Category: Blog


Secrets of A Successful Agency Who Achieves $1.6M Revenue

 

Have you ever wondered what goes on behind the scenes of a seven-figure agency?  The staff and team pulling the levers and the organizational structure and strategies driving growth?

 

I know when I first started out as a freelancer back in 2013, there was virtually nothing online about the topic. I had to figure everything out for my own and this meant I made some pretty epic and expensive blunders along the way.  Was I meant to hire before cash flow could sustain it or wait till I had enough clients and then hire quickly? How did the big boys land the million-dollar contracts and what sort of margins should I be working towards?

With the boom of the internet and pure online markets, it’s been a gold rush for agencies and now the opposite can be said – there is almost too much information online about how to grow this type of business that it can be overwhelming.  Not surprisingly, most of this information comes from “gurus” who have never actually built or managed agencies themselves – leading many down a costly road of misguided advice.

So for the curious who care to know what the set up of a seven-figure agency looks like,  I wanted to take a moment to share some insights that I wished I had gleamed during the formative years of my business in the hopes to help give you clarity on how to structure and grow the machine that is your business.

Some important distinctions:

  • You don’t need investors or large startup capital to make this work (although disclaimer, growing business will always require an investment of either time or money, the benefit of a service-based business is that you only really need $5K-$10K to get yourself going as long as you’re willing to reinvest profits back into your business)
  • You don’t need inside connections or a huge audience
  • Your agency is a gateway to other ventures. For example, if you start working with eCommerce clients it will probably make sense for you to invest in your own ecom shop and use your own strengths and internal resources to grow another income stream for yourself.

Here’s what I’ cover in the below:

  • The organisational structure of our agency and the team behind it…
  • Core viable final products, and how these are costed…
  • How leads and referrals are generated and tips to keeping clients on for longer…

At the core – growing to seven figures isn’t very complicated, it actually boils down to three key parts.  The beauty in this “keep it simple” system is that you don’t need to incur massive staff overheads, you won’t be required to micro-manage every aspect of your business and you will be able to position yourself in a way where you never have to get into process wars with other agencies again.

 

Overview of Eight Loop

Ok so before I dig into the juicy stuff, a quick intro of Eight Loop (my agency).  I founded the agency in 2014 and initially, I was offering all kinds of services – from social media content through blogging and email marketing and Facebook ads.  This lead to burnout and I quickly realized this wasn’t going to work so I refined our core offer towards Facebook ads.  Through the years we have changed our niche from coaches to ecom and now specialize in building out marketing systems for other agencies.

Another big mistake I made at the beginning was to fall pry to the desire of having a big team and office for the sake of having a big team and office – call i9t ego and pride.  I quickly realized this was going to make me bankrupt and – in light of the pandemic and current economic conditions – many agencies have come to appreciate that running a small and lean ship is far less stressful than having massive overheads.  This, of course, is only possible if you refine your service offer and positioning.

 

Our Team & Structure

We currently turn around $130K/mth in revenue and work with about 20 clients max at any one time. 

Surprisingly, we only have THREE core offers in the agency:  a done for you funnel and lead generation ad campaign management. We offer additional bolt on services such as promotional video creations and email nurture sequences but these only represent a small fraction of our revenues and some of this is outsourced externally.  We also work with brands (usually lead generation or awareness campaigns) but this is only 5% of our client base.

Although we are based in NZ – local clients only represent 2-3% of our client base.  Most of our clientele is overseas and the average lifetime value of a client is about $9,000. International clients and deals from even the most remote place on earth.  So the thought of – “my town or city is too small” is no longer a viable excuse.

We have five key team members behind the agency:  an account manager, a business developer (sales), funnel builder, media buyer, and copywriter.  As we grow of if sales are up we have trained account managers and copywriters we bring on to support as required on a client per client basis. This keeps our overheads low. 

 

How to Avoid Micro-Management

This is something that took me a very long time to crack! I am a perfectionist at heart and couldn’t figure out how to hand over the production of services without getting anxious over quality or needing to come in and fix everything (doubling up my workload!). It all came down to processes.

I used to hate processes and systems – “I’m a creative, the strategies I come up with are intuitive and can’t be taught” is maybe a line you’ve used yourself.

This type of thought pattern is the fastest way to burnout and bankruptcy.  You will never be able to scale your revenues if you are keeping yourself as the main person behind the production side of your service offer.  Think about it – there’s only one of you, how many clients can you realistically look after before you start to lose the plot.

The good news – processes are VERY easy to build once you refine your core offer and positioning.  And when you have solid processes in place, the scale can be achieved very rapidly without it doubling down your own workload and stress on your plate.

 

The Final Piece

Finally, the most important part of any business is arguably it’s the ability to generate new business.  Your leads and clients are the life-blood of your business and if you’re like most agencies out there you’re likely completely dependant on referrals or word of mouth and this is essentially stunting your ability to grow at the rate that you would like to.

After running lead generation campaigns for clients in the agency I began to realize that I too could automate my marketing.  Instead of having to attend conference after conference or have to cold call or harass people on LinkedIn I figured out a way to drive interested prospects straight into my calendar using paid ads to drive interest into an online funnel.

These would be highly qualified and vetted leads in the market for the services we offered. 

What I never expected was just how quickly and effective this strategy would be for growth. Within two months of automating the agency’s lead generation we had scaled from $10K revenues to $100K/mths. 

To this day, this continues to be our main and most reliable source of lead generation for the agency. 

Now, cracking one of these funnels isn’t as easy as it sounds – and maybe you yourself have experienced the frustration of spending thousands with little to nothing to show for it.

The key comes down to your positioning and messaging as well as the UX of your funnel and quality of the traffic you’re buying. If any one of these parts is off the whole thing is broken.

Another big issue we encounter when agencies try to run their own funnels and fail is that they are often too close to the source. When it’s your client ads and campaigns you crush it, and yet, when it’s your own it’s like nothing works. This is really common and is the same phenomenon of a writer trying to edit their own copy – they are too close to see the spelling mistakes and their brain fills in the gaps. 

 

RECAP

Ok, so as a recap, here are the three essential parts of a seven-figure agency:

  1. Having the right team and organizational structure
  2. Positioning yourself around a core offer(s) and building processes around these
  3. Having a reliable and consistent way to generate leads

With these three things in place, growing to seven figures no longer becomes rocket science or luck of the draw and you’ll be able to:

  • Increase your profit margins, reduce your workload, AND pay yourself more…
  • Retain clients for longer and generate more testimonials and happy customers…
  • No longer need to rely on word of mouth and be able to put a plan in place for growth…

If you’ve made it this far hopefully its because all of this is making sense to you and resonates.  Likewise, it’s probably because you yourself are hungry to grow your business and ready to start implementing systems that are actually proven and tested by agencies. 

Over the years, my team and I have helped over 700 agencies and freelancers implement the exact same system above by:

  • Refining your core offer(s) and pricing these correctly
  • Building processes to guarantee quality for each and every client (without you needing to micro-manage everything)
  • Nailing your messaging and positioning
  • Closing your leads and sales calls scripts & processes
  • Your lead generation pipeline and automating your marketing with paid ads and funnels

All of this for less than the cost of building your own agency website!

So instead of trying to continue to trial and error everything on your own, spending thousands of recruiting the wrong staff or team members and tanking thousands on lead generation efforts get a structure and marketing system in place for your growth to take you into the future!

To find out more about the system and if it’s a good fit request your free discovery call today: https://agencyfunnels.eightloopsocial.com/form-application

Cat

How to Find & Hire your FB Ad Unicorn or Contractor!

How to Find & Hire a great facebook ads specialist!

 

You thought trying to crack the sales game was the hardest part about building your business or agency until you had to hire Facebook ads specialist to manage the campaigns and funnels!

The experience can only be likened to trying to hit a miniature horse target using a blank BB gun at a rundown amusement park – exhausting and frustrating.

Hire the wrong person – and it can take you under.  Get the right manpower in – and your business can soar to new heights.

Over the past three years, we’ve hired over 16 FB marketers for our businesses (one of them an ad agency) and for our clients as well.

And I’ll admit one thing – I hate hiring. And I suck at it.  I usually hire based on gut instinct or will go and recruit friends, which doesn’t always pan out for me.

I’ve learned the hard and expensive way that there’s a right way to hire and a wrong way to find your unicorn. I also have yet to meet another business owner that has gone through the experience of having to hire as many FB Marketers as I have – and so, in a bid to help you avoid the expensive growing pains, I’m sharing with you the unique process we’ve developed inside our agency to ensure we find and bring in top talent.

As a preface, here is usually what we look for to hire facebook ads specialists (I’ll go into this a bit more in when I explain Phase 1 of the process):

  • Has drive and initiative
  • Resourceful
  • A creative eye and ability to pull strong copy together (although not always necessary as this can be outsourced)
  • Ability to interpret data in a strategic and meaningful way and communicate this back to a wider team
  • Thorough understanding and experience of the FB ads platform
  • Aligned with our company culture and values

If they have proven results in the given niche – even better!

But you can see why we call them unicorns now! 

The Unique “FB Unicorn” Recruiting Process

The process to hire Facebook ads specialist below is basically broken down into five phases, I’ve explored lots of different tacts through the years (including the “gut feeling” hiring process and the DISC profiling etc), this one – so far – has been foolproof. You’ll see why.

Here’s an overview of the “hire Facebook ads specialist” process (note this applies regardless if it’s for a contractor or in-house marketer you’re after. You could also use this process for different digital marketing specifies but would just need to edit phases 3 and 4).

Recruitment Phases:

 

Phase 1 – Talent Awareness

Phase 2 – First Assessment

Phase 3 – Second Assessment

Phase 4 – Third Assessment

Phase 5 – Phone/In-Person Interview

There are really two main things that happen in this phase of hiring Facebook ads specialist: first, you are identifying what your specific needs are and the outcome you want from a recruit and putting this into a job description.  Getting clear on salary or compensation is important here too.

As a general rule of thumb – an experienced FB marketer will command roughly $70-$100K salary.  If you’re looking for to hire facebook ads specialists as contractors, it can be anywhere from $1,500/mth-$10,000/mth depending on experience and skillset required and your spending. If you’re an agency contracting for an account, budget 25% of the account fee towards your contractor costs.

The second part of this phase is where you place your job in front of skilled talent.  This is oftentimes where most people struggle as – unless you already have connections or peers to refer you to marketers, it can feel like the Wild West out there (you can read more about hiring from the client perspective here).

Posting to relevant FB Groups and local job sites are just two of the ways to gain traction.  Likewise, you can use this free directory to get matched with pre-screened Facebook marketers based on your budget, niche and needs: https://digitaldistillery.com/directory/

Phase 2 – First Assessment:

 

This part ties into the first phase in that – part of the job description asks that candidate complete a short survey.  The purpose of this is two-fold:

  1. Who reads instructions properly (you’d be surprised who many don’t)
  2. Identifying marketers with basic competence and understanding

The survey can be created in Google Forms and essentially asks them questions about ads, campaigns, and even hypothetical case studies they need to advise on.

If you’re unsure about potential questions, I’ve posted a few examples below.

Phase 3 – Second Assessment:

 

Most people stop at the first assessment when screening candidates and then hire based on a phone interview.  But one thing I learned the hard way is that being book smart is completely different from being actually good.

There are a lot of marketers out there that can dot all the I’s of FB ads on par, but when it comes to implementation – fall flat on their faces.

And here’s the truth, being a good FB marketer requires that one is skilled at:

  • The technical platform side of things
  • Creative and copyrighting
  • Data analyst able to optimize

These require fundamentally different parts of the brain – which is why the industry often has a saying when searching for a good FB marketer that you’re “looking for a unicorn”.

The second assessment aims to filter out those that can interpret data properly from those that can’t find the broken pixel in a haystack!

As part of this assessment, get each candidate that passed the first round (usually about 20 in this stage) to sign an NDA.  From there, give them access to an ad account and ask them to provide feedback.  This is unpaid.

Keep an eye out on how long it takes candidates to complete this task, who seems eager and hungry, and who requires chasing up (if you need to chase up btw this normally disqualifies them).

Phase 4 – Third Assessment

 

This final technical assessment is the reason our requirement process works so well.  What we do in this phase is we require our finalists (normally about 4 at this stage) to run campaigns on the account for a one week duration.

This will allow you to see how they work (ie: their naming conventions, how they optimise, how they build out creative).  While you shouldn’t really expect results in terms of sales or leads from a one week test, you can still get a great gauge on your talent pool and will begin to spot the stars that really know their stuff.

Just create a new ad account for each candidate and duplicate the funnel so they each have their own pixels and funnels to work with.

The reason you wouldn’t just run this assessment right from the get-go is that – for obvious reasons – you need to dedicate ad spend here for them to run the test (we normally allocate $500 each) – if you have a huge pool of 20 potential candidates, this becomes a costly exercise.

Again, this is usually unpaid although sometimes we do offer $500 payment to each candidate for the week so that they each take it seriously (you’ll find if you don’t pay only about half will complete this stage – which some would argue isn’t a bad thing as separates those that really want it from those that don’t).

Phase 5 – Phone/In-Person Interview

 

By this stage, you will have a very clear preference towards a couple of candidates.  Now is the time to get on calls and make a pick.  Oftentimes, this will come down entirely to company culture and who you best “vibe” with – and, after all this assessment – it’s actually ok to let your gut do all the talking here.

We’ve found ourselves in a position before where we couldn’t decide between two finalists and hired them both!

As you can see, the process is extremely rigorous but – while it may seem like it will take you a lot more time it actually saves you time as you immediately cut down phone interview time.

Take your recruitment process seriously and dedicate the time required to it – hiring the wrong person can take your business under, hiring the right person can grow it exponentially!

 

Your Turn!

Get matched with up to three FB Marketers based on your budgets, needs and niche (free service):  https://goo.gl/forms/3q0wimG7mMJac8fg2

Katya Sarmiento’s Ultimate Hiring Hacks

Hiring Hacks by Katya Sarmiento

Katya Sarmiento’s Ultimate Hiring Hacks

It’s happened to the best of us. We’ve all been burnt in the past by people who seem to have the right skill set. But as soon as you onboard them, they drop the ball. Whether this is your current situation, or you’re only just expanding and new to the hiring process, hiring and on-boarding a team are essential steps in the growth of your agency.

Katya Sarmiento shared with us the three most important steps in anyone’s hiring process. Starting with…

The mock test

Often, potential team members present themselves as skilled and qualified but fail to deliver when put to the test. Which is why it’s of massive importance to put them to said test before you officially on-board them.

Take a salesperson for example. For them, this could be a sales project in the form of an actual situation or task. This shouldn’t necessarily be something you can use in your business, but something that can help them too. It’s a win-win because this could potentially be something they can use in their portfolio.

Remember, you’re not paying them for this so this could easily be just a quick one-hour-or-less project.

The trial period

If they can deliver the outcome you were expecting from this project, you can start them on a trial period – to avoid anyone is “king of the castle” straight away, which sadly tends to happen when a new recruit is given too much, too fast.

In the trial period, you’ll want to establish what the working relationship looks like. Make sure they’re involved in your vision, your company’s culture, your company’s family, so that they can also understand what your expectations are and how to best deliver them.

The on-boarding process

After a 90-day trial period, they’ll need to have established their own OKR’s and KPI’s to track within the company. They need ownership over the results of something in your company, whether that’s sales, client accounts, marketing, or anything else, to ensure commitment and involvement, rather than this being “a job”. Basically, keep them incentivised. 

To recap, you’ll want to follow three clear steps:

  • The mock test
  • The trial period
  • The on-boarding process

Follow this simple rule-of-three, and you’ve got a pretty surefire way to avoid rushed hires who lose interest after landing the job.

The Digital Marketing Guide to Trolls for Marketers

How To Deal With Trolls

The Digital Marketing Guide to show marketers how to deal with Trolls.

After six years of playing in the digital marketing space, I’ve become somewhat immune to trolls – I often forget how horrible of an experience it was to deal with trolls when I was first getting started out in the digital marketing world.  can be when you’re first getting started out.

Spurred on by a recent troll attack where I sort of slightly lost my usual cool, I thought it would be beneficial to create a mini digital marketing guide for all of you marketing wizards on the different types of trolls I have come to observe in the wild interweb and how to handle them.  Kinda serving as a reminder to myself as well lol.

Getting Started With How to Deal with Trolls

You don’t have to put an order for them, they will come uninvited with their unsolicited attitudes and opinions.

I have seen cancer campaigns get trolled. I’ve seen at-risk youth charities get trolled.  I’ve even seen brilliant and beautiful artists get slammed by trolls.

Heck, if mother Theresa ran ads she would get trolled HARD.

Says something.

They. Are. Everywhere.

And if you are making any sort of impact in this world, you’re going to need to get used to them and learn how to deal with trolls.

In fact, in many ways, trolls should serve as a sign that you are making waves as they have become a staple part of the line ecosystem.   

So the first step is to take a deep breath if you’re currently having to deal with them.  They ARE NOT a reflection of your self worth and please do not ever ever base any kind of decision on what a troll may have said to you other than the decision to let it be water off your back!

Ways to Mitigate Trolls

I’m of the opinion that you can’t truly ever get rid of trolls like these.  I’ve worked with too many fucking brilliant businesses and soloprenuers to have seen first hand that they are like the barnacles of the internet.

But, there are things you can put in place to protect yourself and or reduce the amount of trolling you get:

  1. Run awareness-based campaigns before running your direct response
  2. Hire community managers to handle your posts and feeds
  3. Have fun with them and be a master of how to deal with trolls

TYPES OF TROLLS TO DEAL WITH

Here is a list of the most common types of trolls you will likely encounter:

The Bot Troll

These are basically fake bot farms that essentially are created to leave negative feedback and comments across ads and on blog posts.

How to spot them: the comments seem irrelevant to you or what you’re talking about. When you click on the profile it’s a random logo or a page with no content on their feed

How to deal with trolls of this type: They’re not human, no need to respond. Delete and block.  If the issue is persistent and growing have a look at where your traffic is coming from and review your campaign objectives or targeting.

How To Deal With Trolls

The Sexual Troll

They seek validation through shock factor and sexual gratification. Some are genuinely trying to connect but their approach is less than ideal.

How to spot – the dick pic in your inbox is usually a good indication. Comments or messages that are generated around sex or sexual acts usually give it away too.

How to deal with trolls of this type: Delete and ban the person from your ads. If someone messaged you you can also delete and ban although I must say my team and I have a bit of fun with these types and will respond d with dick pics sent from other trolls.

How To Deal With Trolls

How To Deal With Trolls

 

The Keyboard Warrior Troll

These trolls are a little bit nastier than the above and will make snarky comments, accusations, or leave abuse that can sting like a bitch!  Some will take things to the next level and start seeking out all of your content to troll, leave negative reviews on your page without ever having bought or worked with you and go so far as to create negative threads about you in forums.

How to spot them: Horrendous use of grammar most of the time. The profile photo is more often than not some stock image or a cat picture. When you check out their profile their feed is mostly shared links. If you check your CRM you’ll see they’ve never purchased or worked with you before.

How to deal with trolls of this type: They are rigid in their opposition to something, it stems from a deep fear of change and the uncertainty it could bring. They must have everything on their terms and feel in control.  This actually describes every single human being on this planet, however, this type of troll lacks the control in the aspects of their life that most of us as able to draw from and so find power in putting others down.   If it’s abusive or hate-based comments – delete and ban. If the comments are about your product and integrity then respond in a non triggered manner.

For example: “This is a scam and they’re just ripping people off”

Response: “Hey Fred sorry to hear you think this is a scam, I can see from our records that you have never purchased from us before. Can you clarify why you say this is a scam! We have worked with over XYZ customers and pride ourselves on being the best in the market”

If the comment is so ludicrous you can’t even answer in a logical way a good response is “you’re right”. There’s not much someone can argue about you after you tell them they’re right but to all others reading they will see how triggered the troll was to begin with:

Ex: You’re just an alien trying to scam all the money.”

Response: “You’re right”

How To Deal With Trolls

 

The Angry Customer Troll

These are customers that either struggled to get any response from your support team or weren’t happy with their purchase.

How to deal with trolls of this type: Believe it or not but you should come to LOVE these kinds of trolls as the social proof this will build on your online assets once you respond will be pure fuel to your marketing.  Use this as a chance to look after the customer, show you care and handle the issue.  Tip – never ever handle the logistics on the thread, always take it into a DM if possible.

Ex: “I bought my product six weeks ago and still nothing, this is just a big scam!”

Response: “Hey Fred, we’re so very sorry to hear you haven’t received your product yet!  We would like to sort this out for you asap! Please send us a DM with the email address you used to purchase and we will resolve this matter for you!”

An ad with this kind of commenting will propel your conversion rate as this is the kind of stuff consumers want to see, a responsive and caring company.

The Psycho Troll

I’ve only encountered two of these in my life, but boy oh boy – it makes me shudder to still think of those instances.  These are extremely rare but have a sharp bite when they decide to come after you.  They appear to have a personal vendetta against you and will go to great lengths to get a reaction from you and attempt to destroy you.

How to deal with trolls of this type: If you have a psycho troll on your hands tread carefully. The key is not to trigger them further whilst putting and end to the madness. First, reach out directly to them and leave a voice memo asking g to clarify why the sudden attacks. If this leads nowhere involve a lawyer with a restraining order or cease and desist.

How A Service Doc Can Help You Get Past Being Overworked and Underpaid

How A Service Doc Can Help You Get Past Being Overworked and Underpaid

Every freelancer or agency owner has at one point found themselves in a situation where they would underprice their services and go way over scope on projects, in an attempt to keep clients on the books.

And the truth is, it’s counterproductive for the growth of your business and makes it near impossible to gain any kind of momentum. If you look at the big picture, you’ll realise you’re often essentially working for free.

So you get to a point where you have to ask yourself an honest question: do your current prices reflect the future goals of your business?

And if the answer is no, you’re potentially missing one super essential piece in your business: a service document.

How does it work?

Your service document is basically a menu of all the services you or your business offer, as well as the deliverables, and how long each of these particular services take to fulfil. Once you have an internal hourly rate as well, prices for each task are easily calculated, and there are no longer those grey areas, which will avoid you going over scope.

For example, if you’re offering an email sequence, you’ll want to list out exactly what those deliverables are, how many emails (and revisions) are offered, if this includes integrations, and how long it will take you or your team to complete this. From there, you can easily work out how much (internal hourly rate x projected time to completion) you should be charging.

…And you might be surprised.

In setting up your service document, you might be shocked to find out that you could easily be charging about $1,500 minimum for email sequences, if you work out the actual deliverables and time spent fulfilling this service in a way that doesn’t burn you or your business out.

This is fundamental in gaining clarity with your clients and eliminating that infamous grey area where you inevitably tend to find yourself. Now, when you onboard a client into your business, their contract can specify exactly what deliverables you’re charging for and they’re agreeing to.

So if your client comes back and wants more revisions, extra copy, changes to graphics or additional email sequences, you can identify those as non-included deliverables and charge for those accordingly.

And then there’s business development…

Another thing the service document can do for you, is help you move out of the driver’s seat.

You’re expanding. You’ve got a lead generation system in place and a sales person taking calls, but you’re still constantly across and involved in every aspect of your business. And you shouldn’t have to be.

Your service doc is all your sales person needs to pitch clients accurate prices without your involvement whatsoever. And the rest of the team can take it from there, because they have a clear list of deliverables to get to work on.

This will save you hours of time, eliminate going over scope altogether, and help create the well-oiled machine you want your business to be.

To save over 25 hours time on setting up your service document, we’ve released the exact one we use in our 7-figure agency – so all you have to do is edit it accordingly. You can access it here.

And with that, this marks the end of your journey of being overworked and underpaid.

Scaling Facebook Ads – We tested 7 methods, here’s what’s working best….

facebook ads scaling methods

Split Test: The Best Way of Scaling Facebook Ads According to 7 Methods

So your campaign is running great and it’s time to scale – or maybe your client is in planing of scaling Facebook ads fast because they have a budget or ad spend quota they need to hit. However, what’s important to remember when you’re trying to scale, is that there are a number of factors that should change your approach. What are you optimizing for, for example? How fast do you want to scale?

What’s the difference?

There are a number of methodologies of scaling Facebook ads, here are the ones we’d like to test:

  1. Horizontal, no bid: duplicate ad multiple times, stay at the same bid amount/automatic bid
  2. Horizontal, manual bid: duplicate ad set multiple times, change manual bid
  3. Vertical, slow: scale ad set slowly by 16% per day
  4. Vertical, xtra slow: scale ad set by 10% every three days
  5. Vertical, fast: scale ad set by 40% per day
  6. Vertical, xtra fast: scale ad set by 100% per day
  7. Random, campaigns: duplicate entire campaign (pause ad sets that aren’t needed for test in duplicated campaign)

The Test

We wanted to see if there was really some “best” way of scaling Facebook ads, even though scaling is heavily dependant on several factors.

Hypothesis

In this case, coming up with an exact hypothesis is hard, because as mentioned before, there are a few things you might want to optimize for when scaling Facebook ads.

For example, what is the priority here? Is it to scale as fast as possible? Or is it more important to maintain a healthy CPA/CPL? Which means there may not be a “best” way of scaling facebook ads, because there are definitely multiple interpretations of “best” in this case.

So why not run each methodology and see what happens to scaling Facebook ads?

Test Rules

  1. We are limiting the scaling tests to methods that keep the creative the same. This means that our test does not consider the possibility of introducing new offers in order to scale.
  2. We are not scaling out to new audiences in this test.
  3. The original ad set will contain 2 live ads each. For the course of the test, we won’t be allowed to pause or create any ads within any ad set that is part of the test.
  4. We will run this test on 1% lookalike audiences only, to keep the audience sizes the same across all tested ad sets.
  5. We will NOT select expanded interests in any ad set that is part of the test.
  6. We will not do any form of optimization over the course of the test.

Strategy

Here’s how we ran our scaling Facebook ads test:

  • We created 7 separate campaigns (1 for each test)
  • Optimised everything for the ‘Lead’ conversion
  • 7 Days Click 1 Day View
  • Automatic Placements

Some possible problems that could affect the outcome:

  • Overlapping audiences
  • Differing auction conditions across the difference audiences

Results

Facebook Ads scaling Method 1

Pre-scale:

Total Spend: $130.48
Daily Spend: $20
CPL: $4.50
CPC (Link): $1.09
CTR (Link): 0.92%
Leads: 29

7 Days Post-Scale:

Total Spend: $540.02
Daily Spend: $80 (in one ad set ads were disapproved and never ran)
CPL: $7.17
CPC (Link): $1.43
CTR (Link): 0.91%
Leads: 76

This resulted in a 59.33% rise in cost per opt-in, in the 7 days post reaching the desired scale (and we didn’t even quite reach the desired scale because one ad set was disapproved)

facebook ads scaling method 1

 

Facebook Ads scaling Method 2

Pre-Scale:

Total Spend: $128.56
Daily Spend: $20
CPL: $5.84
CPC (Link): $1.08
CTR (Link): 1.42%
Leads: 22

7 Days Post Scale:

Total Spend: $638.52
Daily Spend ~$100
CPL: $13.59
CPC (Link): $2.31
CTR (Link): 1.15%
Leads: 47

This resulted in a 132% rise in cost per lead in the 7 days post reaching desired scale

 

Facebook Ads scaling Method 3

Pre-Scale:

Total Spend: $128.35
Daily Spend: $20
CPL: $4.14
CPC (Link): $1.38
CTR (Link): 1.36%
Leads: 31

7 Days Post Scale:

Total Spend: $666.92
Daily Spend: ~$100
CPL: $9.39
CPC (Link): $1.67
CTR (Link): 0.98%
Leads: $9.39

This resulted in a 126% rise in cost per lead in the 7 days post reaching desired scale

facebook ads scaling method 2

Facebook Ads scaling Method 4

*This is the super slow scaling method. We still haven’t reached our daily budget goal of $100/day

But the cost per lead has shot up and it seems this is too slow to be practical.

Facebook Ads scaling Method 5

Pre-Scale:

Total Spend: $128.35
Daily Spend: $20
CPL: $6.11
CPC (Link): $1.13
CTR (Link): 1.55%
Leads: 21

7 Days Post Scale:

Total Spend: $701.49
Daily Spend: ~$100
CPL: $6.68
CPC (Link): $1.28
CTR (Link): 1.15%
Leads: 105

This resulted in a 9.33% rise in cost per lead in the 7 days post reaching desired scale

facebook ads scaling method 3

 

Facebook Ads scaling Method 6

Pre-Scale:

Total Spend: $128.47
Daily Spend: $20
CPL: $6.76
CPC (Link): $1.61
CTR (Link): 1.10%
Leads: 19

7 Days Post Scale:

Total Spend: $701.53
Daily Spend ~$100
CPL: $6.56
CPC (Link): $1.37
CTR (Link): 1.12%
Leads: 107

This resulted in a 3% DROP in cost per lead in the 7 days post reaching desired scale

facebook ads scaling method 4

 

Facebook Ads scaling Method 7

Pre-Scale:

Total Spend: $128.08
Daily Spend: $20
CPL: $4.42
CPC (Link): $0.95
CTR (Link): 1.41%
Leads: 29

5.5 Days Post Scale (These got cut because people weren’t moving through funnel at all on the back-end):

Total Spend: $525.74
Daily Spend ~$100
CPL: $7.30
CPC (Link): $1.38
CTR (Link): 1.26%
Leads: 72

This resulted in a 65% increase in cost per lead in the 5.5 days post reaching desired scale

facebook ads scaling method 5

 

 

Scaling 40% or 100% daily performed the best in our test.

 

Final Conclusions

Scaling 40% or 100% daily performed the best in our test. The 100% daily scaling actually resulted in a lower cost per conversion at scale. It’s also worth noting that for both of these scaling methodologies the CPL didn’t really shoot up even as we were still scaling.

None of the scaling methods where we duplicated ad sets or campaigns seemed to work that well for us. Though it’s possible that by getting the right configuration of manual bids you might have better luck.

All that said, please consider that there are other scaling methods that we didn’t test here. For example: scaling out to new audiences has traditionally worked really well for us. Also campaign budget optimization is looking like it’s going to be a really really good tool for scaling (results to come). And finally, introducing new offers to your audience can be another great way to scale.

Usually it’s a matter of combining a few of these methods in order to achieve the best results!

 

How Agencies Calculate Internal Hourly Rates

How Agencies Calculate Internal Hourly Rates

While I don’t recommend ever sharing your hourly rate out to clients (they are paying you for an outcome, not time and doing so runs the risk of teaching clients to price hunt), it’s important that you have an understanding of what your agency internal hourly rate is in order to build out your Service Document and price properly. Here’s a rundown on how agencies calculate internal hourly rates.

Generally speaking, the way you come about this is to use your team’s salary or fees, add overheads, and then use a profit multiplier.

Here’s how it works: 

Step #1: Find the Effective Rate of Your Implementer’s Hourly Rate

Let’s say you have a staff member on a $50,000 salary. Your staff, over the course of a year, we give you 1,600 hours of time (this is the average taking into account leave and sick days). This means, his effective rate is $31.25/hr.

Step #2: Add Overheads 

Now, of course, you and I both know that just because he’s doing the implementation work, doesn’t mean other team members or overheads are not going into the production of servicing the client.

So, on average every $1 of direct expense will carry with it $1.34 of overhead. This means that the hourly cost is $31.24 + $41.86 = $73.06/hr. But of course, you want to make a profit as well.

Step #3: Add a Profit Multiplier

Here’s where you use the multiplier. We use a multiplier of 3, other agencies use a multiplier of 2. I would recommend you stick with 3 to protect yourself.

This means that your internal hourly rate is $73.06 x 3 = $219

Once you understand your internal hourly rate, you can then break down time requirements of client deliverables and cost projects properly.  Some agencies will choose to add a 10-20% buffer to invoices in the situation of projects running over scope. Some choose to charge for this upfront and refund any amount remaining once project is completed.

Whatever approach you use it’s important to understand your own costs – without this it will become difficult to built teams and run a profitable business.

If you’d like to swipe our service document, you can do so here: https://academy.cathowell.com/sd

 

SPLIT TEST: 1 DAY CLICK VS. 7 DAY CLICK 1 DAY VIEW

When setting up a campaign – Facebook will ask you whether you want to optimise for a 1 day click or a 7 day click 1 day view.

The following posts examines which window to optimise for for optimal campaign results.

What’s the difference?

When you set up a campaign, Facebook automatically defaults to 7 day click.  The 1 day click means that Facebook will optimise for more people that take action and trigger your event within 1 day of click on the day. A 7 day click 1 day view means that Facebook will optimise for more people that take action within 7 days of clicking your ad and seeing it within 7 days.

Basically, once you have run enough data through your funnel, if you notice that most of your conversions take place within a 1 day attribution frame (you can check this by clicking on your Reporting Columns > Customise Columns > bottom right you will see “Comparing Windows” > select the attribution windows you’d like to check), then the logic goes that you should be optimising for that window at the ad set level to improve performance.

What’s Facebook’s Advice?

Facebook pretty much advises you to choose the window based on two things:

  1. the purchase cycle of your product (ie: if you’re selling something that needs consideration then opt for 7 days)
  2. the window that will get you closest to 50 conversions per ad set per week (as this helps their delivery system learn who it’s best to show your ads to)

They advise to run a split test and:  

“You should choose your conversion window based on the type of conversion you value and want to measure. Don’t measure using a conversion window that doesn’t make sense for your product. Your conversion window should help our delivery system get you what you actually want. That being said, there are certain laws of statistical probability we can’t get around. We do need about 50 conversions per week to optimize an ad set’s delivery. If you can’t get that many, we recommend choosing a more common result. If that doesn’t work, try a longer conversion window. We also recommend trying out various relevant combinations of conversion windows, optimization events, bids and budgets to see what works best for your business..”

Can I switch the optimisation any time?

Yes, accordingly to Faecbook, changing your window won’t cause you to lose any conversion data. However, in general, we recommend against changing your conversion window unless you want to measure results using a different attribution window..

Keep in mind when switching conversion windows that we recommend letting the updated ad set run for a few weeks (of about 50 conversions per week) so our delivery system can adjust to it. This gives us time to learn how to best deliver the ad set for the new window. After the adjustment period, we recommend letting the ad set run for at least another week or two so you can see the results with optimized delivery. This is especially important when switching to a longer conversion window since more time needs to pass for us to have all the data.

The Test

We wanted to see if there was a significant difference between the optimistion windows so we set up a split test and dedicated $2,800 to testing. This was for one of our own funnels and the conversion trigger was for an opt in into a free lead magnet. Here are the results below.

Hypothesis:

Optimizing for 1 day click will result in lower cost per opt-in since Facebook will optimize impressions for people who are likely to take immediate action.

Things to consider:

For this test we are testing 1 Day Click vs. 7 Day Click 1 Day view conversion windows. The results should be valid for TOF lead gen campaigns optimized for opt-in conversions.

Test Structure:

Standard split test (with delivery optimization as the split test variable).

Other ad set settings to note:

Auto placements
Optimization for ad delivery: Conversions
Bid Strategy: Auto (lowest cost)
Conversion event: Lead (standard event)
Delivery Type: Standard

Test 1 Results:

1 Day Click:
CPM: $37.18
CPC (Link): $1.20
CTR(Link): 3.10%
Total Spend: $1,473.95
Cost Per Lead: $5.44

7 Day Click 1 Day View:
CPM: $36.39
CPC (Link): $1.20
CTR(Link): 3.03%
Total Spend: $1,473.95
Cost Per Lead: $5.19

Test 2 Results: 
1 Day Click:
CPM: $29.18
CPC (Link): $3.46
CTR(Link): 0.84%
Total Spend: $601
Cost Per Lead: $23.1.5

7 Day Click 1 Day View:
CPM: $24.19
CPC (Link): $2.66
CTR(Link): 0.91%
Total Spend: $601
Cost Per Lead: $13.98

Statistically significant? Yes

There’s an 86% chance we would get the same winner if we ran this test again.

Final Conclusions:

Using the 7 Day Click 1 Day View conversion window outperformed 1 Day Click in both tests. In test one, 7 Day Click outperformed 1 Day Click by about $0.25 per opt-in but we weren’t able to reach statistical significance before the test ended. In test two, 7 Day Click outperformed 1 Day Click by about $9 per opt-in.

These results were statistically significant.

When you set up a campaign, Facebook automatically defaults to 7 day click.  As a result of this test, we will be continuing to use the default setting for our campaigns, including the ones that usually have 1 day attributions.  

 

IMPORTANT: this test was run December 2018. If you are reading this and it’s been more than 6 months results may no longer be applicable – FB changes FAST!!!

Split Test: Expanded Interests vs Normal Targeting?

expanded interests vs normal targeting

Should you use it or not?

We recently ran a split test to see if the targeting feature was worth a shot… here are our results…

What is it?

The expanded interests feature is where you essentially allow FB to go outside of the bounds of your normal targeting to try and find even more people that may be relevant to your offer.

For example, if you’re targeting “Dog Lovers” and have an audience size of 1million, selecting the expanded interest checkbox will allow you to go after 10million.

When the feature first came out about a year ago, the first test we ran came back with less than impressive results. Scrap that – it was a hot mess and us marketers soon learned to steer away from it.

But – if there’s one truth in FB Marketing is that the platform changes faster than changing underwear.

What worked one week, can bomb the next – and vice versa.

So we recently ran the test again to see if the feature had improved at all.

HYPOTHESIS

By choosing “expand interests when it may increase conversions at a lower cost per conversion” our average cost per opt-in will decrease.

TESTING BUDGET 

We used $2,300 over a two week period to test the feature against a control ad set.

CONSIDERATIONS 

It’s highly likely that the results of this test depend on the size and quality of the targeting audience. For example, if the targeting is very broad, then selecting expand interests likely won’t have much effect at all. But if the targeting is more narrow, then it’s a bit more interesting to see how expanded interests perform.

One possible use case for expanded interests is when you know you have a really good audience but it’s small and so you can’t scale it very much. If you can’t find any other good audiences and you can’t scale the original high-quality audience then it might be a good time to try expanded interests.

TESTING STRUCTURE

Standard Facebook “Split test” with the audience as testing variable.

RESULTS 

Test 1 Results:

Expanded Interests:
Total Spend: $500
Cost Per Opt-in: $8.15
CPC (Link): $0.99
CPM: $14.05

Normal Targeting:
Total Spend: $500
Cost Per Opt-in:$8.28
CPC (Link): $1.09
CPM: $14.18

Test 2 Results:

Expanded Interests:
Total Spend: $650
Cost Per Opt-In: $7.22
CPC (Link): $1.69
CPM: $28.69

Normal Targeting:
Total Spend: $650
Cost Per Opt-In: $7.93
CPC (Link): $1.80
CPM: $24.83

CONCLUSIONS 

So expanded interests won by a small fraction – but not big enough to make it a huge deal.

However, granted that the last time we ran this test it was a landslide fail, this is extremely promising and we have now ourselves started to use the expanded interests feature across our campaigns.

How to Stream a Live Counter on Facebook

Instead of having to create a video for your launch offer that involves hours of recording time and managing your posting at just the right time, why not try streaming a live counter to your Facebook page.

This is setup using ClickFunnels and OBS, so check out the steps below to create your own.

Tips

You can only record a live for 4 hours so make sure you set yourself a reminder otherwise you’ll need to go live again.

Step #1

Create a custom landing page, it doesn’t need to be anything too fancy and create a counter function.

Step #2

Open OBS (software for recording and live streaming) to edit. Make sure you have scene selected and under the sources category select Window Capture from the menu and the correctly labelled capture you are using. Then click ok. From here you can adjust or re-position your window to suit.

Step #3

Inside your Facebook page under publishing tools in the top tool bar, click create then select live video from the menu options. Once your live screen appears, click connect and you will see that Facebook gives you a stream key. Copy this key and go back inside OBS.

Step #4

Once in OBS, select settings and then stream in the left hand side of the menu. Click show and paste in your stream key. Click ok.

To note: Every time you go live (with a new live) or stream a live counter on Facebook you will need a new stream key.

Step #5

Click on start streaming and your live stream screen will show. You can choose to share it in a Group or a page and make sure to add any copy and a title (you can’t go live with video without one).

You can now push go on your counter will go live. You can continue doing any work or browse any sites on your laptop with no interruption to your post.

Links to:

OBS – Free software for recording and live streaming