Small business owners have a few top questions like: How do you create Facebook ads? How do you identify your ideal target audience? What’s the best way to allocate budget? What are the best channels to use?
In this fantastic first installment of a three-part interview with our brilliant Senior Manager of Growth Marketing, David Lambert, we discuss the questions we hear most from small business owners and how to navigate being new to marketing.
Read the Interview
Jill McKenna: Hello, everybody. Thanks for joining us today. I am Jill McKenna. I’m the Campaign Marketing Manager here at Ruby, and I am truly delighted today to be speaking with my friend and colleague David Lambert, who works with us at Ruby. David, can you say a little bit about what you do for us and your background?
Hi, Jill. I take on all of the paid media here at Ruby. So I do all of our digital advertising spend, Google Analytics, Google ads, Facebook ads.
So mostly anything that we do from a paid perspective, I’m involved in one way or the other when it involves marketing, and then really trying to tie that into long-term goals and optimization and efficiency. So that’s where I spend the majority of my time, as well as helping some of our systems connect and talk to each other.
I have a whole list of questions for you, but I want to start with the one that I hear the most when I’m in any of the marketing groups I’m in—the women in business groups, the entrepreneur groups. The number one question that small business owners seem to have that I encounter is: How do you do Facebook ads and Facebook boosts successfully? So first, can you tell us if there’s a difference between boosts and using the ads?
Yeah. The difference is pretty small. It’s pretty minor, but a boosted post is essentially something that you just put out for free. It’s an article, it’s a picture. It’s a status update, but then you’re telling Facebook: “Hey, I want to show this to an audience outside of the people that come to my page.” So I want to be promoted to, there’s different targeting parameters, but essentially it’s a post you’ve already put out there, and you’re like, I really love this post. It’s getting Likes. I want more people to see it. So then you just put it out into the world. An ad creation is essentially the same thing, but it didn’t start from a post that you’ve already done. And that’s the biggest difference. All the targeting options, being able to pay to promote it, are still all there. It’s just kind of where you started in that initial journey of things.
Great. And to that end, for both, you really need to know who your target audience is, right? You really need to know who it is you’re targeting. Otherwise you’re just throwing salt into an ocean and it’s not going to make a difference. So how does a small business owner go about identifying their ideal customer profile or perhaps their target audience?
Sure. That’s a great question. So you worked hard on your content. You know what your messaging is. And really the biggest point is: What audience do I show this in front of? Just like you’re saying. There’s a couple of ways to go about that, especially on Facebook. There’s so many different parameters, whether that’s demographics, whether you’re going after men or women, location, industry, there’s a lot of things. It’s easy to get caught up in really dialing that in super narrow, or going way too wide. The biggest thing is to find a balance. And the easiest way to do that is connecting your Facebook to your website. So you add a little script—they call it a pixel—and basically it evaluates your website traffic.
And you can go then into Facebook and say, “Hey, Facebook, do your thing. You’re an algorithm. You’re automated. Look at my traffic and find people who are similar to that.” So they do a lot of legwork, and there’s different percentages without getting too technical, but there’s like a 1% match, a 2% match, 3% match and so forth, I think up to 10. That’s a really great place to start, because you don’t have to necessarily ping down everything you’re doing. And Facebook does a good job of trying to find those people. So I think that running those kind of campaigns, along with another segment, or audience, is really powerful. So generally I start with one lookalike campaign or ad that targets what Facebook is automating, and then create an audience, a saved audience, based on who you think your customer is. Whether that’s industry specific, like lawyers, or home services, or if it’s demographic, if you know that [age] 30–45 is really where your sweet spot is with people resonating with your product, you kind of drill those down.
And Facebook does a really good suggestion for how big your audience size is. If it’s too narrow, if it’s too broad, they’ll tell you. There’s a little graph that it tells you exactly where you are. So that’s a good thing to look at in general, to know if you’re close or not, but that’s where I dig in. And then you can play with going after different little audiences. I’d start out a little broader, unless you know that this is your customer. Like, if you only sell to barbers, just go with that. You don’t have to do ages, you don’t have to go too narrow, but you want to pick a point where you’re kind of comfortable and it’s all about monitoring that success, and how many click-throughs you get, and the web activity. So I’d start a little broad, unless you are a hundred percent certain who you’re talking to, and then you can narrow it down over time and kind of save yourself some dollars there.
And when small business owners and small business managers think about starting to dedicate a budget to ads on Facebook, or on any social media, how should they start to think about allocating dollars? And what’s a logical way to go about creating that budget?
That’s a great question, and it comes up in 100% of conversations I have when I’m consulting for this kind of thing, it’s kind of an art and science. So it is, there is a bit of unknown of, especially when you’re starting out your first ad campaign, you really don’t know the response, or how many customers, how many potential customers have to see your website or see your ad before they convert into a sale, or even a lead. So it has to be something you’re comfortable with. You have to have enough for it to be impactful for, you know, a few hundred dollars generally a month would be pretty minimal. So you want to be looking at it in that framework. But if you know you have a high value customer, a lot of times people take a portion of what that first sale will be.
If your first customers walk in the door and spend a thousand dollars, you could easily calculate: I’m willing to spend 200 bucks to acquire one customer. And then I’m going to test a campaign—say I’m going to spend it a thousand dollars over the course of a month and kind of see what leads I get, how the response is and formulate it there. So it’s really important to know what your lifetime value of your customer is. But a lot of business owners, that’s a sticking point for them. They’re not too well-versed in that. In that scenario, I usually suggest, if you know your profit per month, take a percentage of that, that you’re comfortable with, whether that’s 10, 25% of your profit, try to utilize that for finding future customers, because that’s going to help bring leads into your funnel, without getting too technical, of like you’re building up an audience that you could sell to next month. You always want to be bringing people in of interest so that you’re not struggling, you’re all of a sudden, “Oh, I don’t have enough customers this month or this week. And now I don’t know what to do. I need to just spend enough money to keep the doors open.” You want to be trickling that out, and being better about optimizing or refining that, so that people are able to find you amongst the other free ways that you’re promoting yourself or improving your website. So I’d just kind of pick something that you’re comfortable with, whether that’s $100, $200, or, if you have a 10k budget, great, I probably wouldn’t throw it all at once. I’d probably slowly ramp up, but it’s deciding what you can sustain as a business and try to lure in more people to see your message.
So, some broader questions, and transitioning to just some things I hear from: I know a lot of entrepreneurs, I know a lot of small business owners, and I see some patterns develop once their businesses is maybe a little bit established, but they’re not totally sure what to do next. And marketing or advertising can seem really overwhelming, and like something that would be a time-suck to learn and start doing. So. I’m curious if you can give a brief overview of some of the best channels for advertising for small businesses. What’s the best return on investment they can seek through some channels?
Sure. There’s a lot out there, so it is easy to get daunted. I would say probably, my favorite channels, especially starting out, are generally Facebook or Google search ads. And those are for two different reasons, Google search ads, you can really get to the intent of someone. So when someone types something into Google, flowers nearby, or pool cleaners in Houston, Texas, and you see the ads pop up before the organic results, and those are people bidding on those strings of words, they’re keywords, they can be phrases, and it’s really easy to get to that intent. They cost more than, say, going to Facebook, but you know that person is actually looking for your service. So it’s easier to get into that mindset and craft your message to someone looking for pool cleaning in Texas, rather than interrupting their feed through Facebook.
And that’s more if you’re a service business. I feel like that’s really strong if you offer a service, just because you can talk to that person looking for that right now. So you have a good chance of getting there, but it’s going to cost you a little bit more for someone to click on your ad, say, five to a hundred dollars per click, depending on the audience. Like, if you’re a dentist, you’re going to be paying quite a bit of money for that click, but if you’re a pool service cleaner, it might be $15, $20 in your area. It’s an auction, so it’s hard to say just flat out, but that wouldn’t be uncommon. For Facebook, you’re kind of interrupting. They’re searching for other things, or reading news articles. And the cost is much, much cheaper. So a cost per click in that scenario could be a dollar or two; $10 would be pretty high for Facebook, depending on your segment. It could be well above that. But for general small businesses, I think that that’s realistic.
But that ad is shown to many, many more people if you set it up in that way. So even if they’re not clicking, hundreds of people are going to see your graphic. And it’s a good way to kind of establish brand, especially for consumer products like sunglasses, or food products, or something I could buy on Amazon and ship to my house in two days, those perform really well on Facebook, not that services don’t, but it just takes a little bit longer, because you’re interrupting their search. They weren’t thinking about pool cleaners necessarily.
And then they have to kind of categorize that in their mind. And if you’re shown to them several times, then it’s likely that they could convert, or they could be more interested, but it’s not as direct to the conversation as say, Google search ads would be. So I think that those are probably the best, and they’re also the biggest platforms. So if you figure those out for your business, it becomes a big staple of your marketing campaigns, and you can refine and have these new, very well-known channels that are very effective, if you figure out your formula for your audience.
Awesome. How does a business owner go about knowing which channels might be best for them? Are there certain channels that are better for certain industries? You explained a little bit of that, but I’m wondering if there’s a hard and fast rule for some of that.
I wouldn’t say super hard and fast. It tends to be a little split that way, where I would say physical services, or like people powered services, Google does a really good job. If I’m looking for an accountant, if I’m looking for a trusted professional, I think Google is just better about that. It’s more likely that they’re going to see your website. So you have more real estate for them to actually click, because they’re looking for that. So it tends to be a little higher value, but Facebook is super good about digital services. If you’re selling widgets, if you’re selling marketing services, if you’re selling some ebook, or even Amazon books, those are kind of the impulse, lower value, is a really good way for a lot of companies to start out there. But I wouldn’t say that if you’re in this segment, you can’t advertise on both.
I’ve seen it work across the board. There are ways that I would tend to go and test out. That’s the fun thing about advertising, or the not-fun thing if it’s your dollars and they’re not directly turning, but it is sort of experimenting on every channel. The investment level also really dictates where you’re going to go. Most people can’t… The small business, their first venture in advertising—I would pick one channel and really try to walk up your experience and see kind of the feedback you’re getting from it, whether that’s web traffic, whether you’re starting to get leads, rather than say, “alright, we’re ready to go, we’re ready to advertise—let’s go on all channels.”
I think that that’s the biggest thing that holds people back when they’re doing small businesses—”I need to be everywhere, right now, all the time.” And that’s really not the case. I find you’ve got to put your effort in one area and you can have it split up a little bit, but you really want to figure out one channel, whether that’s getting your website dialed in, whether that is getting a Facebook profile where people are starting to interact and comment on your stuff, or whether that’s trying Google search ads, or display ads, or YouTube if you happen to have video content, and then trying to figure—once you get some legs there and are sustainable—then you can start to think about bringing on these other channels and broadening your audience to your products.
With that train of thought, what are some easy ways to advertise that people often look past? Often, it feels so overwhelming, we think we’ve got to reinvent the wheel, and we kind of dive in the deep end and then we feel overwhelmed and quit our efforts. So what are ways that small business owners and entrepreneurs can look at advertising in just small ways to see if they’re happy with what it might yield?
Sure. I always think the most underrated campaign is not direct advertising, but word of mouth. I think we overlook that so much as just businesses in general. It’s not that well understood. I would put money toward your customer referral programs or anything, because you have someone that’s happy with your service. It can act like an advertising avenue, if you say to your happy customers, “You refer someone, we love the business.” Especially if you’re a small business, making a case, people love to help out services that they really enjoy. So I would think about putting together a program where for every sold referral, you give them some incentive, whether that’s 50 bucks, whether that’s 10% of the sale. I think that that’s a really good avenue, and it really helps you think about some of the biggest assets you have, which are your customers, and people really take recommendations and testimonials very, very highly. It’s a channel that I’d really look at.
From an advertising perspective, ones that we haven’t really hit on are, it’s a little more difficult, but those influencers, they can be really beneficial to your company if they speak directly to your customers. Or even better, is partnering with a company that’s aligned with you, but not competitive. So if they’re complimentary, that’s a really good channel to get into. So if you sell digital marketing, like SEO, search engine optimization, but that’s all you do, and you find a company that does graphic design, or they do web design, try to partner up with another small business and say, “Hey, we can pass referrals back and forth. Here’s a finder’s fee for it both ways.” That’s a really good way to try to utilize some business, because a lot of people get leads that they can’t fulfill.
So, either finding a complimentary service, or people at different stages of company size. If you’re better at working with really small businesses, it’s likely that a bigger ad agency or service provider, that’s not a good customer for them just for how they practice business. So if you can come help underneath and support customers, or leads that they’re already getting, that’s a good way to start capturing that and figure out some agreement there.