Facebook Lead Ads: Here’s How We Get 16 Cents per Lead

For the past few weeks, we ran an experiment with Facebook Lead Ads to see how effective it is.

The result was quite mesmerizing. We spent $150 and ended up collecting more than 800 new email leads.

In this post, we go through every step we have taken to achieve such impressive results.

Introduction to Facebook and Facebook Ads

Facebook is a social networking platform that lets users connect with other people worldwide and share images, videos, and information on almost any topic.

Being the biggest social networking website with over 2.7 billion monthly active users, Facebook is the perfect place for marketers to find their audience and promote their products or services.

Facebook Ads are advertisements that can appear in the Facebook news feed on desktop, mobile, and in the right column of Facebook on desktop.

According to DialogTech, 93% of social media marketers use paid Facebook ads and spend a total of $25.56 billion on the platform. Besides, 26% of Facebook users who clicked on ads went on to make purchases.

Therefore, if you don’t use Facebook Ads, you miss out on a big opportunity to drive your business more profits.

Facebook Lead Ads: What are they?

Facebook Lead Ads are a type of Facebook Ads that allows you to collect information from people who may be interested in your products or services.

Types of information may include name, email address, phone number, and more. You can also create custom questions to help you better understand your potential customers.

Compared to other lead generation methods like landing pages, you can expect a 50% reduction in Cost Per Lead. The reason is that Facebook Lead Ads allows you to streamline the user experience without forcing them to ever leaving the Facebook platform.

How we get 16 cents per lead with Facebook Lead Ads

Below, we go through every step we have taken to achieve 16 cents per lead, as well as the ideas and hypotheses behind all of our decisions.

Set up the basic campaign details

Before diving deep into our strategies and thought process, let’s look at the basic details of our Facebook lead ads campaign that we didn’t change throughout this experiment.

The lead magnet

At the moment of creating the campaign, we didn’t really have any great materials to promote except our blog content.

Because of the situation, coupling with the urge to test out Facebook Lead Ads, we decided to take one of our best blog posts as the lead magnet.

We ended up choosing 45+ Best Winning Dropshipping Product Research Tools for two main reasons.

First, our other blog posts, like How to start a successful blog or The definitive guide to creating a profitable dropshipping business, are great content. However, they are ubiquitous on the internet and not as unique as the one we have chosen.

Second, it has the potential to capture people’s attention much better than others because of strong words like “Winning” and the number “45.”

At least that’s what we thought. If we have time, we’ll definitely test out other blog posts to see how things would turn out. Therefore, be sure to check back our blog sometimes!

So, that was our lead magnet.

The ad copy

Our ad copy is pretty simple and straight to the point.

The title of the blog post pretty much speaks for itself. Therefore, we just had to put it with some emojis and a CTA (Call to action) “Check them out now.”

There are some interesting insights about the effect of emojis and the CTA you might want to know.

According to WordStream’s research, having emojis in Tweets can increase the engagement rate by 25.4% over posts that don’t have them. Furthermore, they have a 22.2% lower cost per engagement.

ZazzleMedia also points out that Facebook posts with emojis have a 57% higher like rate, a 33% higher comment rate, and a 33% higher share rate.

Regarding CTAs, HubSpot found that anchor text CTAs increase conversion rates by 121%.

With all of the statistics, we think that including emojis and a CTA in our ad copy is the right move.

The ad set

There is nothing special about our ad audience. It’s straightforward to target people who are interested in dropshipping.

We also didn’t target any specific country, age, or gender.

One of the reasons for this is that the Facebook algorithm is already really good at finding the right audience for your ads.

Another reason is that our potential reach was 62 million, and we thought it’s the right fit for our experiment.

Regarding ad placement, because our ad creatives look good in all locations since they are square in dimensions, we let Facebook allocate them automatically.

The lead form

We only collect 2 types of information, including names and email addresses.

We could have been able to increase our conversion rate a little bit more by leaving out the name field. It’s because it would allow people to fill in the form faster. However, for the sake of email personalization, we decided to include it.

Try different ad creatives

We strategically created 5 different ad creatives for Facebook Lead Ads to test many different ideas and hypotheses.

• First, we want to see if 3d animated ads are good.
• Second, how important are ad thumbnails?
• Third, how important are ad playtime and initial impressions?
• Finally, do video creatives perform better than image creatives?

With all of that in mind, here are our ad creatives.

Ad 1: The 3d animated ad

With an interesting concept, our hypothesis was that this ad would perform well and would be a close match compared to most of the other ads on our list.

Ad 2: The attractive girl video ad

We expected this would be our best performing ad since it seemed to capture our attention the most.

Ad 3: The curious girl ad

We hypothesized this third ad would be somewhat outperformed by Ad 2 but not much.

Ad 4: The confused man ad

This 4th ad captured our attention pretty well. However, not as much as Ad 2 or 3. We thought its performance would be equal to Ad 1.

Ad 5: The attractive girl image ad

Many marketers said that video ads tend to outperform image ads. With that thought in mind, we assumed that this ad would perform pretty well but could not outperform any other ads on the list.

Exit the learning phase as quickly as possible

When creating a new ad set or make a significant edit to an existing one, the Facebook ad system tries to explore the best way to deliver your ads. This period is called the learning phase.

During the learning phase, your ad’s performance is usually unstable, and CPA (Cost-Per-Action) tends to worsen.

Therefore, the sooner you can exit the learning phase, the better it is.

Whether your ad set can exit the learning phase is decided by the number of optimization events – the number of times your ads achieved the outcomes your ad set is currently optimized for. In the case of Facebook lead ads, it’s the number of new email leads generated.

An ad usually has to have around 50 optimization events in a specific amount of time to exit this phase. For example, if you chose a conversion window of 1-day click and 7-day view when creating your ad set, this metric will use that to count the number of outcomes.

In the beginning, we set our daily campaign budget to $5 and got around 20 to 30 optimization events each day. After 2-3 days, the Facebook ad marked our ad set as Learning Limited. It’s the situation when an ad set isn’t getting enough optimization events to exit the learning phase. As a result, its performance will be unstabilized, resulting in high CPA.

There are multiple ways to fix this problem. However, we chose to raise our daily ad budget to $8 as it’s the quickest and easiest method that can help Facebook deliver the ads to more people quicker.

The result was mesmerizing. After exiting the learning phase, we constantly got around 60 leads per day, resulting in an average of 16 cents per lead.

It’s important to note that we could have lowered our average cost per results to around 13 cents by turning off all poorly performing ads. However, for the sake of an experiment, we decided to keep all the ads running.

Increase the Facebook Ad Relevance

Facebook Ad Relevance is a combination of metrics that rank ads’ quality, engagement, and conversion rate.

When we ran our ads, we paid close attention to our ad relevance, especially the engagement rate rankings, and tried to optimize them. The reason is that high relevance is often correlated with high performance.

At first, all of our ads didn’t perform this well. Only after we improved the engagement rate rankings by changing the ad thumbnails to more attractive ones, the ads performed much better. Naturally, the other two metrics increased as well.

You can look at the ad relevance diagnostics chart to diagnose your ads and improve them accordingly.

However, note that ad relevance is not always the reason for high performance. Sometimes high performing ads have low ad relevance diagnostics rankings, and that’s totally fine.

Results from Facebook Lead Ads

After running the ads for a few weeks, we broke down the results and checked if our hypotheses were right.

Are 3d animated ads good?

Our results with the 3d animated ad weren’t too great. The average cost per result was $0.72. In fact, it was heavily outperformed by all other ads on our list (the closest one was Ad 4, with a $0.27 Cost Per Lead).

Although the conversion rate ranking was still above average, the quality ranking and engagement rate ranking were below average despite we had tried changing different thumbnails for the ad.

One of the reasons for the situation is that there wasn’t any good cut in the video that could make an eye-catching thumbnail. Furthermore, the setting was at night, and it might not be as appealing and engaging as a brighter one. Finally, it seemed that Facebook compressed the video, making it not as crispy as the original one (although other videos were also compressed, the 3d animated one seemed to be the most noticeable downgraded video).

For good measure, an article from AdEspresso shows that they generate a new lead at $0.91. The data also shows the relationship between the number of questions asked (email, name, phone, etc.) and Facebook lead ad performance if you’re interested.

We also found an article from OverThinkGroup that says to achieve $0.24 per lead.

Overall, we think the $0.72 result generated by the 3d animated ad was OK, not too great but not too low or too high neither.

How important are ad thumbnails?

Ad thumbnails play a significant role in ad performance.

According to AdEspresso, the thumbnail image can have a 2X difference on the CPA.

Our experiment shows a similar result. For example, with Ad 2, we tried switching 2 different thumbnails.

Below is the first thumbnail.

The average cost per lead for the first thumbnail was $0.19.

And below is the second thumbnail.

The average cost per lead for the second thumbnail was $0.14, resulting in a decrease of nearly 30% from the first one.

It seems that providing a thumbnail with a little bit of context about the ad makes it perform a little better.

We made a mistake not creating two separate ads but changing the thumbnail of the same ad. However, the result should be the same either way.

How important are ad playtime and initial impressions?

Ad playtime is the biggest factor that affects ad performance.

Looking at the results, people who watch an ad for a longer time are much more likely to click on the ad link. For example, Ad 2 had an average playtime of 4 seconds and a CTR (Click-Through-Rate) of 3.61%. On the contrary, People only watched Ad 4 for an average of 1 second, causing a 77% (to 0.83%) drop for CTR.

We also intentionally made the same video content for Ad 2 and Ad 3 except for the first few seconds to actually see the impact of initial impressions.

At the first look, it seemed that the two ads had the same Cost Per Result at $0.16. However, Ad 2 had way better CTR and CPC. If we ran the ad for a little longer, we believe that Ad 2 would definitely outperform Ad 3. To prove this, below are the results from the last few days before we turned off the ad campaign.

As you can see, Ad 2 started to outperform Ad 1 in Cost Per Result.

In conclusion, it’s crucial to create good initial impressions for Facebook ads (especially for the first 3 seconds).

Do video creatives perform better than image creatives?

According to research from DataBox, 60% of marketers said videos tend to drive more engagement than images.

However, our experiment showed a different result.

Our image ad (Ad 5) generated a new lead at $0.12, which outperformed all of our ads in terms of Cost Per Lead.

Additionally, It had a CTR of 2.21% and a CPC of $0.04, making it the second most engaging ad (behind Ad 2) compared to all others.

We think that it really comes down to first impressions. As long as your ad can quickly grab people’s attention, it will convert well no matter videos or images.

In the article from DataBox, it also mentions that “the line between image and video-based Facebook ads can get pretty blurry” and “between video vs. image ads, it definitely depends on the product/service you are promoting.”

Therefore, the only way to really know which one is better for your use is to test them yourself.

How about email delivery performance?

We sent 2 different emails to the email list generated from Facebook, and below are the results.

The first email was sent to 310 recipients with a 13.9% open rate and a 5.2% click rate.

We sent the second one to 648 recipients with an open rate of 10.8% and a click rate of 4.5%. There was a difference between the number of receivers because we sent this email one week later after we had collected more leads from Facebook.

According to CampaignMonitor, The average email open rate should be between 15-25%, and the average click-through rate should be about 2.5%.

Compared to the data from CampaignMonitor, our email open rate seems to be out of the recommended range. However, the click rate is almost double the average click-through rate across all industries.

Overall, for a list generated from Facebook Lead Ads, which anyone can fill whatever in, the lead quality is pretty decent.

Currently, we have nothing to sell to our list. However, as soon as we find or create a good fit, we will try promoting it and update the results. Hence, stay tuned with us!

Things we could have improved

There are many things we could have changed and done better to improve our results.

Use a better lead magnet

The article we promoted was fine. However, it would be much better if we used a more unique and useful lead magnet like 10 dropshipping products that guarantee to make sales in 2020 or something like that. That’s just a theory, though.

After all, it all comes down to trial and error. Don’t be afraid to test everything for a few days and see how things turn out.

Write a better ad copy

If you notice, all of our ads didn’t have above-average quality rankings. Some even were below-average.

According to Facebook’s Advertising Attributes, some factors that contribute to low-quality ads are withholding information like “your life will be better if you do this every day,” or using sensationalized language or engagement bait like “10 MIND-BLOWING facts about rich people that no one told you.”

Our ad copy didn’t fall deep into those categories. However, we might be able to improve our quality rankings if we write a longer ad copy explaining why people should get the content rather than just simply putting the blog title with some emojis and a call to action.

Confirm email addresses

A confirmation email is an email that a person receives after filling your lead form.

People who confirm interest are much more likely to open your emails in the future, which improves your delivery performance.

Another advantage of email confirmation is that it protects against fake subscribers, spammers, or bots that add no value to your email list.

Regarding our Facebook Lead Ad campaign, we didn’t set up a responder to automatically send confirmation emails to subscribers. It basically means that we didn’t do anything to filter out unengaged or fake recipients.

If we could have done that, we might be able to improve our email delivery performance significantly.

Use personalized subject lines

According to CampaignMonitor, emails with personalized subject lines are 26% more likely to be opened.

We collected subscribers’ full names but haven’t utilized them yet. Again, doing this might improve our delivery performance.

Conclusion

If there is one thing we need to say about Facebook Lead Ads, we think it’s being underutilized by many marketers.

With the ability to generate decent-quality leads at a very low price, we think you should give Facebook Lead Ads a try. The results might blow your mind away.