[FB Ads Case Study] A Strategy That Cut Cost-Per-Lead by 90.6% And Increased CTR 9.3x

Have you noticed how expensive the Facebook ads became compared to the good old days (until approx. Q2 of 2017)?

It is safe to say that every advertiser faces this issue nowadays — the average cost per click (CPC) has risen considerably.

With this trend, it is harder and harder to achieve positive ROI on paid advertising. It is possible to boost ROI with several optimization tactics. But the hard truth is that too many campaigns that were profitable a year ago, don’t make financial sense anymore.

I was approached by a client who was struggling to keep their advertising profitable. Their break-even point for a cost-per-lead (CPL) of email signup was around $3.50. That was calculated with the long term 3% average click-through rate of their email marketing.

As their CPL crept up to over $3 in the second half of 2018, the ROI approached the break-even point. It was clear that the business model could not cope with even further increase in advertising costs expected in Q4.

I pointed out several possible optimizations of the sales funnel and the back-end to increase the overall conversion rate.

The main problem still remained — the cost of leads was too high.

The strategy that cut cost per lead by 90.6%

The Facebook campaign generated leads (email signups) for $3.11. The quality of the leads was consistently decreasing due to poor open rates of the follow-up email campaigns.

The cost per lead from Messenger campaign: $0.29!

The ‘Messaging Conversation Started’ result means that the user clicked on our ad and engaged with our chatbot in Facebook Messenger. From that point, they are in our subscriber's list and we have the permission to send them messages.

This is how we went from $3.11 to $0.29 per lead:

1. Used “Messages” as the Objective in Facebook Ads campaign
2. We sent visitors to our Facebook Messenger chatbot
3. The users were then engaged in a conversational sales funnel within Messenger.

The epic benefits of switching to Send-to-Messenger Facebook campaign

1. Everyone who clicks our ad and who interacts with our bot automatically becomes a subscriber. The subscribe ratio was approx. 98%… The remaining 2% didn’t make it to the bot.
2. To put this into perspective — An average landing page has a 2–10% conversion rate, meaning that 90–98% of clicks are lost forever. (Yes, a chunk of them can be rescued by re-targeting)
3. We have the name of each contact. Their real names, tied to the Facebook profile. More and more users nowadays provide a separate sign-up email that they treat as disposable. With messenger marketing, we can easily ask for their real email later on and continue the conversation there.
4. The best part: (A) the typical open ratio of Messenger campaign is consistently over 80%! and (B) the click-through ratio is over 20%.

Stats from a typical broadcast with Messenger marketing: No more 10% open rates. No more 2% CTR’s.

The stats from a broadcast sent to a 34k email list. The leads were acquired in almost two years period, approx. 30% of them were from organic traffic:

Note: There are specific rules enforced by Facebook to keep Messenger spam free. It is in our interest to keep the interaction friendly, helpful by providing value. Not abiding these rules can lead to loss of account.

The following table sums up the effectiveness of the email and messenger. It shows that in order to achieve similar results, the messenger campaign requires a 9x smaller number of subscribers:

The reasons behind these phenomenal results:

• The user gets a Facebook notification every time we send a broadcast to our list.
• People are compelled to open every Facebook message they receive. It’s an entirely different game compared to email.
• There are no promotional or spam folders in Messenger (yet). It is still the best time for any business to benefit from Messenger marketing and to build the list cheaply before everyone else starts doing it.
• The Messenger users feel like they have more of a personal connection with the brand compared to the generic marketing emails. It is similar to when emails just started to roll out back in the 1990s.
• The bot users can engage in conversation and obtain an instant answer by chatting with a bot powered by AI and natural language processing. This is not possible with email — it further reinforces that personal feel of a chatbot conversation.

Conclusion: Is Facebook Messenger the New Email?

Without a doubt, email is becoming less effective for marketers. It is far from being dead yet, but it’s not exactly the marketing channel it used to be.

Just take a look at your inbox — how many emails you have subscribed to are going straight to trash without opening them? Exactly.

On the other hand, the Messenger is delivering the awesome results I have shown above. The efficiency will level out over time eventually after everyone will join the party. It is impossible to predict the exact time frame when this will happen.

As of writing this post in April 2019, only a small percentage of companies are aware of the potential of messenger marketing.

I expect to see proportionally more advertisers in this space in the Q4 of 2019.

The wise companies who seriously consider starting with messenger marketing this year will enjoy the benefits until the market will become more saturated in 2020.

Feel free to reach out if you have any questions about this case study or about Facebook Messenger and chatbots in general.

Let’s have a chat about how these growth hacks could benefit your bottom line.

Shoot me a LinkedIn message or visit our site.

The post was first published on Medium.