WILL FACEBOOK ADS WORK FOR YOUR SAAS COMPANY?
The right answer is, it depends. It depends on whether your internal processes are all in place, meaning, user onboarding has been optimized and has good conversion rates (free trial to paying user). It depends on the quality of the content you’re using in your ad campaigns, and it also depends on the structure of your ad campaigns.
At Fantom Agency, we run successful Facebook ad campaigns for a lot of SaaS companies. By doing so we’ve been able to find things that successful advertising campaigns have in common, what works and what doesn’t.
Below are some of the items that have proven to work successfully for our clients’ user acquisition efforts:
- Lookalikes Based on Conversion Event
- Interest Targeting
- Retargeting Sequences
- User Activation & Onboarding Campaigns
If you’re just getting started trying to prove Facebook ads as a viable and profitable customer acquisition channel for your SaaS, then this article will give you a game plan to get started in the right direction, given that your onboarding is in place.Now, before you get too excited, there are a few ideas we need to address first:
1) Install Your Facebook Pixel Now – Even if you’re not planning to get started with ads yet, do yourself a favor and install the Facebook pixel and conversion tracking on your site today. The pixel tracks all activity on your site for 180 days. This way, when you do start running ads, you’ll have data to help Facebook’s algorithms optimize your accounts better.
2) Set a target Cost per Acquisition (CPA) – Before you start advertising on any platform, it’s important that you estimate how much you can afford to profitably acquire a conversion. Your target CPA can be calculated with some simple math based on your average Long Term Value of a customer and your upgrade percentage rates. But it will also need to take into account your target profit margins and your cashflow.
3) Always Be Testing – This article provides a general blueprint that will work on most SaaS companies. But your company is unique. So while I encourage you to test everything in this article, you’ll need to figure out what works best for your company.
4) Send Traffic to your Homepage – Yes, you can definitely use specific landing pages as well, but the great thing about SaaS companies is that their homepages are usually optimized as high converting landing pages. Take advantage of that situation to start driving traffic there.
5) Promote a Free Trial Offer – People on Facebook usually aren’t ready to buy anything just yet. So it’s usually a good idea to build awareness and educate them about your product first by offering a Free Trial or a Demo. Most SaaS campaigns are optimized to acquire more free account signups. If you have a very effective follow-up process, you can consider promoting a lead magnet (ebook, etc) as well.
OK, so with those guidelines in place, let’s get into it…
These are the 4 Facebook Campaigns that your SaaS needs to be running…
LOOKALIKE BASED ON CONVERSION EVENTS
Lookalike audiences are usually the single highest converting prospecting campaigns that we run. For most of our SaaS clients, they account for over 70% of our total budget.
A Lookalike is an audience that Facebook creates for you based on people who their algorithm thinks are most similar to your existing custom audiences. A Lookalike can be created based on your website visitors, an uploaded email list, or from people who have already converted on your site.
Our favorite, most profitable audience to get started with for most clients is a 1% Lookalike based on the primary conversion event that we’re optimizing our campaigns for.
When you’re starting to experiment with Facebook ads, you’ll want to stick to a 1% Lookalike because it’s the most relevant (in the US, this audience size will be ~2.1 million people). However, once you’ve had some success and you’re ready to scale up a little, you can expand to 2% and larger Lookalikes.
If the 2 million people in your Lookalike audience is too large based on the estimated size of your total market, then you can try reducing your audience size by including broad interest targeting together with your Lookalike. This will give you a smaller, more relevant audience.
Generally, you’ll want to have at least 1,000 people in your base audience so that Facebook has enough data to build an effective Lookalike audience. We’ve been able to see that the sweet spot for best audiences tends to be around 3,000 – 4,000 people in your source audience.
If you don’t have enough data on your conversion pixel yet, then you may want to start with a Lookalike based on website visitors or from a customer or subscriber email list. Then, when you have more conversions on your pixel, you can start running a Lookalike based on converters.
If your company is very new and you don’t have any significant customer info yet, then it might be better to wait until a later time to get started with Lookalikes.
INTEREST AND BEHAVIOR BASED AUDIENCE
In addition to Lookalikes, you’ll also want to test out interest targeting (this includes Behavioral and Demographic targeting as well).
Interest targeting is a great way to go after your perfect customer persona based on their known interests and affinities.
Some categories to keep in mind for targeting are:
- Other companies who service your customers
- Other software used
- Professional organizations
- Job titles
The goal with building interest audiences is generally to stay as relevant and focused as possible. Don’t be tempted to get too broad and sacrifice relevancy.
Stick with the low hanging fruit opportunities.
Although Interest targeting should be included in your initial testing, we generally find that it isn’t as effective as Lookalike target. But when you’re just getting started, Interest targeting is a great way to get some initial data.
Messenger has a built-in menu system that appears at the bottom of the app but also includes a number of other ways to display menu-based information including “Quick Replies,” buttons, lists, and carousels.
Retargeting is usually the highest ROI campaign you can run.
In fact, you should probably get started with Retargeting on Facebook today even if it’s the only campaign you set up.
We generally set up several different retargeting strategies simultaneously.
Visitors are always hottest shortly after they visited. So we hit them with 3 different ads in the first three days after they visit.
First, we’ll create an ad set targeting people who have visited in the past day.
Next, we create a second ad set targeting people who visited in the past 2 days and excluding people who visited one day ago.
Finally, we have an ad set targeting people who visited 3 days ago and excluding people who visited 2 days ago.
For each of the retargeting sequences above, we will use a different ad creative that emphasizes different benefits or features of your product.
In addition to the 3-day sequence above, we also set up broader retargeting campaigns to target people for a longer time period after they visit.
First, we’ll set up targeting for people 30, 60, or 90 days after they visit. You’ll need to test and figure out which of these time frames makes the most sense for your company.
The ad creatives in this campaign can be very similar to the ads we use for cold audiences.
In addition, we’ll run a 180-day retarget ad set in order to stay top of mind for people who visited a long time ago but might not be ready to convert yet. We use this 180-day campaign to build the brand and the community.
The 180-day audience is a great place to promote blog content to relevant people who are more likely to eventually convert.
USER ACTIVATION & ONBOARDING
So this is a bit of an under the radar strategy that not a lot of companies do.
But you can do it for a pretty small budget.
Once people have signed up on your site for a free trial or a demo, they’ve proven themselves as very interested in your product. You’ve gotten them this far, now it’s time to get them to upgrade.
Try retargeting people who have converted on your top-of-funnel offer (usually a free trial or demo signup) and get them to take the next step.
But remember to exclude people who have already become paying customers.
Trying hitting people up with an onboarding ad as soon as they sign up for a free trial.
Here are a few ads you could consider promoting to these people to move them closer to a buying decision:
- A webinar teaching them how to start using their trial account and getting more value from it
- Ebook download (you already have their email address so you don’t need to ask for it again).
- A video ad teaching them how to use the product
- Case Studies (this can be a video or a link to a blog post)
If people still haven’t onboarded or upgraded toward the end of (or after) their trial period, you could also consider offering them a discount. Or an extension of their trial period.
You should also try to incorporate similar types of content into your email onboarding campaigns.