Recently we posted an article on how to increase Facebook ads threshold. In that article we discussed why you should run your paid ads only once per day and how to increase the CTR (click through) rate of your ads so that they are more profitable. In this article we’re going to talk about another one of the ways in which you can increase your Facebook advertising revenue. In particular we’re going to discuss why you shouldn’t run Facebook adds any faster than you have to, why you should increase your daily ad budget, and why you should only run one ad at a time.
We believe it’s important to understand why we’re charging a fee to run our ads. When you sign up for a free account with Facebook, you agree to the terms and conditions outlined by Facebook and agree to run ads based on the demographics provided by their internal system. Every day a computer image is created of the world as it exists today. Each time an ad is displayed on a user’s Facebook page the computer screen is refreshed. The system is designed so that people who are most likely to be interested in viewing ads are given the most attractive ads based on their own preferences.
All this sounds great. You don’t have to pay anything to run ads, and you don’t have to wait for your schedule to update to make sure you’re displaying the right ads each day. However, all of these benefits come at a cost. Every time you run an ad in the amount you are charged increases by approximately fifteen percent.
This fifteen-percent increase in how much you are charged each day is called your Pay Per Click Threshold. If you want to earn money with Facebook, you need to meet that threshold (the minimum payment requirement is the total of your daily ads and the cost of each one) before you can run them. So what’s the minimum payment requirement? Your daily ads must earn at least five dollars per day for you to reach the daily threshold.
Facebook has implemented a new system where you aren’t charged any extra fees if your ads don’t earn anything over the minimum amount required to cover your advertising costs. Now you have a choice. You can either pay more each day in order to earn more and pay nothing for your ads that don’t generate revenue. Or you can choose the second option which is to pay less than minimum every day in order to reach the threshold and pay nothing for the ads that do earn revenue. This is the new Facebook advertising method that has been introduced in order to reduce the burden on the publisher by allowing them to earn more with their ads each day while only paying the minimal threshold fee.
How does Facebook decide what your minimum payment is going to be? Facebook divides the daily revenue between your entire team members who create the ads and the people who actually sell the ad space on the right side of the site based on a schedule. For instance, someone who clicks on an ad might only get ten cents per click to someone who views a particular page might see fifty cents. So that’s how Facebook decides how much to pay for each individual person or team member who creates your ads each day.
But there’s a problem. When someone views your ad they have to make a judgment on whether or not it looks like they will actually purchase something. That means for every dollar that’s earned by the ad you’re paying thirty cents in fees. You may be getting away with paying ten cents per click, but that can easily double or triple the amount you need to pay in order to break even. That means you will actually lose money on all your ads if you don’t have an advertising system in place that can effectively lower your overall cost per click while keeping your revenue consistent.
There are many different things you can do to try and control your costs so you can run Facebook ads without running into this problem but only if you have the resources to do so. Some of the best suggestions are things like optimizing your landing page and using the right keywords. Optimizing your landing page is a great way to improve your click through rate so you can potentially increase your revenue per click. Using the right keywords and creating content that the audience is interested in can help you generate sales without paying for advertising that can help you keep your cost per click consistent. All these strategies are easy to implement and can keep you from wasting any money when you don’t have the tools to do so.