A couple weeks back, I presented some new data around Facebook Lead Ads at Mobile Monkey’s 2019 Facebook Ads Virtual Summit. Facebook advertisers have two main options when running lead gen campaigns: using the Conversion campaign objective to send prospects to landing pages or using the Lead Generation objective (and lead ads) to convert leads within Facebook.
Here at WordStream, we wanted to find out which method was more effective. We pulled the data, presented it, and offered some strategies to help Facebook lead gen advertisers get way more out of these campaign types.
In the weeks that followed, we received numerous emails from those among the over 16,000 registrants (and from those who heard about the event after the fact) asking for a recording of the content. That recording currently lives with Mobile Monkey (you can access all 10 of the sessions for a very reasonable $49); so for those who didn’t catch the session, we’re going to give you an in-depth (and free!) rundown of the content here today on the WordStream blog.
Let’s dive in!
Facebook lead ads are nothing new (although newly important post-iOS 14!). They’ve been around for two or three years. When we talk to Facebook advertisers, however, we typically get the sense that lead ads do not yet enjoy universal usage—that there are a lot of advertisers out there that are still not leveraging lead ads to their max potential.
What exactly is a Facebook lead ad? It looks like this:
You’re looking at three main components when you’re running this ad type.
On the back end—this is what that’s going to look like for the advertiser. At the campaign level, you’re choosing the Lead Generation objective.
At the Ad Set level, you’re connecting your Business page, choosing your targeting and placements, and setting your budget and bid strategy.
Next, at the Ad level, things start to look a little different. You have your creative, your ad text, your headline copy, and your eight options for a CTA button; at the bottom, you’re also going to see this “Instant Form” field.
The instant form is what makes the lead ad a lead ad. This is where you, as the advertiser, specify what kinds of information you want to collect from your prospect.
You do that by either using a saved form, creating a new one from scratch, or working off an existing form and just changing certain information. Let me explain each of these customization fields:
To give you a look at what this looks like in the wild, here is a lead ad from our account where we’re promoting our Hacking Google Ads guide as a way of generating leads.
You can see it looks pretty much like a standard ad. But then it opens up to this nice lead form where we have an intro explaining what’s in the guide, and we’re able to ask all the questions we know we need to ask in order to qualify our prospects.
And then finally we have the customized thank you screen from which our newly acquired lead can easily download the guide.
That’s Facebook lead ad creation in a nutshell! And what makes this user flow so unique? The prospect never has to leave the Facebook app to give us their information. The prospect doesn’t have to go to a landing page in a new window and doesn’t have to wait for that landing page to load. This is hands down the biggest advantage of using Facebook leads ads.
It takes six to eight touches to generate a viable sales lead. And when you start to think about all the steps a prospect has to go through in your own organization before they become “viable” or “qualified,” that number might seem pretty conservative. It takes legitimate time and effort to get quality leads. Any time you can streamline that process, you’re giving yourself a huge advantage.
If you’re a lead gen advertiser on Facebook, your alternative to Lead Generation campaigns is going to be Conversion campaigns. If you’re selecting Conversions as your campaign objective, your conversion goal is to acquire a lead, and in order to acquire that lead, you’re sending prospects to a landing page to fill out a form. There is absolutely nothing wrong with using conversion campaigns if you’re a lead gen advertiser. In fact, most of the advertisers we talk to give us the sense that they still rely pretty heavily on conversion campaigns to meet their targets. It’s just a more traditional way of doing things.
In the WordStream account, for example, we’re using conversion campaigns to promote the exact same guide, Hacking Google Ads, with pretty much the exact same creative. As you can see, it’s pretty hard to tell these ads apart in your News Feed.
Even my mom, who is seriously tech savvy, couldn’t tell the difference!
The main difference we’re interested in here is the user flow. When you’re running conversion campaigns, you’re always going to be sending your prospect to a landing page. And as you can see, we ask pretty much the same questions and provide pretty much the same bullet points on our landing pages as we do in our lead ads.
So the main difference here, again, is just the process of physically redirecting the user out of Facebook.
Intuitively, this might seem like a disadvantage. Redirecting to a landing page means a longer wait time, more touches, and more information to digest before your prospect can become a lead, right? But—what are some reasons this user flow could work in our favor? Well, all the same reasons!
The real issue here is not, Are conversion campaigns more effective than lead generation campaigns? It’s that Facebook lead gen seems to exist on this spectrum where the more we focus on increasing lead volume, the more we run the risk of losing quality; vice versa, the more we focus on quality, the more we run the risk of losing volume. And it seems at first blush like conversion campaigns and lead generation campaigns exist at opposite ends of this spectrum, right? Lead ads might allow you to get more leads, but those leads might be higher in the funnel than you’re really looking for. On the flip side, landing pages might allow you to get more quality leads, but you’re going to be generating way less of them.
Quite an unhappy dilemma! Or is it? Let’s dive into some of the data we pulled around these themes.
Here at WordStream, we wanted to test this proposition that generally speaking, lead ads convert to leads at a higher clip than landing pages. We also wanted to look at the relative cost of acquiring a lead in each campaign type. So we set out to measure conversion rate and cost per action for both lead generation and conversion campaigns, and we did so by pulling the data of all WordStream clients that were using those campaign types in the past 60 days. Our data set spanned over 3,000 campaigns and about $9.5 million in spend.
Here’s a look at what we found:
Campaigns using lead ads had an average conversion rate of 12.54%, and an average cost-per-action of $17.98. Campaigns using landing pages had an average conversion rate of 10.47%, and an average cost-per-action of $13.26. So while cost per action was higher, the takeaway here is that lead generation campaigns convert to leads (from clicks) at a 2.07% higher rate than conversion campaigns. Which, due to the more streamlined user flow, is something we expected!
But this data only tells half the story, right? Because it doesn’t tell us anything about the quality of leads being generated from each campaign.
To get our data on quality, we decided to look at a lead-gen-specific business that not only has a massive data set, but also accessible CRM (Customer Relationship Management) data. That would allow us to see how well leads from each Facebook campaign type were performing on the sales side. Where could we find such a data set? Our in-house account here at WordStream!
We used the same time period (60 days). And to give you an idea of the scope of the data we looked at, we accrued over 40,000 link clicks in that time period across the lead generation and conversion campaign types. What did the data tell us?
Just like we saw in the customer data, lead generation campaigns converted to leads at a higher rate—this time, an 11.7% higher rate. However, when you take into account what our business defines as a “qualified” lead, the story begins to skew pretty heavily toward conversion campaigns.
Conversion campaigns had a 5.7% higher conversion rate to a “qualified” lead, and a 1.4% higher conversion rate to a demo. A “demo” is when a lead ultimately requests a call from our sales team to demo our software. Given the importance of that action to our business, that 1.4% increase is pretty huge!
We also noted that cost per quality lead was significantly lower in the conversion campaign group.
The takeaway? Lead generation campaigns seem to be more effective across the board at converting clicks to leads. But conversion campaigns seem to take the cake when it comes to generating quality leads at a lower cost.
Remember that dilemma we looked at earlier, where we had lead quality and lead volume locked in a mutually exclusive proposition? Taking the data into account, we’ve seen that landing pages correlate to better quality leads; maybe we’re not hemorrhaging volume quite as much as we thought. On the flip side, we’ve seen that lead ads definitely convert to leads a little bit more effectively, but maybe we’re not leaving as much to be desired in the quality department as we once thought. So maybe these two campaign types are not as far off in performance as we once thought, and the model looks something like this:
The question I think this poses is not how do we run campaigns that don’t sacrifice lead volume for lead quality? The question is this: How do we flip this model on its head and start running campaigns that get volume and quality running in the same direction?
Let’s talk about some tactics that will help you do just that! And because we think lead ads are sophisticated enough at this point that you can really be discerning with the quality of leads your bringing in while still maintaining that easy, lightning-fast user experience, we’re going to forget about conversion campaigns for a moment and focus on strategies that can help you optimize your lead ads for both volume and quality.
It stands to reason that if you want leads that ultimately convert to sales, you need to target Facebook users who are similar to your existing customers. Remarketing to your 30-day site traffic is great; creating lookalikes based on existing leads is even better. But if you can build a prospect pool that consists of people who share the same traits as the people who have already purchased your product or service, you’re giving yourself the best chance to generate new leads that will turn into new customers.
To underscore this a little more: Let’s say you have three seed audiences, 60-day traffic to a product page, past webinar registrants, and an existing customer list.
You can hope that the prospects who look like the 60-day product people will convert to sales, but you can’t expect them to, because they’re derived from an audience of people who have browsed your website, not bought your product or service. Same with the audience based on webinar registrants. You can hope that your lookalike is going to download that whitepaper, read it, then click that free trial CTA, but you can’t realistically expect them to.
Then you have the customer list. This is the beauty of lead ads. The format is so streamlined for lead collection that it gives you the luxury of being able to forget about how you can get a given prospect to become a lead, and start focusing on how you can get that same prospect to become a customer. And when you leverage lead ads in conjunction with a lookalike audience based on your existing customers, that’s exactly what you’re doing—you’re putting that streamlined user experience in front of the people who are most likely to be in the market for your product or service at the time they see your ad.
Let’s see what creating a customer lookalike looks like on the back end. First you have to create your custom audience, which is pretty simple. Just head to the Audiences tab in Ads Manager…
Click the Create Audience button, then select Custom Audience.
And select Customer File.
From there, if you’re a MailChimp user, you have the option to just import email addresses.
But for most of us, we’re going to be clicking the first option here where we’re just simply uploading a spreadsheet.
After you upload your email addresses, you’re going to wait one to six hours for Facebook to build that custom audience for you. When that’s done, head back to Create Audience >Lookalike Audience…
Find your new custom audience in the source field, layer your location targeting, and set your audience size.
It’s really that simple!
For audience size, I would recommend starting with 1%, which is the percentage of the population that most closely matches your existing customers, and then working out from there if your audience is too small.
You can use this strategy with any campaign type, but it’s so effective with lead generation campaigns specifically because, again, when you combine that streamlined lead ad experience with this kind of tight targeting, you no longer have to choose between volume and quality.
When I say animate here, I don’t mean Mickey Mouse! I mean you should make your stuff move. I can tell you firsthand that every time our in-house acquisition team meets with the people at Facebook this is the number one tip they give us. We have implemented animated creative over the past six months and seen improvements across the board—so much so that we rarely opt for static creative now when we’re creating new Facebook ads.
You have probably heard the tip implement video creative in your marketing campaigns a thousand different times in a thousand different ways, but let me tell you—it doesn’t even have to be a video. Here’s an examples of a piece of animated creative we’ve used in lead ads over the past few months:
This is a gif; we simply took some static elements and animated them (harder than I’m making it sound, but more on that in a second). But as I said, this is pretty much our modus operandi now whenever we come out with a new ad concept. We still will use static creative, but more often than not we are using some sort of short animated gif or video. We know it increases performance, so it’s worth it for us to put that extra effort into designing it. What you’re basically doing is giving your ads that thumb-stopping power everyone loves to talk about. You’re differentiating yourself from the rest of the static elements in your prospect’s News Feed.
Gifs are great, but this is not to say that video doesn’t have a place! While any animated creative is going to give your ad that thumb-stopping power, only video is going to allow you to control the story, and controlling the story is a crucial part of qualifying leads.
What do I mean by that? Let’s say you’re a car dealer and you invest in a 15-second ad spot for your Audi convertible.
It’s nothing too complex, just a short clip of the car in motion, some of the interior features, and maybe a suave-looking guy behind the wheel in sunglasses. What you’re doing by making that video is making an investment in your story; making an investment in your story means making an investment in your prospect. Investing in your prospect is so critical when you’re serving lead ads. Because it’s already going to be super easy for this prospect to become a lead, you want to make sure it’s just as easy for him to become a sale.
It’s easy enough for a prospect to see this Audi convertible in his News Feed, see the Get a Quote CTA, and say, Hey, I wonder just out of curiosity how much my monthly payment would be if I financed this thing, I’m going to submit my info. But by investing in video, you’re allowing this same prospect to see himself behind the wheel of the car. Ok, now he understands some of the interior features. Ok, now he sees how fast the thing is on the open road. This prospect understands the product, understands what he’s clicking on when he clicks that Get a Quote CTA, and is much more likely to buy.
Shameless plug time!
And I only offer this plug because I truly know how difficult it can be to create animated ad assets in-house—especially if you’re a small business owner, but even if you’re an agency or you have a bigger team. At WordStream, we have a super useful tool within our software that helps advertisers get up and running with animated creative quickly and painlessly. It’s called Smart Ads. If you’re an advertiser, all you have to do is enter your URL, and we scrape your site for images and text to make super dynamic HTML5 ads. That basically means that we take your static creative and set it in motion. It looks like this.
You can add your new dynamic ad to your Facebook and/or Display campaigns right from within the software.
And then the other feature I would mention here is Smart Video Ads, which exists within the Smart Ads suite. This is where we template the entire video creation process out for you, give you music to choose from, and all you have to do is drag and drop your images and type in your copy. The final product is a super dynamic, super engaging video ad that, again, you can implement right in your Facebook lead ad campaigns. This will go a long way in helping you control your story, qualify the leads your generating, and make it really easy for that prospect to become a sale after he becomes a lead.
The instant form within your lead ad can have up to 15 custom questions and up to 21 questions total. Now obviously, if you can get a prospect to answer 21 questions before tapping submit, you are going to know everything about this person—from their favorite color to their first girlfriend’s name to how they take their coffee. But your prospect’s not going to want to answer all those questions. And not all those questions are going to be absolutely vital to your sales process. This is where asking the right questions, and asking the right amount of questions, is absolutely critical.
Let’s look at a bit more data. AdEspresso ran a really cool study a year or so back where they looked at how the amount of questions you ask in your instant form impacts your cost-per-lead. Their conclusion, which goes with our theme, was that the more questions you have on your lead form, the higher your cost per lead will be. Conversely, by removing too many barriers between the user and conversion, you run the risk of attracting low-quality leads/conversions.
This is nothing novel, and it goes back to that inverse relationship between quality and volume we presented earlier. But the interesting thing for me here is that when you look at the numbers, cost-per-lead rises astronomically after five questions. It’s like people are totally fine with answering five questions but then if you ask them to answer one more they’re like, “Oh no, I’m going to make you pay for that.”
I think five questions is a good benchmark to go on here, but what I really think this data is telling us is this: Understand the objective of a given lead ad campaign, and how the leads you’ll get from that campaign fit into your sales funnel. Then, ask the fewest amount of questions possible to get the most vital information you can.
So for instance, if you’re running a top-of-funnel lead gen campaign, and you know you’re going to be sending those leads to your nurture team for further lead qualification, then just ask for a name, an email address, and whatever other vital information your email marketing team needs to blast those leads. If you think you have a really good offer and really good creative, on the other hand, and your goal is to send leads right to your sales team, then ask for the information you know your sales team needs to segment those leads and hit them with calls. You’re going to generate a ton of leads with these campaigns—we saw that with the conversion rates. But extra leads is not a problem if you ask the sorts of super discriminating questions that are going to make it easy for your team to push those leads through the funnel.
Facebook lead ads are heavily underutilized. Because conversion campaigns have traditionally been the way of doing things, lead ads haven’t achieved that ubiquitous status yet. And that means that, for all you advertisers reading this, you can use those conversion rates we talked about to generate more leads than your competitors. And you can combine them with some tactics we talked about today to generate the kinds of leads that are going to make you a profit.
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