As authors, we are familiar with Facebook, but how many of us know how to make the most of Facebook advertising by using their Budgets And Bidding strategies to increase our book sales or improve our book launches or get more eyeballs on your content or do so many other things that this platform has to offer?
We're so used to going through our Facebook newsfeeds and seeing ads that we have programmed our brains to ignore them instinctively. Despite this, as an author, I see Facebook as a great weapon to revive book sales, make consistent income, and improve my author rank.
Now, how can you effectively utilize Facebook advertisements for your author brand and achieve a great return on your investment?
The main issue with getting a great ROI on your ad dollars spent on Facebook is that many authors don't realize that Facebook ad costs can vary wildly based on a ton of factors: everything from the people you target to the time your ad releases. In other words, estimating the cost of Facebook ads isn't always easy or straightforward.
That's where this article will come in handy. After reading this article, you'll have an understanding of:
Facebook bid strategies
With a better understanding of Facebook budgeting and costs, you can begin to plan where to put your ad dollars to turn your targeted Facebook audience into dedicated readers, fans, and superfans.
Setting up your budget on Facebook
The first step in estimating your Facebook advertising budget is by understanding your books sell-through and read-through figures.
Why this is important because setting up ads with just one book in your catalog is unlikely to make you any profit; in fact, it will, in all likelihood will lose you money.
When you have a series of books (5 books or more), then the sell-through from book 1 (which is being advertised) to book 2 and further will make you your profit. If your book is in Amazon KDP select program, you also have to figure out the read-through – how many people read your book 1 (which is being advertised) and then read your following books. Your page reads will tell you that.
For the most part, for authors, Facebook ads' primary objective is to generate sales. This means your focus should be either on generating email leads and promoting your book's Amazon (or Apple books, or Google Play or Kobo) sales page.
In my experience with a long series, typically five books or long with book 1 selling at 99c and other selling at 3.99 or 4.99 each, the average profit margin is in the range of 20-50% month on month.
That means if you spend $1 on Facebook ads, you can earn $1.20-$1.50 by the month-end.
You can similarly set up your overall ad budget based on the number of books or products in your catalog.
How to determine which Facebook Budget technique is good for you?
Determining your budget type depends on your answer to two questions:
Do you want to budget at the campaign or ad set level?
Do you want your budget spent over the lifetime of a campaign or based on a daily average?
The best choices for you will come down to your goals, your expertise, and how comfortable you are with giving up control over budgeting to Facebook itself.
Now let's delve deeper into what kind of budgets Facebook offers;
Campaign budget optimization vs. ad set budget
Campaign Budget Optimization (CBO) enables you to establish a campaign-level budget (instead of the ad set level). From there, Facebook will optimize and assign the funding to the best-performing ad sets inside the campaign automatically.
When you initially open Ads Manager, you'll see the Campaign Budget Optimization option. It is enabled at the campaign level and is accessible for all goals, including traffic generation, lead generation, and conversions. Additionally, you'll choose a daily or lifetime budget and a bid strategy. Typically, we choose a budget for the long term with the lowest cost per activity.
NOTE - If you have three ad sets in a campaign. Two with audiences of 100,000 and one with 3 million, Facebook will prefer to spend the bulk of your campaign money on the ad set with the largest audience size, regardless of the number of conversions or return on investment for the smaller ones.
Daily budget Vs. lifetime budget
Daily budgets are the most straightforward to create, but they contain certain complexities that you should be aware of.
With daily budgets, Facebook will spend just the amount you choose for each ad set every day. It seems to be relatively straightforward, and it is.
This practice of spending your entire budget every day enables a far more manageable spending pace. Each day, you can depend on spending the same amount, making budgeting and financial planning much more straightforward.
Additionally, if your ad set is doing well and you're getting the results you want at the price you want, it's a positive sign because Facebook is working hard to maximize your volume within your budget.
Lifetime budgets are a little different and come with their own set of advantages and disadvantages.
When creating lifetime budgets, you tell Facebook how much money you want to spend on the campaign as a whole and then choose the end date for the ad set.
With lifetime funds, Facebook is a little more performance-driven than it is with daily expenditures. The Facebook ad engine will alter daily expenditure amounts depending on the campaign's success when using lifetime budgets.
If, on a particular day, your ad has a probability of performing better, Facebook will spend a greater portion of the lifetime budget on that day to capitalize on the momentum. It will further reduce spending on days when results are not as good to save for a subsequent successful day. At the conclusion of the run, the total expenditure will equal the initial budget you specified.
Facebook bidding strategies
This section is intended to highlight the bid strategies available to you on Facebook ads. After reading this, you'll be able to consider the benefits and trade-offs for each bid strategy and better understand how bid strategies affect your overall campaign performance.
Authors advertising on Facebook may utilize different bid strategies to help them manage how their money is being spent on Facebook.
Facebook uses an ad auction to pick the most relevant advertisement to display to a user at any given moment. The auction is won by the ad with the most significant overall value, which is a combination of bid, projected action rates, and ad quality. More on ad auction here.
The following are the major Facebook bidding strategies for authors:
Lowest Cost is the default bid method, and it requires no effort on your part. Facebook will display your advertisement to those who are most likely to take the desired action.
Facebook will attempt to maximize your budget's effectiveness and will aim to get you the highest number of ads for the lowest cost possible. This is the best choice for authors as our campaign goals are more aligned with quantity over quality (e.g., for impressions or likes).
Facebook will allocate a portion of your money to acquiring high-value conversions. This budget category is only available to users who have enabled value optimization for this ad package.
Facebook will put a ceiling on how much you want it to spend in a day. It can then choose how to bid throughout the day based on that maximum cost cap. This strategy is perfect for people who want to ensure that they are not spending their ad budget too quickly.
For example, assume you're optimizing your website page for conversions. If you set a cost control of $10.00 while using Cost Cap, Facebook will attempt to keep a cost per conversion at $10. Certain conversions will cost more, while others will cost less, thus keeping the average at $10.
Minimum ROAS (return on ad spend) is one of Facebook's bid strategy options, meaning it tells us how to bid in the ad auction. ROAS is simply the total revenue generated from your Facebook ads (your return) divided by your entire ad spend.
You can track your ROAS down to the penny by measuring how much you put in (ad spend) and how much you get out (new revenue).
So, if your Facebook ad campaign generated $400 in revenue while costing you $100, your ROAS would be ($400/$100) = 4.
When you use minimum ROAS, Facebook will target a minimum return on ad spend for each bid. To use this bid strategy, you'll need to optimize your ad set for purchase value.
This bidding strategy is best if you:
Want to meet or exceed a specific return on ad spend.
Need more control over the purchase value you generate from ads than what is possible with the highest value bid strategy.
Bid cap is another one of Facebook's bid strategy options, where it tells Facebook how to bid in the ad auction.
When you use bid cap, you'll set a maximum bid across auctions (rather than allow Facebook to bid dynamically based on your cost or value goals).
Bid cap is meant for authors who know how much they can spend on advertising while still making conversions worthwhile.
Why does your bid strategy matter?
Facebook's bid strategies help you get the measurable business outcomes you care about, such as increasing total sales, getting more customers, or expanding brand reach. Depending on the outcome you want from your campaign, it's crucial to choose a bid strategy that best matches your primary KPI or how you'll measure success. Doing so can maximize your campaign's efficiency, increase your advertising ROI and ultimately increase profitability.
So, as you can imagine, there is a ton you can learn about budgeting and bidding on Facebook.