Many businesses are finding new challenges and opportunities as a direct result of COVID-19.
Facebook is helping businesses find a new path to recovery by providing 100 million dollars to up to 30,000 small businesses in cash advances and ad credits in the coming months.
This information was released a week ago and Facebook said, “We’ll begin taking applications in the coming weeks.” The details on the application are slim, but it’s clear that the cash advances and ad dollar rewards are reserved for small businesses who have been affected by the Coronavirus.
How should small businesses use their Facebook ad credit?
Facebook hasn’t released details as to how it will distribute the funds, but if the funds were equally distributed, that will be $3,333, for each business.
While ~$3,000 isn’t a tremendous amount of money for a Facebook advertising budget, it is enough to make a difference for small businesses. It’s likely that many of these small businesses may be running Facebook campaigns for the first time, meaning $3,000 in ad budget will mostly be used to test markets and hopefully prove a favorable return on ad spend (ROAS). In theory, any conversions would be a positive ROAS given that these businesses haven’t paid for these placements with their own money.
So, the question is this: How should small businesses utilize a one-time, relatively low-budget, ad grant?
Small businesses receiving aid from Facebook will get the most from this budget by doing one of two things.
1) Lean into professionals (freelancers, or agencies) who will accelerate the learning process and deliver a positive ROI quickly
The downside to this approach is that payment for professional services may be difficult for small businesses to afford. However, due to the current economic situation, there has been an increase in freelancers in the advertising industry offering their services for management and ad consulting. Working with a freelancer allows small businesses to easily set up these campaigns, without needing to commit to a full-time hire.
2) Start slow, and use your budget for qualified traffic
Many novice Facebook advertisers make traffic-driven campaigns, when conversion-driven campaigns are almost always a better fit. Small businesses that want to set themselves up for success should begin with a conversion-driven campaign. Because the ad budget may be limited, advertisers should target low-hanging fruit rather than a broad audience.
We recommend looking at the estimated audience size to ensure that audiences aren't too broad, or too specific. Advertisers should aim to be in the middle of the green section. Users that are already aware of your business or who have already visited your website are going to be the audiences with the lowest hanging fruit, and be the most likely to convert.
Businesses, regardless of their business model, should make retargeting a priority. eCommerce businesses will have the ability to target users who have put items in their carts, but not made purchases. B2B businesses can target users who have visited high-intent pages.
Finally, be sure to spend an appropriate amount of time building your demographics, by adjusting age, gender, income level, etc. to narrow down the audience to those that are most likely to convert. Opt for manual over automatic placements (the default), stick to newsfeed and stories (exclude messenger, third-party sites and apps, etc.).
Who will be a good candidate to receive these funds?
We don’t know how Facebook will be determining which businesses they will be awarding the grants. That said, it is safe to assume that Facebook wants businesses to succeed with these ads, so they will likely continue to pay for ads beyond the initial grant amount.
Businesses doing well right now (such as medical, wellness, on-demand media, finance, and many service businesses) are good candidates to receive funds for ad dollars on Facebook. There has been little information revealed at this point as to the requirements necessary to qualify for a grant, however it’s clear that Facebook will want those who receive a grant to be successful.
Even small businesses that have had a shaky history running Facebook ads can still be successful. 97th Floor has helped companies with years of lackluster Facebook performance turn things around.
Small businesses hoping to get some ad budget should implement the Facebook pixel on their site even before applying. That will ensure the site is collecting appropriate levels of data for advertisers to act on.
What does the paid media landscape look like?
While Facebook and other social media sites are seeing high numbers of users, the amount of money being spent on ads is decreasing.
97th Floor has seen rising bid costs in profitable and high-demand targeting, indicating that advertisers are happy to settle for a lower ROAS so long as it guarantees conversions.
We are seeing decreases in conversions across many industries. As a result, many businesses are reducing their ad spend, leaving gaps in once competitive verticals. But now is not the time to pull back on advertising.
Instead, savvy digital advertisers are looking for these gaps in the marketplace, and are proactively identifying opportunities to double down on possibly cheaper and more cost-effective targeting options in Facebook and other advertising platforms. Businesses don’t need to spend more; they need to spend strategically.
We are seeing some areas with cheaper bids. But when that data is combined with fewer conversions it can be hard for small businesses to know if their ads are really bringing in value. Our recommendation for measuring efficiency remains the same: measure ROAS. If conversions are decreasing, but your bids are decreasing as well, that increases the likelihood of a positive ROAS. Advertisers should make decisions on a campaign’s effectiveness based on this metric.
It’s important to realize that while conversions may be down now, spending habits will again stabilize and those brands who have remained top of mind for their market will emerge and earn business. Brands should invest resources into branding campaigns, even if there are no ad dollars behind them. This can take place in areas outside of social advertising, such as SEO, email marketing, content marketing, organic social, and more. Businesses that make it a priority to stay top of mind will win customers back once spending habits return to normal.
97th Floor is committed to helping our clients succeed. And we’re also dedicated to making the internet a better place, and we applaud Facebook for their decision to help small businesses in this time of global need. We will continue to cover and respond to the updates from Facebook’s $100 million grant, as well as any similar opportunities that arise.