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6 Powerful Ways To Target Your Customers With Facebook Ads

The social networks $2.2 billion in advertising revenue in the first three months of 2014 prove that users are clicking on ads at an astonishing rate. Thanks to the targeting options available today, the click-through-rate (CTR) and return-on-investment (ROI) on the ads are being optimized to their highest potential.

Facebook advertising has a very low cost of entry, as little as a single dollar. The cost of Facebook advertising can be calculated using three main options: cost-per-click (CPC), cost-per-impression (CPM) and optimized cost per impression (oCPM). One thousand impressions on Facebook using right-hand side ads are also cheaper than any other major advertising outlet at just 25 cents.

Facebook advertising has a proven track record of delivering ROI for businesses in the way of likes, engagement, website traffic, and sales. Retail advertisers who have Ads campaign on Facebook have experienced a 152 percent return-on-investment in 2013.


Artlog, a social network that connects the art community, says that for the $75 it spends on Facebook ads, it sees $200 in ticket sales. Bob Evans the restaurant used Facebook to advertise national French fry day. The campaign resulted in 85 million impressions, more than 21,000 clicks and an ROI of between 200 and 300 percent. According to Anne Leonard-Palmer, the digital marketing manager for the chain, the campaign “more than paid for itself.”


Facebook provides a range of targeting options

The thing that makes Facebook advertising so cost-effective but ROI generating is the targeting options. Unlike traditional media outlets, on Facebook, you can target people using a variety of factors that can break down the social media site’s billion-plus users into small, easy to manage audiences. The targeting options on Facebook are diverse, each with their own abilities and powers.

Here are six ways to target your customers with Facebook ads.


1. Location

Location targeting, also known as geo-targeting, can break down groups of people by city, state, zip code and country. For businesses, this targeting option can have dramatic impacts on click-through-rate (CTR) and ROI.


First, it allows businesses to use location-specific content that will appeal to Facebook users. For example, someone who lives in Chicago is much more likely to engage with an ad that uses the word Chicago, or the zip code 60015, compared to an ad that is generalized to the entire country.


Second, it allows images to be specialized in the same manner, meaning that an ad targeted toward people living in Boston can see a picture from Boston while people in New York could see an image of New York. Using an image that correlates with a user’s geographic identity can create a sense of personalization that will help increase interest and engagement in the long run.


Third, by using the targeting option, and creating unique ads for each geographic target, businesses can create localized landing pages, which will help convert users who move from the Facebook ad to a company’s website. Just like with the ads, landing pages are most effective when they speak to the user, and geocentric landing pages are one way to create a stronger connection.


2. Demographics

Most Facebook users voluntarily input important and useful demographic data, which businesses can access and use to target ads. Some of the most popular demographic data that is used for targeting includes age, gender, education level and marital status.


For businesses, this information is what marketers have been wishing for. Before digital advertising, and specifically Facebook, started offering demographic targeting, advertisers had to make educated guesses about viewership/readership based on small surveys, logical deductions, and past experiences.


For example, advertisers would put ads on midday talk shows hoping that women would see those ads, but even if women were the biggest group watching the show, there were also many viewers who fell outside the target demographic as well. For businesses, this meant wasting money by paying for ads to be shown to viewers they didn’t want to target.


Now, advertisers can cut out the guesswork and push ads directly toward target audiences most likely to engage and convert without wasting money, time or effort on non-target audiences.


3. Interests

Facebook users are sometimes fans of hundreds of brands or have dozens of self-described hobbies and favorite activities. Targeting based on interests allows marketers to get inside the heads of Facebook users and push ads toward the people most likely to find it useful or intriguing, which has a positive effect on ROI. The goal is to only show ads to specific user groups that will not only find interesting but that they’ll want to click on the ad.


Advertisers can input as many or as few interests, hobbies, and brands into Facebook’s targeting software and weed out anyone who doesn’t conform to that criteria. For example, in an effort to increase ROI for a hardware store, that store should target based on interests such as home improvement, woodworking, construction, and DIY. By doing this, the hardware store can increase the odds that the users seeing the ad are likely to shop at hardware stores or be interesting in home improvement products.


Targeting based on interests can also mean using the name of popular brands. Facebook users can become “fans” of a brand with one click, and advertisers can use that data to target both fans of a brand they want to promote, or target fans of competing brands. Going back to our hardware store example, the marketers can push ads toward fans of Lowe’s and Home Depot, hoping to sway allegiance, gain new customers and siphon sales.


One tip for businesses is to be as specific as possible. Instead of using “home improvement” as a target interest, use more specific activities like “plumbing” or “deck construction.” Taking that thought even farther, using “cedar deck construction” would whittle the audience down even more. The more focused the behaviors, the smaller the target audience will be, which will only help increase engagement and CTR.


4. Behaviors

Behavior targeting is all about capitalizing on a user’s actions away from Facebook to help influence future decisions. For instance, if someone searches on Google for hiking boots, businesses that sell hiking boots can see that data and specifically target that user. Behaviors are constructed from both someone’s activity on Facebook and through offline activity provided by data from Facebook’s trusted third-party partners Acxiom, Datalogix and Epsilon.


The behavioral data compiled includes everything from websites visited, searches conducted, how long the user stays on each page, product purchased and what ads the user engages with. Facebook then takes that data and creates a digital profile for each user. Similar profiles can be grouped together, such as people who spend significant amounts of time on the Food Network website or looking at sports scores. Advertisers can take that data and target profile groups based on their actions with the theory being that if someone interacts with a topic in the past, that user is more likely to interact with an ad about that topic in the future.


Again, the key to effectively using behavioral targeting is to create content that’s going to appeal to that specific user group. The more personalized and quality the ad content, which includes the image, landing page and tone of the writing, the more likely a user is to click on the ad and convert into a customer.


5. Custom Audiences

Custom audiences are a way for businesses to connect their offline and online marketing efforts with Facebook advertising. In essence, custom audiences allow businesses to take lists that they’ve compiled over the years including email addresses, physical address, and phone numbers and turn that data into a Facebook user ID list. How this works is Facebook takes the list from the business and matches it with profiles. While this is not an exact science because some people may not list the information on their profiles and the businesses’ data might be outdated compared to a user’s profile, it generally returns a lot of exact connections.


Facebook has recently allowed a newer level of targeting using custom audiences. By using Facebook pixels to track website visitors, businesses can now track the people who convert from ads and see what they happen to have in common. This allows businesses to not only learn which audiences react to the ads but also learn which types of Facebook users are most likely to convert into sales, an invaluable piece of information.


This targeting option gives advertisers the ability to target consumers that are most likely to engage with the ad. It also allows businesses who want to target current customers to make return trips to a store or website, such as retailers looking to capitalize on holiday sales, the option of rewarding those consumers with unique offers. From all of these custom audiences, you can then create look-a-like audiences based on similar characteristics in your user list and then add additional Facebook native targeting to get an even more precise audience target.


6. Look-a-like audiences

Look-a-like audience building ties directly into custom audiences. While custom audiences allow businesses to build targeting lists based on existing consumer information, the look-a-like option allows businesses to build a list of users who fit the profile of a customer. In other words, Facebook takes a group of users, can figure out what they have most in common, find other users who also have those traits in common and use that as an audience to target. For businesses, this can be a very powerful tool, because it allows marketers to find a group of potential customers who are similar to current customers.


Create a powerful combination

While each of the six targeting options above is immensely powerful on their own, the real power of Facebook advertising comes from combining several, if not all, of the options together to create the most specific and specialized audience possible. When Facebook’s video ads are rolled out to the public, businesses should have access to use the same targeting options as well.


Going back to the hardware store example, a thorough Facebook advertising campaign wouldn’t just target based on location or interests or behaviors alone. It would instead target users based on all of the factors together, hopefully pushing ads only to people who live near a store, are interested in home improvement and have been researching home improvement options recently.


By combining the options and creating unique and actionable content that is geared toward specific audiences, businesses and other Facebook advertisers can greatly increase their engagement, CTR, and ROI.