UNQUALIFIED LEADS WITH FACEBOOK
High CTR But Low Conversions = Unqualified Leads
SYNOPSIS: Facebook is a productive ad platform for many offers, though too often the accolades entice some marketers to jump on the bandwagon only to discover … thousands of dollars later … that their offer didn’t enjoy the same success. Often the lack of success stems from a low conversion rate … caused by Facebook’s limited qualification options.
HIGH CLICKS – LOW CONVERSIONS: Serving a beautiful enticing ad to unqualified leads can result in a positive CTR as many folks will click from curiosity or other offbeat reasons. Example, a low-income golfer may click on ad for a luxurious golf resort overlooking the Atlantic Ocean … even though the offer is far from affordable … though what golfer can resist peeking at that beautiful dream.
UNQUALIFIED LEADS HAVE A HIGH COST: Don’t be fooled if a Facebook ad facilitator quotes a low CPM for those Facebook ads … remember there’s an additional cost for those curiosity clickers and dreamers. Unqualified leads have a high expense rate because there is the obvious wasteful ad spend … but there’s also the dollars lost in identifying / servicing the unqualified leads.
WHY UNQUALIFIED LEADS WITH FACEBOOK: First, obviously most marketers are not receiving unqualified leads … otherwise Facebook’s ad revenue wouldn’t be skyrocketing. The few marketers that are receiving many unqualified leads typically have offers that are sensitive to small deviations with certain demographics, such as age, income, net worth, home value, etc. Following are some examples:
INCOME: For all practically purposes we can conclude that Facebook does not have an income select. As shown per below image, Facebook’s income selection is so broad that the selection is futile. Facebook’s income is calculated on a zip code basis … not per household. Every zip code in America contains households of all income levels; some zip codes contain households that have an income of $500,000+ … while in the same zip code there are hundreds/thousands of households with an income below $100K. A Facebook ad campaign to records with an alleged income of $100K+ will result in countless ad going to lower income names … unqualified names.
OTHER FINANCIAL QUALIFIERS: Along with not having an effective income selection, the Facebook platform doesn’t offer any other granular financial qualifiers such as net worth, home value, estimated FICO score, net worth minus primary home, home equity, income producing assets. Bottom-line, if the success of your offer is highly correlated with a financial profile, then a Facebook campaign will likely generate many unqualified leads … a low ROAS (Return on Ad Spend).
AGE: The Facebook platform does not offer an age cap … meaning a marketer can’t execute a Facebook ad campaign just to seniors within the 65 to 70 age range. This limitation can significantly lower the ROAS (return-on-ad-spend) when considering countless ads will go to unqualified seniors. In the US there are “over” 65,000,000 people of age 65+, thus it’s highly unadvisable to use the 65+ age select IF your offer doesn’t appeal to “all” people of age 65+.
LENGTH OF RESIDENCE: After generating countless Customer Profile Reports, we can confidently state that home duration (how long a person/family has resided at a specific address) often has a significant impact on CVR (conversion rate). Not having this key filter in the Facebook Audience Profile can result in qualified leads.
NUMBER OF PERSONS IN HOUSEHOLD: Household Size is another significant qualifier that appears in our customer analytical reports. The receptivity to an offer can significantly fluctuate relative to household size; example, Family of 3 vs Family of 6 = different CVR.
BOTTOM-LINE: For a positive ROAS (return-on-ad-spend) it’s imperative that the Facebook ad manager uses the correct Facebook filters. If the qualifiers are not available – then it’s best to divert the ad dollars to another ad medium. And if a third-party is executing the ad campaign, then the company/end-user should request a summary of the exact qualifiers the ad agency is using to build the Facebook Audience.