Every 3 months marketers notice a spike in Facebook Advertising Costs.
And this spike in advertising costs is seen across all industries.
So what’s causing it?
Enjoy the video as Rito explains how to remedy the End of Quarter (EOQ) Effect:
There are hundreds of thousands of companies, large and small, targeting countless interests in an attempt to maximize clicks and sales for their respective products and services.
Note: Drop shippers account for a very small percentage of the total number of active advertisers on Facebook.
Facebook is an auction based advertising marketplace, where bidding occurs for every interest and / or every impression.
Because of this, you’ll either need to outbid your competitors or have some awesome numbers on your existing ads.
For instance, your:
- Relevance Score
- Click Through Rate
- And Overall Engagement All Need To Be Solid
This way your costs will remain lower.
But even if your ads are doing well and you’re totally on top of things, the end of quarter effect, will still hit you.
The final three weeks of every business quarter tend to be the most expensive ad spends by companies of all sizes, in all industries.
This spike occurs because many companies and marketing teams need to deplete their marketing budget for the quarter to receive the same amount if not more for the next quarter.
They in turn, flood the market with higher bids, and countless ad sets, targeting just about every interest you can think of.
So What Can You Do To Remedy Higher Ad Costs?
Rather than approach our Facebook advertising in the same manner we normally would, which is based on our First Sale Chart, we’re going to modify our mindset during these expensive 3 weeks of each quarter.
Normally, we’d utilize the greater than 3 return on ad spend approach, which dictates that if our revenue is above 3x our spend, we increase the budget slightly. If it’s below 3 ROAS, we decrease the budget slightly.
Because the final three weeks of any business quarter typically won’t allow us to see that high of returns, we need to lower our expectations a bit.
Instead of lowering the budget or pausing ad sets that aren’t seeing more than 3x times the cost of the daily ad spend, we let any ads earning an ROAS of 2.2 or greater continue to run.
What If I Already Have A Winning Ad Set?
If you already have a winning product and accompanying ad set, you must anticipate higher cost per clicks during the final 3 weeks of the quarter and reduce your daily budgets.
There’s no rule suggesting a specific amount to lower that will fit for every campaign as your campaigns are unique to you and your brand.
But you’ll be able to recognize the percentage increase of cost per clicks, and perhaps consider lowering your daily budget by the same percentage.
This will help prevent the wasting of your hard earned cash during these expensive times.
That’ll do it for Episode 19 – Great work!
Questions, comments or just want to say hi?
We love hearing from you in the comments below!
Success by choice, not by chance,
If you’re not kept in the loop via our #Bizathon definitely sign up today.