Why Paid Social Makes Cents | Straight Facqts Podcast Ep. 1

Why Paid Social Makes Cents

Welcome to our first podcast! Today, we’re going to discuss the many reasons why Paid Social makes cents or in other words, why it’s beneficial to your brand and business in this day and age.

Hey, what’s going on? My name is Gabe. I am a founder at Facqt, and this is Straight Facts where we give it to you straight on how you can be able to scale your Paid Social!

On this episode, we’re going to talk about why you should care about Paid Social and what makes it so great for advertisers. So to jump in, why Paid Social? To put it simply, it’s just the amount of eyeballs that are on the platform. I’m speaking primarily on mobile.

“People are people and they’re going to be digesting on social media predominantly than any other platform. So if you want to be able to scale, this is the land of opportunity.”

 

With Paid Social we’re referring to Facebook, Instagram, and TikTok. Occasionally we’re going to be talking about LinkedIn or Snapchat. But predominantly it’s going to be either Meta or TikTok.

The active monthly users on these platforms are 2.85 billion people for Facebook. Instagram has 1.35 billion people and now TikTok most recently reported 1 billion as well. However, TikTok is not as straight with their numbers as the others are.

That number I imagine is significantly higher, but definitively it is now higher than 1 billion monthly active users on TikTok. And TikTok is growing and maturing. It is a big kid now and it may be even past the pamper stage.

So it is a much relevant platform that you should be paying attention to. That is also whether you are E-Commerce, local or even B2B, but we will dive into which platforms you should choose in the future.

Simply put, there are more eyeballs on these platforms than any other platform out there. We’re talking TV, Paid Search, SEO which is in advertising, print. There are more people on Paid Social you’ll be able to reach than any other platform.

You may say, “Well, my audience isn’t on these platforms.” And to that I say hogwash. People are people and they’re going to be digesting on social media predominantly than any other platform. So if you want to be able to scale, this is the land of opportunity.

“If you ever go to Meta headquarters, it is literally office building after office building after office building with engineers.”

 

Because there’s so much investments in the machine learning and in using big data on these platforms, their precision of targeting has immensely improved.

So you’re going to be able to target your audience on these platforms significantly better than you have been able to in the past. By integrating your own data and by better delivering that data to Facebook, they can be able to understand who your ideal audience is.

You’re going to be able to reach virtually any niche audience on these particular platforms. And what’s so great is that if you ever go to Meta headquarters, it is literally office building after office building after office building with engineers.

What a lot of those engineers are doing is getting the targeting even more precise to make sure that you can get the right person in the right place at the right time to deliver your ad to.

“It’s going to be an avalanche effect and everything is going to have a positive ripple effect because of Paid Social.”

 

What’s also great about these platforms is they are top of funnel. So typically it’s going to be the audience’s first time actually ever experiencing your brand if you’re doing Paid Social. But also with top of funnel you get a couple more bonuses as well.

You are going to get a lower CPM (Cost Per Impressions) than virtually any other platform out there. Right? What’s great about having a low CPM is while you may not get them to be a lead or to purchase your product right away, you are projecting your brand to more people that you’re going to see positive effects everywhere throughout your funnel.

So even if they don’t purchase your product or service right away, you’re going to see a lift with Organic Search and Paid Search. You’re going to see a lift with your Email Marketing. You’re going to see a lift with your funnel and because it’s top of funnel, it’s going to be an avalanche effect and everything is going to have a positive ripple effect because of Paid Social.

Furthermore, because it is top of funnel, if you are doing Paid Social right (and by the way it is also very easy to do it wrong), you’re going to get lower Cost Per Acquisition typically on Paid Social than any other platform out there.

You’re going to get a three to five times lower Cost Per Acquisition on Paid Social than for instance you would on Paid Search.”

 

Now, throw in a grain of salt, and if you are a bad advertiser, throw in a rock of salt because Paid Social is a free market environment. So you may be hearing people who are having absolute wins on Paid Social and then scaling and doing fantastic. Well, that’s one side of the spectrum.

The other side of the spectrum is there are people who are burning cash and doing absolutely terrible and should get out of the game right now. So the purpose of this podcast is to help you be able to better position.

When we say lower CPAs, that is the potential for lower CPAs. If you are doing it wrong and you don’t know what you’re doing and you are getting higher CPAs on Paid Social than you are on Paid Search, get out of there.

Bring in an expert who knows what they’re doing. I am not a sith lord so I don’t want to speak in absolutes but 99% of the time — we’ll go 98 just to be safe, I haven’t seen any experience where Paid Search is lower.

Paid Social is going to give you a lower Cost Per Acquisition, and typically relative, you’re going to get a three to five times lower Cost Per Acquisition on Paid Social than for instance you would on Paid Search. So one thing to note, (well, there are many things to note) Paid Social is going to give you a lower Cost Per Acquisition, Cost Per Lead, Cost Per Purchase, etc.

“If done right though, you’re going to get a lower CAC (Cost Per Acquiring A Customer) with Paid Social.”

 

However, an element of Paid Social is you are going to get lower conversion rates than you are on Paid Search. So that is one thing to note. While say for example — and this is going to be relatively high and the cost per lead is always relative — you get a Cost Per Lead on Paid Social for like $50. And let’s say that equivalent on Paid Search is going be a Cost Per Lead of $200.

Now the reason why Paid Search works is you get better down funnel conversion rates. Let’s say that you are able to get a conversion rate from lead to opportunity for Paid Search. That is going to be about a 50% conversion rate. If that is the case, you’re probably going to get a 25% conversion rate on a cost per lead from Facebook. So do simple math, that means it is going to be a cost per opportunity. $200 for a cost per opportunity on Paid Social, where it is going to be a $400 cost per opportunity on Paid Search.

Therefore, one thing you want to make sure of is while you are going to get a lower Cost Per Lead typically on Paid Social versus Paid Search, your conversion rates aren’t going to be as strong. If done right though, you’re going to get a lower CAC (Cost Per Acquiring A Customer) with Paid Social.

“Paid Social is cost per lead. However, you get lower conversion rates. That’s why you need to build in those automations. “

 

This is a little bit deeper than why you should do Paid Social just for you to be optimized, and we’re going to get deeper on this on future podcasts as well. But with Paid Social, you’re going to get lower Cost Per Lead. However you do need to invest in your automation and onboarding.

The reason why is on Paid Social, you’re interjecting your ads to people depending where they are within your funnel or where they are in their own particular funnel. As a result, you’re going to get a spectrum of people. One is, you’re going to get people who have cash and who are ready to purchase. “Now let’s go. I am ready.” That’s not going to be everybody though.

You’re also going to get people on the opposite side of the spectrum who may or may not have cash and who may be ready to purchase in six months. Hence, you need to be able to build that communication. So when they are ready to purchase, your brand comes first and they are ready to jump all over you and become a customer.

Bottomline, Paid Social is cost per lead. However, you get lower conversion rates. That’s why you need to build in those automations. Yeah. And that’s typically it without getting too deep into it.

By the way, for future podcasts, we are going to get much deeper into Paid Social optimizing for Paid Social — how you can be able to get those optimal Cost Per Leads. Also, the automations that you can be able to do to convert as many of those leads to customers so you can get your best ROAS, CAC, whatever acronym you want to use. And that is Paid Social.

Ad Review: Car Companies

 

Also a big part of Paid Social, and this is something that we do for every episode, is the creative. Now we’re going to be rating three different creatives. We’re going to rank them in terms of one, two, and three, and in terms of what we think gives the best performance.

Hopefully this helps you as well to be able to build your own creative to be optimal — so you can be able to get those best results possible.

Today we’re going to be ranking ads from three different car companies! By the way, when grading these, this is going to be purely underneath an acquisition lens. It is not going to be under branding, and much kudos to all the people who did create this, because it is much easier to critique than to create. Keep that in mind. But now we’re going to start with our first video ad.

Hyundai Ad

Cool. So that’s Hyundai. Let’s get in the second one.

Cadillac Ad

By the way, we’re also looking at these underneath an acquisition lens. And one thing that this video does wrong for Paid Social is there are no captions.

People typically watch creatives with the sound off. So I just see a car driving. Cool. I mean good for branding in a sense that I’m able to see it. The “Be Iconic” is at the end. But if I’m watching this video it tells me nothing about what’s going on and nothing about the benefits. So not a big fan of Cadillac. Now let’s get into our last one which is from BMW.

BMW Ad

Notice how they use captions right there? So if your visuals are not understandable for a sound off world, captions will better help the audience make that connection about what that benefit is. So good stuff there for Paid Social. This is made for, I believe the Super Bowl. That’s good — that adaptation that they have for social media.

From an enjoyment standpoint, I very much like this commercial. The one thing that I would say that plays against it is the intro doesn’t tell you what the benefit is right away. It takes a little bit more time.

And the one thing that’s a little bit different on Paid Social, it’s not like electronic music where you build the beat, build the beat, build the beat, build the beat, and drop it at the end for the benefit. Boom, and everybody gets excited. That format doesn’t work.

And that’s with the format that this is building off of. At the end you realize why is he talking about electricity? Why is Arnold Schwarzenegger complaining about not having a charge? That’s climactic at the end. So that’s the one thing that is playing against it.

Final Rankings

 

This is the first time I’m actually watching these videos. So you’re getting an authentic reaction. In fact, all three of these videos are not necessarily made for Paid Social.

But if I had to rank them, we are going to put BMW first. It does use captions. It does use a powerful brand connection with. . . is that Zeus? I think that’s Zeus in an electric vehicle. So we get a closer tie. I wish they led a little bit better with that benefit. But BMW is our leader here followed by Hyundai.

They could have done a better job of leading with the benefit as well, Hyundai. But they also do have a powerful brand which is Jason Bateman. I’ve ran ads with powerful brands in the beginning for acquisition purposes. So Kevin Costner’s in one of the ads that I run and he kicks butt every single time.

So if you have Jason Bateman, that is definitely going to give you a power lift in terms of people engaging with the video. And it does have good analogies about the electric car and the progression, which helps the audience understand.

In summary, number one is BMW with Arnold Schwarzenegger. Number two is Hyundai with Jason Bateman, and number three is Cadillac. It’s just a car driving. It doesn’t tell me much. That’s a benefit about the car, it just goes. This is nice but it’s not going to make me purchase it right away.

That’s how we would rank the three videos. Hopefully you learned something or hopefully we helped push some ideas forward. If you guys have any questions, feel free to reach out. I look forward to seeing you in the next episode!

That’s why Paid Social makes cents!

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