Episode 8 - More Social Budget Isn't Always Better

Podcast Episode 8: The FI GROW team talks about why more social media budget isn't always better and where you can be spending extra digital ad budget.

Transcription:

Have you ever been talking about something that's really useful and thought, "That's a great idea, let's hit record so we can share this with everyone?” If you're looking for best practices for your bank or credit union, join us while we talk all things sales, marketing, and strategy for financial institutions. Let's make it happen with FI GROW Solutions.

Meredith Olmstead:

Hi, there. I'm Meredith Olmsted, the CEO and founder of FI GROW Solutions. And I am here with Ida Burr. Ida is our digital ads manager, and we were just having a great conversation and we wanted to hit record and share it with you all. So we were talking about why more money isn't always better and how to save money with social media ads. And so this is weird, it's counterintuitive. You would think that the more you spend on digital ads in the social media space, the better they would do. But Ida was just explaining to me how that's not actually all the case. So we decided to hit record and talk about this. So Ida, tell... This is like a mystery, very counterintuitive. So if we have banks or credit unions out there and they are looking to run ads in the social media space on Facebook or Instagram or other social media, why is more budget not always better?

Ida Burr:

So with our clients, a lot of the time, they have a pretty limited audience as far membership eligibility. So we look at how many people are in that zip code or in that county or in that area, and that dwindles down the audience a bit. And by a small audience, that could be a million people. We're not talking about 1,000 people in an audience or something. A million people sounds like a lot, but the way the Facebook algorithm works, depending on the objective you pick, they're only going to select the top 20% of that audience or something. They're going to pick the people who they think are going to convert on that objective. So a million people quickly goes down 200,000 or less, depending on who they pick out of it. So that being said, Facebook will spend pretty much any amount of money you throw at them. So you could spend $50 a day on a campaign. But if you're showing the same ad for the same person 10 times a week, that's not really an efficient way to spend your budget.

Meredith Olmstead:

Gotcha. So Facebook doesn't slow down the... It doesn't meter out the budget or expand the audience then. It'll actually show... The frequency of your ads can go way up and with your spending when it goes way up.

Ida Burr:

Absolutely.

Meredith Olmstead:

Okay.

Ida Burr:

And that's one thing we've noticed with clients a lot is I've added frequency into our columns in Facebook Ads Manager, and I keep a close eye on it because Facebook will just spend your money.

Meredith Olmstead:

So if you do reduce your budget on Facebook, if you say you're spending $3,000 a month on Facebook, but you decide, "You know what? It's been a little bit of a tight year. We'd like to reduce our budget to $2,000 a month on Facebook and Instagram ads," what's going to happen to those ads when you reduce your budget?

Ida Burr:

So I have a theory about this. We have in the past reduced budget for clients. And say, for example, we reduced the budget 20%. We'll notice a drop in the average cost per result, a pretty significant drop. And then we'll only see a 10% drop in overall results because the cost is cheaper. So what I think happens is the less money you have, the more efficiently Facebook spends it.

Meredith Olmstead:

Interesting. Okay.

Ida Burr:

So of those 200,000 people you have in that audience, they're now only going to pick the top 5% because that's all your budget could cover.

Meredith Olmstead:

Okay.

Ida Burr:

So it's almost like it makes the ads more efficient. So you do end up losing traffic, but it costs less at the same time and you're reaching a similar amount of people, too.

Meredith Olmstead:

Okay. Interesting. So you've actually seen that when you drop budget, that your cost per click, for example, will go down.

Ida Burr:

Yes. And some of our clients with the least amount of budget, they tend to have lower costs per click as well, which is very interesting to me.

Meredith Olmstead:

Okay.

Ida Burr:

So again, it's my theory. This isn't proven science or anything, but I feel like sometimes less budget could actually drive traffic at a lower cost.

Meredith Olmstead:

Okay. So if, say, you have a customer or a client and they are like, "But we've got more money to spend. We want to spend it in the digital space. We want to drive more traffic if we can. We want to increase our budgets," where do you think that they should be spending their money then? I mean, if it's not on Facebook and Instagram ad placements, at least the standard ones that you're talking about, where would you recommend that they spend their money on the digital space?

Ida Burr:

Yeah. So we actually break out our campaigns now. We create campaigns that are newsfeed, Facebook newsfeed placement, and then we create completely different campaigns with completely different ads for the Instagram Story placement.

Meredith Olmstead:

Interesting.

Ida Burr:

That way, you're reaching... You may be getting the same people in both of those placements, but they are in different apps altogether.

Meredith Olmstead:

Okay.

Ida Burr:

And the Instagram Story placement tends to skew younger.

Meredith Olmstead:

Okay.

Ida Burr:

So by creating ads in separate campaigns for both of those placements, you're doubling the amount of exposure you can have, and that you too can reach younger audience, people who aren't on Facebook as much anymore. They're using Instagram and Instagram Story.

Meredith Olmstead:

Gotcha. And if people feel like they've maxed out their Facebook and Instagram budget, adding more to that budget doesn't really make logical sense. Where else in the digital space would you recommend increasing ad spend?

Ida Burr:

Absolutely. So I definitely believe that pay-per-click is the best option if you're looking for conversions and for new potential customers and members. So if your social budget is maxed out, I would take anything leftover and bring it over to pay-per-click and set up some campaigns there.

Meredith Olmstead:

Gotcha.

Ida Burr:

Social media is really, really great for driving awareness, awareness of your brand, awareness of your product. But Google is really where you get those conversions from.

Meredith Olmstead:

Gotcha. Okay.

Ida Burr:

And Google is not like Facebook because if people aren't searching for your keywords, they're not going to spend your budget. So even if you increase the budget and pay-per-click, it may not get spent, and then you can create a new campaign. So say you have one campaign for auto loan, one campaign for mortgage, and you're not spending your budget, you can create another campaign around checking accounts or around CDs or whatever other product or service you want to promote.

Meredith Olmstead:

Okay. Okay. That makes sense. Awesome. Well, thank you so much. I'm so glad we pushed record on this, we hit record on this. We've got lots more on social media on our FI GROWTH Academy courses. So if you want to learn more about what FI GROW does, visit us at figrow.com. We'd love to have you join. Ida and I, we have some courses on social media and also pay-per-click. So if you want to learn more about running those kinds of ads, we have paid courses on those. And we would love to have you join us in FI GROWTH Academy. So thanks so much, Ida. I really appreciate it. And let's go make it happen.

Ida Burr:

Thank you.