Cost Per Like Campaigns On Facebook: The CTR, Conversion Rate, Reach Tradeoff

Managers of Facebook Fan acquisition campaigns are often faced with a dilemma when creating campaigns. They often ask whether or not they should they go for a broad audience and greater reach or should they go narrow and target audiences that might have a very small reach but a high affinity for a product.

Marketers also frequently ask if they should design ad copies solely with click though rate (CTR) in mind or not. The thinking goes like this: since the incremental effort in liking a product or brand is small and there is no monetary transaction involved, a person who clicks on an ad will likely also like your fan page.

However, the answers to these questions are a bit nuanced.

 

The graph above shows data from a Like acquisition campaign with anonymized campaign names for a technical product. The size of the bubbles indicate reach while the color represents the cost per like (the darker the color, the lower the CPL). I have only labeled some of the campaigns in the interest of clarity.

Several things become readily apparent from the graph:

  • There is one campaign — Extreme Geeks — that has a very high CTR and conversion rate. While the CPLs are very low on this campaign, it does have a small reach.
  • There is a relationship between CTR and Conversion Rate (CVR). The higher the CTR the higher the CVR. However, the relationship is only moderately strong.
  • The broad targeted campaigns have good reach but poor conversion rates.
  • There are some campaigns that have good reach, good conversion rates but poor CTR. These are campaigns above the regression line.

Thus, the data highlights the typical issue in scaling many campaigns. While one can highly target audiences and get great CPLS (such as the Extreme Geeks campaign here), the reach of these campaigns is small. On the other side, if one targets broad audiences, it attracts a variety of consumers and as a result the conversion rates drop.

Note that one of the broad campaigns has a good CTR but the CVR is still poor. Efforts to improve CTRs of these campaigns would only benefit partially, as high CTRs do not ensure high CVRs.

Finally, from an ad copy optimization lens, the campaigns with high CVRs and low CTRs are promising. If the marketer could improve the CTRs of these campaigns, he or she could potentially get more “likes” economically at scale.

7 Tips For Managing A Like Acquisition Campaign On Facebook

Here are some tips if you are building or plan to build a like acquisition campaign on Facebook.

  1. Start by targeting audiences that have a high affinity for your product. These campaigns will have small reach but will tend to have the best CTRs and conversion rates.
  2. Build out broadly targeted audiences to get additional traffic but do not bid on them too aggressively. This will help you scale initially while you build out your campaigns.
  3. Build new segments that are similar to the segments that are working well initially. In the above example one would go from targeting extreme geeks to geeks.
  4. Focus on improving ad copies for those campaigns that have a low CTR but high conversion rate.
  5. Leverage Sponsored Stories, especially when you already have many fans. Sponsored Stories leverage the virality inherent in Facebook and can help you acquire Fans at a significantly lower CPL. I have seen several instances where sponsored stories have helped Facebook like acquisition campaigns scale without compromising on CPL.
  6. CTRs of ads on Facebook will drop if they are not changed regularly. I have discussed this in detail in a previous post. To prevent this problem, I recommend you constantly test new ad copy and so that new copies are ready to go when your current ads CTRs start to decline.
  7. There are times when broad targeting can work better than highly targeted segments. If your brand or service has a large social audience, Facebook appears to do a better job targeting than it would if you targeted to small segments. Hence, it is always worth experimenting with a broadly reaching campaign.

Following these steps will help you scale your campaigns without compromising on CPL.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Analytics | Search & Analytics

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About The Author: is Director, Business Analytics at Adobe. He leads a global team that manages the performance of over $2 BN dollars of ad spend on search, social and display media at Adobe.

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  • http://derallo.me Derek Pangallo

    I have found that it helps to do broad targeting on a CPC model, then find the highest CTR ads of that group and make them CPM. With this approach, Cost-per-acquisition ends up being 50% less than with standard CPC ads.

 

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