SMEs Turning to Facebook Advertising
Jessica Hubbard / 26 March 2015
In February, Facebook announced that over two million businesses around the world – most of them small and medium enterprises (SMEs) – are now ‘actively investing in advertising with Facebook’. According to the social media giant, this number has grown from 1.5 million in July 2014. It stated that almost 70% of Facebook users globally are connected to ‘at least one small business in their home country’ and that there are 25 billion connections ‘between SMEs and people worldwide’.
Aidan Baigrie, Sub-Saharan Africa for Facebook, says that there has been healthy growth across South Africa and the rest of Sub-Saharan Africa.
“Smaller businesses typically spend anything from $5 to $50 a day to reach thousands of people with targeted and personalised ads,” he adds. “When you look at the reach of Facebook combined with the precise ways it offers to personalise your messages, it’s cost-effective and powerful.”
Facebook Targeting SMEs
Facebook has stated that it is on a drive to make advertising on the platform easier for small businesses. Baigrie points to the Ads Manager App for iOS ‘which makes it simple to manage ads wherever business owners are’, and other initiatives such as in-person educational events which ‘give a face to Facebook.’
“We aim to make it as simple as possible to advertise on Facebook, however, we know that digital advertising is new to many SMEs in Africa,” he says. “In general, we will keep listening to our customers so that we can improve our products, tools, support and education, and thereby help them further achieve their business goals.”
Tracking the Value of Facebook Ads
For businesses of all sizes, it’s critical to be able to measure the all-important ROI. This point has not been lost on Facebook, with a variety of tools in place to track and measure the value of using the platform. Tools include Conversion Lift, which help businesses measure how their Facebook ads drove people to convert in their stores or on their websites. The Audience Network helps SMEs get their apps to users and monetise them, extends the reach of their ad campaigns beyond Facebook and allows them to measure the impact of their campaigns, says Baigrie.
“One of the most effective methods is to try a Facebook-only campaign without other media for a month and track how results changed relative to investment,” he adds.
YuppiePet: Advertising For a Cause
YuppiePet, an online pet store started by Kristen Lachenicht in 2013, provided an interesting local example of Facebook advertising being used to raise funds during the recent Cape Town fires.
As the deadly Cape Town fires spread, Kristen wanted to find a way to help the many animals affected. She reached out to Four Paws (www.four-paws.org.za), who were coordinating rescue efforts on the ground. With Kristen, they agreed to commit 10% of all gross food sales to their fire rescue fund.
Kristen leveraged Facebook to advertise and create awareness around the campaign.
According to YuppiePet, 3,132 people viewed the ads per day (on average) during the campaign. The campaign had a budget of R60/day (R1680 for the life of the campaign).
Other highlights included:
Click Through Rate:
– 1.05% (33 people on average, over life of campaign, clicked through to the site from 3,432).
– Benchmark for this category on Facebook is .07%
– There were 1.6 sales per day from the 33 people clicking through (4.8% conversion rate)
– Benchmark conversion rate is 2.5%
Conversion Size: The average Facebook basket size is R622.00
ROI: = 48%
(In this case, all the funds went to Four Paws).
Tips for Success
Prudence Spratt of Spratt Digital Consulting says that there are two key factors for success when looking to maximise Facebook advertising.
“Firstly, one should do A/B split testing of different copy and design to see what converted best (what people clicked on more),”she explains. “Then, you need an understanding of the conversion funnel once the user was on the site… i.e., make sure each step in the buying process on the website is optimised.”
In addition to these technical elements, Spratt says business users should try and be authoritative on their particular products(s) by providing free and valuable information, and aim for a niche that relates to a product or service.