Facebook Ads Experiment: How much does a lead cost?

The goal of the experiment was to figure out how much it costs to acquire a lead from Facebook using paid advertising. You can use the results as a ballpark, but note that there are many factors at play here that affect the result and your results are most probably going to be different.

  • Goal: get leads (email address)
  • Budget: $150
  • Method: Facebook ads
  • Time period: 7 days

The background

For the sake of this experiment I decided to target people in the “passive income” niche and made this campaign around that subject.

I had previously set up a Facebook Page but it was very new at the time of the experiment (only 24 likes/fans).

This is the flow that the visitor goes through

  1. Browses on Facebook, sees an advert in his Fb News Feed and clicks on the ad
  2. Lands on the landing page that features the same offer that the ad promised
  3. Submits email via opt-in form to get the offer
  4. Gets added to the email list and receives the promised PDF report in their email inbox

flow

Behind the scenes, the opt-in form is connected to the autoresponder service, and as a result of submitting his email address, the person will be added to an email list. I have set up the first email to be delivered immediately and it includes the PDF document that was promised in my offer.

What was created for this campaign:

  • 1 x Lead Magnet (PDF report)
  • 1 x Landing Page
  • 1 x Confirmation Page
  • 6 x Facebook ad image

The Lead Magnet

pdf-reportI created a simple PDF report that listed 8 of my favorite tools that I use for generating passive income.

Good lead magnets are short and specific. Cheat sheets, checklists, templates and tools lists work very well and are easy to put together.

Don’t make your lead magnet too long or too detailed. Most people are not interested in reading your 80 page ebook and are rather in search of a simple solution to their problem. They’re after instant gratification – a quick result. So give it to them.

The PDF report I created was just two pages and it took me about an hour to create. Keep it short and to the point. Don’t go too broad with your topic either. Focus on solving one very specific problem.

Facebook ads

I created 3 ad images at first. All with the same message, just different visual.

Here’s how one of the ad images looked like:

Lead gen Facebook ad

To create the ad images I used Canva.com (free tool).

Once the ads had been running for a day, I created 3 more ads, similar to the best-performing from day one.

Facebook Ad targeting conditions:

target-facebook-ad

Ad reach:

facebook-ad-reach

 

Ad placement:

Best ad placement to use for lead gen is Desktop News feed.

You should stay away from Mobile News Feed. Mobile ads are cheaper but they don’t convert well for lead gen. And who wants to download and read your PDF on the phone?

“Desktop Right Sidebar” is another ad placement you might want to test later.  For starters, I suggest you focus on the Desktop News Feed.

The Landing Page

This is probably the simplest landing page you’ve ever seen. I picked what is already a simple template and made it even simpler. I removed every element from it that wasn’t directly contributing to the goal. I even removed the background image.

landing2

Two-step opt-in

I used  the so called two-step opt-in method on this landing page. There is no email field visible at first, only a CTA button and the opt-in form appears inside a lightbox after the button is clicked.

There are couple of psychological games at play here.

1) Less friction. A simple button just looks less hassle and it’s easier to click a button than to fill a form + click a button.

2) Law of momentum. People want to finish what they have started. If they already invested time and effort on something, there’s a higher chance that they’ll follow through.

Result: more than 35% of the people signed up while variation B of the landing page was converting 42% higher.

Confirmation page

Many people tend to skip this step totally or fail to set it up correctly.

This is a dedicated “Thank You” page that sits on its own separate URL. When people visit this page it means that a conversion took place and you have acquired a lead.

Add your conversion pixels and tracking codes to that page and make sure this URL is being tracked as a Goal in your analytics tool.

Note: this is also the perfect place to ask for another action from the visitor. You can ask them to like your Facebook page of follow you on twitter. Confirmation page is also a good place for an upsell. If you have a product of your own (or a good affiliate product) that would benefit the subscriber then this is a good time and place to recommend it.

Results

Take a look at the image below and the tables to see and compare the results.

I ran a total of 6 news feed ads + one “post boost”. The boost cost $19, ads got the remaining $131 of the budget.

facebook lead gen ad results

News Feed ad results

Reach:7,649 people
Clicks to website:156
Cost per click:$0.84
Conversions (leads):73
Total cost:$131.00
Cost per lead:$1.79

 

Post boost results

Reach:1,911 people
Post Engagements:44
Cost per Engagement:$0.43
Conversions (leads):5
Total cost:$19.00
Cost per lead:$3.80

How long does it take to set everything up?

I didn’t track time exactly but I set all of this up in one night. I started on Friday around 7 pm and I was finished early in the morning.

This included creating the PDF report, building the landing and confirmation pages, designing ad images, setting up ad campaigns on Facebook, signing up for email service, installing tracking pixels and setting up an AB test.

Note: this can all be done using free tools. The only paid tool I used for this was OptimizePress to set up the landing page but you can build yours for free if you know how (or dare to Google).

Tools used:

  1. Google Docs (free) to create a lead magnet and save it as a PDF
  2. WordPress (free) + OptimizePress (paid) to create the landing page and confirmation page
  3. Canva.com (free) to create Facebook ad images
  4. Optimizely (free) for AB testing
  5. GetResponse (free 30 days) for delivering PDF report and later email sequence

 

Does it take an expert to do this?

As far as Facebook advertising goes I’ve experimented with it before but never for lead generation. I didn’t know exactly what to do so I looked for a course or some sort of expertise.

After some research I decided to go with a video course by Jeff David Larson and just followed it step-by-step. Actually, not 100% step-by-step… I decided to use different tools for landing page creation and AB testing because I already got experience with these tools.

He recommends using LeadPages, which is a paid tool and has both landing page creation + ab testing built in. I prefer OptimizePress because it doesn’t have a monthly fee and I can use Optimizely for free on top of that for AB testing.

About Jeff’s course

Note: This course is no longer available.

  • Price: $7.00
  • It’s not a full course on “everything Facebook advertising” but specifically geared towards lead generation with Facebook ads.
  • Course consists of 6 modules, explained in quality videos (whiteboard + “over-the-shoulder” screencast).
  • Took me about an hour to go through the course at first and some more to reference later.
  • If you’d like to learn more about Jeff’s course, you can visit his site: jeffdavidlarson.com.

Summary

This small experiment I ran proved (to me) that Facebook paid advertising can be effectively used for lead gen.

Here are the top reasons you should consider using Facebook ads for lead gen:

  1. Reliable. As long as you have the budget, the leads will keep coming. It is far more predictable than “free” methods.
  2. Runs nearly on autopilot. Once you have the funnel set up, all you need to do is poor money in to the “machine” and leads will keep coming.
  3. Quality leads. Facebook has very precise targeting capabilities so you can run your ads to a very specific audience and exclude the “tire kickers” from seeing your ads.

Please note that I probably would have had better results had I run the experiment longer. At the time I stopped the experiment, variation B of the landing page was bringing in 42% more leads than the Original (not statistically significant results). Always keep optimizing! Test your landing page, your lead magnet, your ad message and your ad images.

P.S. Don’t take the numbers presented in this experiment as an absolute benchmark because your audience might and will behave in a different way. Do keep experimenting though and keep in mind that as long as your cost per lead is less than what you make per lead (in their lifetime), you are making profit!

What did you think of this experiment? Let me know in the comments.

 

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Bodhi Clifford

I believe that anyone can start a successful online business, if they want to. I dedicate this blog to the people who share that dream and are willing to invest their time now to enjoy the freedom in a not-so-distant future. Let's locate your skills and passions. Let's find your niche. Let's create immense value. Let's accept the money. Let's live the life we want!

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