When I started in 2006, the cost per click of many keywords was only $0.10 in Google Ads (aka AdWords) and Yahoo (aka Overture). Fast forward to today and it’s nearly impossible to find keywords that cost less than $1 or $2 per click. In some more competitive industries, keywords can cost up to $10, $20, even $50 per click!
As the cost per click of keywords rises, so does the cost per lead (if your website conversion rate stays the same). It’s just basic math. When your cost per click is $0.10 and your website conversion rate is 5%, then your cost per lead is $2. When your cost per click is $1 and your website conversion rate is the same 5%, then your cost per lead is $20. That makes a huge difference in your ROI!
For some businesses, the rising cost of keywords has eliminated Google Ads search ads as a viable option for lead generation.
Luckily, there are other options. For example, Facebook Ads typically have a significantly lower cost per click compared to search ads. We’ve been testing Facebook Ads for our clients and they can work great for many different types of businesses like e-commerce, B2C, and even B2B. For our clients focused on lead generation, we have seen the best results with a specific type of Facebook Ad called Lead Ads. For some clients, the results remind me of the “old days” when you could consistently generate leads for less than $2!
What Are Facebook Lead Ads?
Before we dive into the case studies, I want to clarify how Lead Ads work. For most ads, when people click your ad they are sent to your website landing page. Then your landing page sells your product or service and encourages prospects to take action like requesting a quote, scheduling an appointment, signing up for a demo, etc.
Landing pages work, don’t get me wrong. However, they do have a substantial Achilles heel — most prospects do not know, like, or trust your business or website. Often it’s your prospect’s first introduction to your business, so it’s a tall order to expect them to take action. This is one of the key factors that hurt your website conversion rates.
But with Facebook Lead Ads, you do not send prospects to your website. Instead, your prospect stays on Facebook, which is a website they already know, like, and trust!
Let me walk through the steps so you see this in action:
- First, your prospect would see your ad and click on it. This is the same as a regular ad.
- Second, your prospect will stay on Facebook and see more information about your offer. This is the critical difference between regular ads and Lead Ads because prospects stay on the website they’re already familiar with.
- Third, your prospect can complete a form on Facebook and their information will be sent to your business.
As you can imagine, the conversion rates using Lead Ads can be higher than the conversion rates on your website landing pages. This isn’t due to any fancy design or marketing tricks. This is just playing into the laws of psychology — people are more likely to take action when the process is easy (Lead Ads are scaled-down and simple pages) and when they trust the website (Lead Ads keep the user on Facebook, which is a website the user trusts).
Now that you know what Lead Ads are, it’s time to dive into the case studies…
Case Study 1: Real Estate Investment Opportunities
The first case study is for a company that wanted to drive leads for overseas real estate investment opportunities. Before working with us, this company had tested Facebook Ads but had not seen any success. In fact, they weren’t convinced Facebook Ads were a viable option for their business.
Here’s what we did for this client:
- We built 3 different campaigns: 1. Remarketing to previous site visitors, 2. Demographic & Interest targeting, 3. Demographic & Behavior targeting
- Within the campaigns, we used 3 ad formats: Video, Image, Carousel
- We tested Lead Ads versus Standard Ads that drove prospects to a landing page and we tested many different landing page variations
In the first two months, we only generated 2 leads and the cost per lead was around $70. This was not a great start, but we saw signs of life and we knew there was a lot of room to improve across the targeting, ads, and landing pages.
We continued to optimize the campaigns and eventually determined the Lead Ads outperformed the Standard ads, so we allocated all of the budget to the Lead Ads campaigns. After a year of optimizing, we had a record month with 145 leads and the cost per lead had dropped down to $6!
You’re probably thinking, what about the less than $2 cost per lead that was mentioned in the headline? Well, that brings us to case study number 2…
Case Study 2: Women’s Apparel E-Commerce
The second case study is for a women’s apparel e-commerce business. In addition to promoting and selling products, our client wanted to drive more email newsletter signups. The goal was to acquire emails and then use email marketing to sell their products.
Here’s what we did for this client:
- We built a campaign targeting a Lookalike Audience from previous purchasers.
- Within the campaign, we used 3 ad formats: Video, Image, Carousel
- We tested Lead Ads only because we had data from our other client that showed these would likely perform the best
For this client, we saw success right away. In the first month, we generated 83 leads with a cost per lead of just $1.88. The following month we generated 184 leads with a cost per lead of only $1.27!
Are Lead Ads Right For Your Business?
If your goal is to generate leads, then I strongly recommend you test Facebook Lead Ads. As highlighted in the first case study above, success will likely not be instantaneous and you may have to work hard for several months to a year to get your campaigns dialed in. But once you do, then you can reap the rewards of lower cost leads for months and years to come!