Music startup breaks all the rules in Facebook advertising — and gets 397 conversions for $19.43

My friend Jaron Ray Hinds shared this with us today — a social music startup that is getting conversions for 5 cents each.
Screenshot 2014-01-07 at 1.12.52 AM

No jedi tricks, mass-scaled ad multiplication, or crazy targeting.

Just optimized CPM bidding against 6 images he’s testing.

But which “well-established” rules did he break?

  • Running strictly (RHS) right-hand side ads: we know the newsfeed is seen as more organic and has higher CTR. But sometimes the RHS performs better for website conversions. They wanted new user acquisition here.
  • Allowing the frequency to balloon to 40: That means each user saw the ad 40 times– so many of them likely saw more than that. We don’t like to let newsfeed ads get over a frequency of 1.5 or RHS getting over 5-6, as that causes ad burnout.  Yet, the CTR is still excellent.
  • Running only a handful of ads: 12 ads total on 6 images. Not crazy multiplication against hundreds of precise interest targets. But he is using custom audiences.
Why is this working:
  • Optimized CPM is smarter: We knew about it over a year ago, but haven’t seen it really take effect until recently. But bidding still can help if you know how to set manual bids per action (see below image).  Notice the effective CPM is only 5 cents on the first ad.  This is US traffic.
  • The target clients are inherently social: This startup is targeting DJs in major metros. Their fan acquisition campaigns often yielded fans for 2.5 cents, said Mr. Hinds. Of course, consider whether this applies to your vertical, especially if you’re in B2B or something not as sexy.
  • A winning graphic: You don’t know until you test a few of them. Even experienced pros can’t reliably spot which creative is going to win.
Screenshot 2014-01-07 at 1.21.57 AM

Clearly, Facebook is simplifying the ad experience — fewer ad units, more of the work being done by their algorithm. It would be as if Google AdWords were to select your keywords and bids for you — allowing you just to focus on crafting great content and servicing your customers.

Readers, what do think? Have you noticed improvements in your ad campaigns in the last few weeks?

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