned in terms of promotions, launches, discounts, anything of that nature.
Originally, our analysis was done in late March, so the figures weren't exactly the same as the one I'm going to put forward. But, I basically did it again just before recording this podcast to have the best results to show. But let's take a quick look at those figures.
So for client number one, – again, they're really Evergreen campaigns – nothing really changed except for the CPM and the general shift in consumer behavior. I compared two periods, the period from February 15th to March 15th and March 16 to April 15th.
For the first 30 days, that number one client invested $5100, generated a ROAS of 5.85. And for that second period, he invested $6600 and generated a ROAS of 7.89. That's an increase in spend of 25% and an increase as well of return on the ad spend of 31% percent.
(Antoine) Interesting. Just to be sure, the first period was February 15 til March 15 and the second was March 15 to April 15. Right?
(Nate) Exactly. And if people remember well, March 15th, or around mid-March was really the utmost point of when people really were talking about the COVID-19 and its effect. You could hear COVID-19 everywhere, see it everywhere in the news. So that was really a hard time for everyone. That's why I chose that period to compare with. Then for client number two, I'm comparing the exact same periods.
So, in the first period from Feb 15 to March 15th, that client invested $3000 and generated a ROAS of 6.55.And then for that second period he invested $6100 and generated a ROAS of 10.35. So, that's an increase in spend of 107% and an increase in the return on ad spend of 58% percent as well.
(Antoine) So it's the same. They don't have a specific campaign, a specific promotion. They were running an Evergreen Campaign, where you can buy things on their website yearly, right? There's not something different here?
(Nate) Except for minor changes to the ads for sure, because you always need to to renew your visuals and everything, we didn't change anything in terms of promos or anything of that nature. So, it's really the clients that are very consistent from one week to the next and who stayed consistent between those two periods. They're really relevant to compare because it gives you a really good indication of what the effects of COVID-19 specifically had on their ability to sell a lot of stuff.
(Antoine) So what does that tell you?
(Nate) Basically, it goes to show two things. It's obviously cheaper to advertise on the platform. You're investing more and getting a better return. And it also shows that consumer behavior shifted and more people are buying online and they're buying what they would have bought in retail stores. They’re going online to get it.
You know, the whole economy shifted in terms of what it offers. The way people have to buy their products is different now. You can’t just walk into a retail store and get that product for your baby or that piece of clothing. You really have to buy it online because it has to come to your door. It really goes to show that advertising on the platform is cheaper and that consumer behavior shifted.
(Antoine) So what else have you seen that’s different in the past couple of weeks, even months now, that you should do if you're a company and you advertise on Facebook?
(Nate) That leads us to our second topic for the day: how to leverage COVID-19 as an online business.
To me, the key statement here, I think, is to be part of the movement. Everyone's affected, our realities have changed and definitely not everything is as it was a couple of months ago. In a marketing context, to take part in the movement, there are three main key concepts that I want to talk about.
First is adaptation. Second is empathy. And third is communication. As a marketing manager or advertiser, you need to recognize the situation and understand how it affects your business model, adapt your service/offer, and be as empathic and transparent in your communications as you can – just to to detail out every every concept and talk about what I mean for each of these concepts.
In terms of adaptation, it's understanding what's the best way I can present and market my product or service in the current situation. People want to know how you're positioning yourself as a trusted service or product provider during hard times.
Empathy is that advertisers should stay positive and uplifting when promoting their product, but definitely not foolish and mindless. So, empathy does not mean that you should not be trying to make profits. It means that you should understand your consumer’s mindstate and sentiment is different at the moment.
He or she is probably legitimately worried about things like operational delays due to high demand or maybe shipping delays because everyone's ordering stuff at the same time. Maybe even something like health-related fear. So, what are the risks and issues the consumer might face when thinking about buying my product? And what actions are you taking to ensure that the consumer's expectations will match their experience down the road?
Last point was communication. I think here the key thing is transparency and straightforwardness. People need to know what they can expect from your business and what you're doing to help the cause. You should understand your consumers’ fears and make sure your marketing content answers those blockers. And you should understand what your consumer needs from your business in times like these and communicate your offer accordingly.
(Antoine) Do you have examples? Because these three points look interesting.
Have you tested a different approach with different clients to see how these three points can be integrated in your marketing campaigns?
(Nate) Absolutely. Let's let's take a look at a real life case with one of our clients. So this client – he's lucky. He's got an online training platform. It's pretty timely to have an online training platform at the moment. And precisely what we changed in the face of COVID-19 was three things: first, the offer, second, the message, and third, the visuals.
In terms of the offer, we decided to go with a 7-day free trial. It's really logical to do so. It's easy to implement. And we wanted to really give people the opportunity to stay active at home while trying out our platform before having to commit to an actual subscription. So it's something you give to your audience. They can try the platform for seven days, stay active, and it’s positive. You’re giving out something to help people, but it’s still a great way to have people know your product, understand it and even test it out.
(Antoine) Just to be sure of the offer. So, you were offering a 7-day free trial. Were you doing that before COVID?
(Nate)No, we weren't. We changed it to the 7-day trial just around that period, basically. And the idea was to show people – it was just a great time to start this offer because it shows that you're committed to your audience – you’re committed, you have empathy.You understand that people are probably going to try different platforms, different training platforms. They want to stay active at home. Everyone is dealing with the same thing and people need to stay active. As I said, just such a great way for people to learn about your product and test it out.
And in terms of messaging, that's exactly what we emphasized. You can stay active at home and try out our platform for free, for no financial commitment for 7 days. That's exactly what we put forward in the messaging. And people responded very positively to this. They were even thanking us for giving away 7 days like that. And people really appreciated having the opportunity to test it.
In terms of visuals, we actually changed the whole ad structure in the first few weeks when social distancing measures were put in place to make sure that people were seeing something relevant in the ads.So, we actually put people training in their own living rooms and stuff like that so people would really understand what this whole platform was about, that it gave you the opportunity to stay home and still stay active. But that's really just a super easy example. As I mentioned, it's very timely at the moment to have a training platform like that. He's pretty lucky.
(Antoine) Of course, but we need to change that. Because before, you were just selling straight up your platform, no free trial. So you changed your offer to the free trial of 7 days, right. So, you changed your messaging saying, hey, I understand that you cannot train in a park right now or at the gym, you need to train at your place. And you did the same thing with the designs, with the pictures, with the videos.
These are small shifts. But did they make a difference in terms of CPA, in terms of CPC? What kind of results have you been able to generate with that?
(Nate) We actually saw a pretty large decrease in costs per purchase. So the way we really calculate our returns with that client is by understanding the cost per purchase. I don't have the exact figures in front of me right now, but I think we saw something like a decrease of around 30% between the period just before COVID-19. We were basically offering different kinds of stuff when people were subscribing before COVID-19 such as a little gift, like training elastics or training tools to help you train.
But, we decided to shift towards that 7-day free trial, which was a more adapted offer, I think. If I remember well, it was just a drop of cost per purchase of around 30% between the two periods. And just to get back to the previous points, as you mentioned, we decided to change our offer, messaging and visuals. It's pretty easy to do so when you have a training platform. You can always get creative.
For instance, if you sell clothes, since shops are closed right now, people are looking for different options. You could transform your offer from having just a general discount to answering a fear that people might have when ordering online. You could offer free shipping and returns for orders above $100. That answers a blocker that a lot of people might have. Or, if you're selling kids toys, you can probably present your product as something that will keep kids entertained at home and that will give free time to the parents.
There's always a creative way to reposition your brand, reposition your product to make sure that you understand and communicate it in a way that it feels like you're aware of what's going on in the outside world.
(Antoine) I think that’s the whole point. It's not trying to look like someone just taking advantage of this situation, right. Because you don't want to look like this (sort of) company. But on the other end, the economy continues, right? People are buying things. People need to trade things again.
And if you are able as a company to thrive during this period – because we saw so many e-commerce businesses right now having record sales during the month of April, and record sales during the month of March. If you see that there's something that you need to do in terms of a shift in your messaging, and this can help you to decrease your CPA, or increase your number of sales, do it! The CPM is so cheap right now on Facebook.
Nate mentioned it. 18% lower from one month to another. I think it's even more than that right now from April to March. The numbers that we see on Facebook right now, it's completely crazy. I think I've never seen a CPM as low as what I see right now. And, you know, I think it will stay like that for a couple of weeks and even a couple of months.
Because it's not true that businesses, local businesses or other companies that are closed right now could go back on the platform and just advertise. They’re not ready yet. It means that there's more place for e-commerce companies, and online businesses as well.
(Nate)Absolutely. We're going to get back to it. But right now, if you have the ability or if your operations are set in place in a way that you have the ability to leverage online sales, it's absolutely the best opportunity in years to think.
(Antoine) It’s crazy!
(Antoine) Thanks, Nate, for your first point. I'll jump into the second point that I wanted to discuss today with the audience and with you.
At the beginning of the crisis, I think it was in the first week of March, Ryan Deiss, the CEO of Digital Marketer – by the way, if you don't know digital marketer, you should clearly go take a look at their content here at J7 Media. We are a member of their e-learning platform, and I clearly endorse and recommend this company to anyone who would like to improve their marketing skills.
Anyway, that being said, in the first week of March, I watched a webinar of Ryan Deiss where he was explaining two fundamental marketing concepts that any company should consider during this crisis.
Basically, he explained that right now, it's not necessarily the perfect timing to focus on revenue maximization. And what he meant by revenue maximization was the fact that people don't have a lot of money to spend right now. Just to give you an example, in the US alone, twenty two million people lost their jobs since President Trump declared a national emergency. So, if people don't have a job, there is a fair chance that the consumer buying power is way lower right now.
Now, if people don’t have a lot of money to spend, what do they have? People right now have time. People during COVID-19 have a lot of time. On March 18, Mark Zuckerberg, the CEO of Facebook, said, in a time of disaster, people rely on social services. We are seeing surges in traffic, especially in the areas most affected. So what he's saying basically is people are on social media more than ever.
So, if people have time and if people are on social media, but on the other end, they don't have a lot of money to spend, what should you do as a company or as an advertiser? And that's where the second point that Ryan Deiss mentioned in his webinar comes in.
Instead of focusing on revenue maximization, focus on audience expansion. The time is perfect right now to focus on your brand, to make sure that people know who you are as a company and to provide good content for free. And that's how people will remember who you are after the crisis.
Digital Marketer did that by offering their e-learning platform for free from March 15 to April 15. They were not asking for a credit card number. They were just giving their platform for free. And honestly, the results of their initiative are completely staggering. In a couple of days only, close to 40,000 people subscribed for free on their platform. And Ryan Deiss said it, they never had a marketing campaign as successful as that in the past.And he is quite confident also that a couple of these 40,000 people will stay on their platform and become clients at some point.
When I heard that, I asked myself, ‘how can we apply this audience expansion concept to our clients?’ Here at J7 Media, just to give you context, most of our customers are D2C e-commerce brands, but we also work with companies who are looking for leads to generate sales.And usually these companies that are looking for leads have a longer sales cycle that can take months, not only weeks. It can take literally months before a transaction happens with their customer.
For us, it made sense to go and tell these clients that right now can be a perfect time to focus on lead acquisitions, since people spend way more time on Facebook and since the CPM is cheaper than ever. Like Nate mentioned it earlier, a lot - a lot of companies just can’t advertise on Facebook because they are closed. This means that overall the auction – remember, Facebook is a platform where you can win the auction if you want to advertise your company – is easier to win since there are not a lot of advertisers on the platform.
I'm giving you all this context because finally we've been able to apply this audience expansion concept to three of our clients that have a longer sales cycle.
Basically, these three companies were roughly the same. First, they were looking for leads. Second, their sales cycle was more than 30 days. And third, all their transactions with their customers were happening over the phone. No online sales, no e-commerce, no online business this year.
Here's a couple of numbers for you. Client number one: first week of April, CPM is 20% lower than the first week of March. Client number two, first week of April, CPM is 31% percent lower than the first week of March. And client number three, first week of April, CPM is 32% percent lower than the first week of March. After we saw these numbers, we proposed to our clients to just accelerate their spend.
All things being equal, it's 20-32% cheaper right now to advertise on Facebook. Nate mentioned it earlier. It was eighteen percent for some of his e-commerce clients and online business clients. For these clients, it was 20-32% cheaper.
After seeing this opportunity, everyone agreed. Everyone meaning the client and us, the agency. Everyone agreed that it was the perfect timing to accelerate the investment on Facebook.
So we tripled, we literally tripled, the budget in the past few weeks of these clients only on a cold audience. Very important to mention it was only for a cold audience, no remarketing at all. And here are the results
Client number one’s CPL – and when I say CPL, I mean Cost per Lead – was 50% less expensive than the month before. Client number two: CPL was 35% less expensive than the month before. And client number three: 17% less expensive than the month before. Just because of the budget increase and the fact that the CPM is very low, we've been able to get literally six times more leads for client number one. Six times more leads, right? It’s a lot.
There are two things to remember here. Number one, if your sales cycle is more than 30 days. And number two, if your CPM is cheaper than usual, I encourage you to accelerate your spend.
Just accelerate your spend right now. I don't know how long it will last, but like I said there earlier, I think it's a joke right now. And to be quite honest, I've never seen ads on Facebook being so cheap. So COVID-19 is a tremendous opportunity for companies to advertise. And I think for most of the companies that can, you should do it right now.
And you know, Nate, I think there's another thing that you saw with some of your clients that people should know.
(Nate)Yeah, it's actually more of a general observation. I called my third point business as usual. You'll get what I mean by that in a couple of minutes. And it's strictly talking about e-commerces. Naturally, if your business has anything to do with events, retail or anything of that nature that requires people to get out of their homes, this doesn't apply. But what I mean by business as usual is that you don't necessarily have to rethink everything to have some success online during the crisis.
Let's take a quick look at what happened for one of our clients during the peak of the crisis. So well before COVID-19 became a thing, we had to plan a very important bike collection launch for one of our main clients. And to do this, we actually replicated the exact same strategy we used to warm up our audiences before Black Friday 2019. So for several weeks, we generated thousands of leads across Canada and were planning to have an exclusive launch offer for subscribers only.
The launch of the collection was set for March 23rd and was going to last 48 hours. And if people remember well, March 23rd was pretty much the peak of the social anxiety towards COVID-19. So I would be lying if I said that we felt one hundred percent confident about the launch of the new collection because at that point we didn't have the figures that we mentioned earlier. But, still we decided to launch everything as it was meant and we actually ended up generating very, very similar results to what we got using the exact same strategy during Black Friday 2019.
So, the exact same kind of strategy in two different periods – very different periods. And for Black Friday 2019, we generated $260,000 in sales with a ROAS of 4.88. For that bike launch in the peak of the crisis, we still generated $200,000 in sales and a ROAS of 3.37.
The point I'm trying to make here is that if your business is positioned to be able to sell online, if your business structure allows you to leverage online selling and you have different kinds of collections you're launching or products you absolutely need to be promoting right now, stuff you want to get rid of, if you have maybe new inventory coming in ... it's not the time to be thinking what I could do with that inventory in three to four months because I can't sell right now. There is an opportunity to do it right now.
You don't have to rethink your whole strategies, rethink your whole launch models and stuff like that. You can stick to your strategies. And consumers are ready to buy products and services online at the moment. And for several reasons that we mentioned, it's probably one of the best opportunities to leverage marketing online in the past years and probably in the years to come as well.
(Antoine)Definitely. I think for e-commerce and online sales, it's Christmas right now. It's Christmas for them. There's so much opportunity.
I think the key things to remember today for the audience are first, look at your numbers. Look at the metric that you see when you're advertising on Facebook. Again, one of the metrics that we love to look at is the CPM, because it tells us if it's expensive or if it's cheap right now to advertise on the platform.
Actually, it is cheap. It’s a cheap period right now. Now, if you can leverage that to your advantage, go for it. We mentioned it, especially for e-commerce and online businesses. It's really, really good for companies that have a long sales cycle that have these transactions that basically happen after two or three months after you generated a lead. These companies can benefit a lot from the COVID-19. You just generate a lot of leads right now. And these leads will become clients, I don't know, in three to four months. Accelerate your spend right now because it's so cheap.
So, I think at the end of the day, just look at the metrics. And like Nate mentioned at the end, if you're able to operate, you're running Evergreen campaigns and results are stable...just don't go crazy about it! Life continues! People buy things. And if you really need to change all of your approach because your product just completely changed, go for it. But if it didn't change that much, continue to campaign like you're doing right now. There's a pretty good chance that results will be stable or they will even be better.
(Nate) Yeah, absolutely. And if you think about it in a really macro way right now, it's like consumer behaviors are shifting and a lot of people are going to find online what they used to find in retail stores or in other selling points. It's a great opportunity for companies who aren't doing so much online to reposition themselves and get known, get people to know your product, and get people to buy your product right now. And this will build a habit that you'll continue to thrive on for the months to come as well.
(Antoine) Definitely! Okay Nate, anything else before we finish this episode of Social Selling?
(Nate)No, I think that pretty much sums it up.
(Antoine) Okay, perfect. So for everybody who will listen today, thank you very much. We encourage you to look at the right metrics in your manager, and accelerate your spend if you can. We're excited to see you soon for a new episode of Social Selling!