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Digital Marketing Uncategorized

Understanding the Facebook Algorithm for marketers (2020)

It seems that after the whole Cambridge Analytica situation Facebook is starting to be more transparent in regards to how their algorithm works. Which is good for both the users of the platform and all of us marketers. The better we understand how the algorithm works the better we can create ads that resonate with our intended audience.

Facebook’s goal is to make ads as relevant as possible to their users. As much as some users don’t like seeing ads, they would rather see ads that are relevant to them than ones that aren’t. So let’s dig into the 3 big fundamentals that play into who sees what on Facebook.

1. Bidding

There are several different optimization options for Facebook ads, you can do landing page views, engagement, conversions, etc. The one that I’ve consistently found to provide the best ROI is conversions. (Shocking, I know…) So this bidding info is specifically for Conversion Optimized campaigns.

Bidding options: You can do auto-bid (what FB calls Lowest Cost), Target Cost, or Max Bid (what they now call Lowest Cost w/bid cap).

a. Auto Bid/Lowest Cost Bidding: really allows you to leverage Facebook’s algorithm. This bidding style will come shooting out of the gate targeting those in your audience that the algo thinks will buy for the cheapest rate. This is why you may notice when you launch campaigns that they will often times perform really well in the beginning then fall off after a couple of days. This is because the audience exhausted itself of the low hanging fruit and is now focusing on people that aren’t as likely to buy. This is why duplicating an ad after a few days will often give you good results again after the original stopped working.

Summary – Auto Bid/Lowest Cost bidding is still the best option.

b. Target Cost Bidding: in this strategy, you can tell FB that you want to have a CPA of $20. What they do is take out all of the people that they think will be significantly higher than $20 and significantly lower than $20. This causes your impressions to be SUPER low and your ads won’t go after the lowing hanging fruit because you told the algo “No I don’t want those people.” I know, it sounds silly that it would do that, but the word on the street is that it does. After testing out this method on various campaigns I’ve noticed that indeed impressions are way lower than campaigns that are using Lowest Cost bidding. Conversions are also really hit or miss with Target Cost campaigns. I wouldn’t do them again until someone says they algo changed.

Summary – don’t use Target Cost bidding.

c. Max Bid/Lowest Cost with Bid Cap: this bid strategy is somewhat useful if you’re on a budget. It tells FB “Hey go after the low hanging fruit, but I don’t want to spend more than X to get a customer” which is good. What this does though, is it limits your impressions after a certain point because someone that is using Auto Bid/Lowest Cost bidding without a bid cap is outbidding you for impressions.

Summary – Max Bid/Lowest Cost with a bid cap is great for those on a budget. Your ads won’t scale as much as those without a bid cap but this gives you a good chance at being profitable.

Bidding Summary – Your best bet to create scalable campaigns is to just let Facebook’s algorithm work and use Auto Bid/Lowest Cost (the default bid). This allows you to continue to win the bidding auctions which makes your ads keep showing up. To extend the shelf life of your ads start using FB’s dynamic creative function. This will show ads to the people Facebook thinks are most likely to buy from you more often as the creative will keep switching dynamically.

2. Estimated Action Rate

The 2nd big part of the algo is the estimated action rate. Things that play into it:

  • Recent ad activity
    • What type of people clicked, engaged, purchased in the past
  • Page activity – how healthy and active is the page? Does it benefit FB/IG users?
    • Is the page actively posting
    • Age of the page
    • Does the page get a lot of engagement with their posts
    • Does the page reply to comments quickly
    • Has the page been hacked recently? (If so, you’ll have higher CPMs for a bit)

Your past ad activity plays a big role in who your ads show up too – the more purchases and webstie events the FB pixel sees the better. Your organic page itself also plays a big role, so the more active and healthy your page is the lower your advertising costs will be. Facebook is about giving users the best experience possible so if you’re adding to that experience they will reward you.

3. User Value

Facebook has recently said that they have an Ad Quality Panel. This is a 3rd party, outside of Facebook, that looks at and reviews ads giving them a score. These people aren’t digital marketers, they are actual users of the platform giving out the grades. Think of people in there 30’s – 50’s that aren’t too tech savvy. So it is really important that when you make an ad you look at it and ask yourself if you truly think the campaign is going to resonate, will your audience actually be interested in what you’re promoting? Make ads that resonate and you will get a higher grade which means more impressions at a cheaper rate, giving you better performance.

Another thing the algorithm looks at now is the post-click experience. The biggest factor I was told was the bounce rate, if someone clicks your ad, gets to your landing page and instantly leaves your website Facebook is going start docking you impressions (and most likely raise your CPM) because it thinks by users doing this the page you are sending them too isn’t relevant. This means, now more than ever, it’s time to have a good site experience that makes people want to stay, click around, and eventually make a purchase. As marketers, we often care so much about the creative, copy, and targeting we use in ads that we push our site experience off to the side. Our ads could be perfect (creative, targeting, copy) but if we’re sending them to a shit landing page we’re gonna be wasting money. This was true in the past but now we know Facebook is taking notice, so if your landing pages suck, fix them.

Summary

Optimize your ads for conversions (unless you don’t get many sales, then landing page views) and use the default Auto Bid/Lowest cost bidding without a bid cap. You can use a bid cap if you’re on a budget. Never use Target Cost bidding, unless you’re a fearless bastard that likes to gamble. Constantly be creating new ads and use the dynamic creative feature. Keep your organic pages active and engaging, respond to customer comments; give people a good experience and Facebook will reward you for it with better ad performance (lower CPM’s). After every ad you make ask yourself “Will this actually resonate with my intended audience? Is this something they’ll want to see?” If not, make a new ad. Also, make sure your landing pages are good and people don’t bounce/leave right away. The longer they stay on your site and the more they engage with it the better you’ll look to Facebook. That’s what I know about the algorithm from the horses mouth. If you know anything else that I should add let me know!

Cheers,

Jacob

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Science of Persuasion

A useful video by Robert Cialdini on the Science of Persuasion:

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Digital Marketing Uncategorized

People Act on Emotion and Justify with Logic

The human brain is separated into 2 parts – left and right; Logical and emotional.

Think of all of the actions that can be caused by love or fear, happiness or sadness, typically against ones better judgement. As a marketer you can convert on this while giving a person a logical reason to take an action. (i.e. make them feel an emotion then give them a logical incentive to take action right now.) This is how you need to craft your campaigns – make people feel something in their hearts then convert that emotion into intent to buy with logic.

 

 

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Setting up your Facebook Ads Manager

Often times when I talk with someone that is new to using Facebook ads they have their accounts columns set up incorrectly. Well, maybe not incorrectly, but they’re simply using the default “Performance” columns that are standard. In this video, I talk over why you shouldn’t use those columns and what columns you should be using.

 

If you’re looking for some help feel free to reach out – let us know what business you are looking for help with.

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Cialdinism Digital Marketing Food for thought Uncategorized

Cialdinism #2 – The Rule of Reciprocation

This rule comes from Robert Cialdini’s book, Influence. The Rule of Reciprocation says that we should try to repay those who have provided us with something. This can be utilized to persuade someone into doing an act by giving them an item or gift. If someone sends us a birthday present, we should be sure to send them one back. If someone offers you tickets to the game, you should repay them somehow – buy them some beers will ya!

When someone gives you something, that is actually worth value to you (weather monetarily or emotionally), and you don’t pay them back you get this weird feeling in your gut. This feeling is caused by the Rule of Reciprocation. I first hand felt this feeling last week when I was down in Cabo. My wife and I were walking around the Marina in Cabo San Lucas, Mexico when we stopped to check out the sea lions and seagulls that were by the boat ramp. After standing there for a few seconds one of the fisherman called us over and offered to us a few fish to feed the wild sea lion that was begging at the edge of the water, of course my wife jumped at the opportunity! She was able to feed him and pet him a couple times. We even got to witness the sea lion chase off a seagull that was trying to snatch the fish from my wives hand before she could give it to the sea lion. It was great!

Right after she got done feeding the sea lion we left… and I got this weird feeling in my stomach. It felt like I owed that guy something, he was probably expecting money, but I didn’t have any cash with me. I thought for the next several days on my trip about going back to the marina to pay him, but I never pulled myself to doing so because around that same time I read about this rule. It caused me to realize what that guy had done, he had created a highly profitable niche business in the harbors of Cabo. He was also utilizing a highly effective psychological tool to get people to willingly and happily give him money. A fish for him can’t cost much at all, he is a fisherman after all. It may have cost him $.20 for the 2 little fish he gave my wife, if I had cash I would have easily have given him $10 for the wonderful experience- those are damn good margins mi amigo!

Pay every debt, as if God wrote the bill. – Ralph Waldo Emerson

So anyways, the idea is to give your customers something for free so that they can return the favor to you in a way that makes sense for your business. I didn’t know about this rule when we did it, but we used it for one of our apparel brands a few months ago by giving away free shirts to our top 50 customers over the past year and the experiment has worked stunningly. Many of the customers we sent free shirts too ordered new shirts soon after.

Takeaway: Find a way for your business to use the Rule of Reciprocation to your advantage, weather it be sending your customers something for free unexpectedly or giving someone at the harbor a fun experience that costs you pretty much nothing. It will be worth it.

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Cialdinism Digital Marketing Uncategorized

Cialdinism #1

Recently I’ve really been getting into Robert Cialdini thanks to Andrew, over at Mixergy. So I’ve decided to start doing “Cialdini-isms” because I’ve really come to enjoy his insights. You can learn more about Mr. Cialdini here if you’re interested.

Cialdinism #1 – Fixed-Action Patterns

So a fixed-action pattern is an automatic response to a certain stimuli causing an instinctual/automatic action/response. He gives the example of a mother turkey based on ethology, the study of animals in their natural settings. Mother turkeys are good mother’s, they take good care of their young chicks but it is when they take care of their chicks which shows their fixed-action pattern. The mother does notice their young’s’ smell, touch, and appearance, but the biggest thing that gets the mothers to care for their young is the “cheep-cheep” noise that they make. This is the main thing these mothers focus on. If their chicks aren’t making that noise they don’t take care of them.

A group of scientists decided to conduct a study to see if the mother turkeys would take to other animals  if that same “cheep-cheep” noise was present. So ,they decided to test this with a stuffed polecat, a  natural enemy to all turkeys, naturally you would think a turkey would be pissed about a polecat near its nest… and they were. If no “cheep-cheep” noise was present it was a war zone! But when they had the “cheep-cheep” noise playing from a speaker within the stuffed polecat the mother turkey invited it to dinner, for tea and biscuits. The mother actually treated the polecat like it was one of its young if the “cheep-cheep” sound was playing! Yea… I know turkeys are known for being stupid, but still that automatic response is intriguing.

He calls it ‘click’ and ‘whirr.’ Click and the appropriate tape is activated(cheep-cheep); whirr and out rolls the automatic sequence of behavior. (taking care of the polecat)

Does it work on us? After all we’re superior beings… “that microscopic turkey brain doesn’t compare to us… not a chance.”

Well… humans do have fixed action patterns –  

One example of this is shown in a Harvard Study where someone was trying to get to the front of the line. If one simply asked “Hey, can I go before you to make copies?” 60% of the time people would let the person go ahead of them. But if you were to ask “Hey, can I go in front of you because I need to make copies?” 93% of the time people would let the person go ahead of them. That’s a 33% better chance for simply giving a regular reason. That’s like being in line at Disney Land and snaking your way to the front of the line by asking “Hey, can I go in front of you because I want to ride the ride?” So – give reasons for why you’re doing things, or give people a logical reason to do something.

The second example is our association of “expensive = good” and the fallacy that comes with it. Robert gives the example of a small boutique owner who is trying to sell some turquoise jewelry that she has had for months on end that never sold. The store owner is about to leave for a vacation and leaves a poorly worded note for one of her employees. She meant for the note to read “cut the price of the turquoise that doesn’t sell for shit in half.” The employee read the note as “double the price of the turquoise jewelry because I (the store owner) am a fearless bastard.” So the employee doubled the price of the jewelry and made a new sign reflecting the updated price. The store owner came back after her vacation and all of the turquoise jewelry was sold! But not only was it sold, it sold at double the price she originally asked for it! (Wahhhh, I know right!)

The fact that the new price for the jewelry read as “expensive” due to its new price allowed people to have the fixed-action pattern of “expensive = good” allowing them to justify buying it. It gave them a shortcut, because it’s impossible to know everything about everything, especially in our current 24/7 world where we’re constantly bombarded with stimulus. Our minds need shortcuts.

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Digital Marketing Food for thought Uncategorized

Year in Review

So every year on my birthday I like to do a little year in review, ya know… what happened in the past year type of thing to reflect on the past and prepare for the future. (doing it on New Years Day is way too cliché)

 

The past year has been pretty incredible to say the least. Some times life resembles a roller coaster of ups and downs but this past year was just up. I got married. Moved back to Wisconsin. Successfully launched a new company. Fell in love with Indian food. Looking back on it, I can’t think of anything negative that happened. (Revision: I did gain a few lbs., but who cares… I blame the Indian food.)

 

We really hit a homerun with our newest LSA company, Korked Baseball. (pun intended) Korked went from 0 – 100 real quick, as the kids would say. It started out with the entire Chicago Cubs team wearing our Try Not to Suck shirt then only grew from there. We ended up getting into 35+ stores, including every Lids in the Chicago area. (Kind of a dream for the HS me that wore hats all of the time) The best part was that we raised over $700,000 for charity over the past year, if you would have told me a year ago that we would have been able to do that I would’ve said you were full of shit. Seriously, I wouldn’t have believed you.

 

Marketing wise for Korked we learned a lot over the past year, eventually getting to the point where for every $15 we spent on digital ads we were making $100, that’s just the direct conversions not including the word-of-mouth sales. So with that we thought, well why don’t we start a new company to do marketing for other clients… and that’s what we did.

 

Last month we started a new marketing agency (still needs a name) doing marketing for a professional indoor soccer team, a marathon, semi-pro baseball teams, and more running events. So far so good. Over the next year we plan on growing it into something special.

 

With LSA over the next year we plan on adding a few more sports related brands and continue to grow Korked with an eye on exit. So far this year has been good, we have really been able to optimize our site and ads in a scalable way… I hope to be giving you another “I would’ve said you were full of shit.” stories again next year about the success of Korked and the other brands we build.

 

I’m really thankful for: my wife, for all of the support over the past year letting me work 80-90 hour weeks when needed. All of our customers. Our LSA partners Mike, Joe, John, Joe, and Joe. As well as the Cubs for winning the World Series, because if they didn’t last year could’ve been a different story.

 

Till next year,

Jacob

Picture of the year – Never forget