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Evaluating the Effectiveness of Facebook Ads for DTC E-commerce

With over 2.9 billion monthly users, Facebook remains an ever-present social media platform in the lives of many and the most used social media platform. This makes advertising on Facebook an increasingly popular strategy for many direct-to-consumer (DTC) E-commerce businesses. 

But with so many alternative advertising options available, are Facebook ads really the best option for your company?

So, here is everything you need to know about Facebook ads, whether you are an established or a new DTC E-commerce brand.

Table of Contents

  1. Facebook: Scope, Audience, and Metrics
  2. Pros of using Facebook Ads
  3. Cons of using Facebook Ads
  4. Are Facebook Ads Right For You?

Facebook: Scope, Audience, and Metrics

Due to its wide usage and several advertising options, Facebook remains a crucial component of the social media strategy of many companies.

Since it started in 2007, Facebook ads have had several iterations, but at the core, they remain paid posts that businesses use to promote their products or services to other users.

Facebook offers several ad formats (video, image, carousel, stories, etc.) from which your business can choose, depending on which best suits your campaigns. 

Facebook then sends the ad format you have selected to targeted users based on specific criteria like demographics, location, interests, and other profile information that may align with your business.

Audience

Updated reports from Meta for the fourth quarter of 2022 show that there are over 2.9 billion monthly active users(as stated earlier), 266 million monthly active users in the United States and Canada, and 407 million monthly active users in Europe.

The distribution of Facebook users worldwide as of January 2022, by age and gender, is as follows: 

AgeMaleFemale
13-173.2%2.4%
18-2413.3%9.3%
25-3418.4%12.6%
35-4410%7.9%
45-545.8%5.2%
55-643.3%3.5%
65+2.8%2.5%

From this, we see that Facebook has done quite some work with providing useful data on its audience on which it can channel its targeting capabilities allowing your DTC brand get in front of your perfect ideal audience regularly.

There are a number of options your DTC E-commerce business can go for. 

For example, if you’ve built up a Facebook page with a few thousand fans that match your ideal customer customer profile (ICP), targeting those fans is the cheapest way to reach them  as you may pay less money targeting them versus targeting a cold audience.

You may also create an audience replica of your fans, people with similar interests, likes, activities, and behaviors. 

In addition to that, if you have an email list, you can segment people who have shown interest in any of your products based on your web analytics, and upload those email lists on Facebook, which they would then compare to their database, search matches, then separate them in a different category. So with that category of people already on your email, you have an organic audience to target. 

You can even take it a step further by requesting an audience replica.

You may also target (the fans of) other Facebook pages. This could be your competitors or people aligned with your DTC E-commerce business. 

User Statistics and Metrics

According to Meta’s press release for the fourth quarter of 2022, The number of daily active (Facebook) users was 2 billion on average for December 2022, an increase of 4% year-over-year, with the average android user spending an average of 19.7 hours a month on Facebook.

What does this mean for your DTC E-commerce business?

The increased number of daily active users and the high amount of time spent on Facebook by users presents a valuable opportunity for your DTC e-commerce business to reach and engage with a large and active user base. 

That said, we have listed 34 valuable Facebook user metrics you may want to know should you intend to place ads on Facebook. 

Sounds like a lot? 

That’s because it is.

If you know enough about Facebook to leverage its audience and advanced targeting capabilities, your business can effectively target users who are likely to be interested in your products and services, increasing the chances of conversion.

They are:

There are 60 million business Facebook pages, and 140 million brands use Facebook every month

85% of American brands have used Facebook to market a product

More than 50% of American Facebook users have listed 10 interests

75% of online users with an income more than $75K are on Facebook

Users on Facebook watch 100 million hours of videos on Facebook every day

52% of adults in the U.S. use Facebook for getting news

69% of Americans use Facebook

42% of teenagers in the United States use Facebook

70% of adults in the United States visit Facebook every day. The only other app that ranks higher is Youtube at 83%. Instagram comes in after Facebook at 47%.

98% of Facebook users access the app on mobile

78% of U.S. consumers make purchases through discoveries on Facebook.

15% of Facebook users use the social platform to look and shop for products.

93% of businesses are active on Facebook.

Over 200 million businesses use Facebook’s apps and free tools.

On average, 35.7% of posts from a Facebook page are images.

Link posts receive 73% less engagement than video posts.

Adult users in the United States spend an average of 33 minutes per day on Facebook.

Facebook has 2.93 billion monthly active users. A 1.3% year-over-year jump, or an increase of 39 million users.

36.7% of the world’s population uses Facebook monthly. 2.93 billion monthly active users equal 36.7% of Earth’s 8 billion people as of February 2023. 

Facebook is the third-most downloaded app, after Instagram and TikTok

Facebook is the 2nd most used global app based on total usage time

More than 3.3 billion people use Facebook’s family of services (Facebook, WhatsApp, Instagram, or Facebook Messenger) every month.

Facebook Stories have 500 million daily viewers.

Facebook.com is the third-most-visited website in the world. It is preceded only by Google and Youtube

Facebook is the favorite social platform of the 35-44 demographic

Facebook use accounted for 25.7% of the time U.S. adults spent on social platforms in 2022. This means that for every one hour a U.S. adult spends on social media, they spent approximately 15 minutes and 25 seconds on Facebook.

Businesses receive more than 1 billion messages from all Meta apps every week

Facebook ads reach 33.3% of the global population over age 13. Each person in the world has a 1 in 3 chance of seeing a Facebook ad if they are over 13.

The potential ad audience for Facebook Reels is 697.1 million people

Facebook ads reach 62.6% of all Americans aged 13+

 Facebook’s ad audience is 56.4% male and 43.6%  female

Over 140 billion Reels get played every day across Facebook apps

The average time an American spent monthly on Facebook is 16.1 hours

Approximately 37% of Facebook users are likely to make at least one purchase on the platform in 2023. Therefore, we can expect around 1.1 billion out of the 2.93 billion Facebook users to use the platform as a means to purchase products.

The Pros & Cons of Facebook Ads

Pros of using Facebook Ads

With about 1 in 4 people alive using Facebook daily, it is by far one of the most profitable and effective advertising channels if you are willing to invest enough time and money in it to see actual results. The story is told of a guy who could target his roommates and just his roommates using Facebook ads. If he could pull that off, surely your E-commerce business can too.

Without further ado, here are some reasons to use Facebook ads:

1. Your competitors already use Facebook ads.

If your competitors are popping up on your ideal customer or client news feed day in and day out, there is a high chance they will be on the mind of those customers when it’s time to make a purchase. Wouldn’t you rather be front of mind for your audience? 

You could even take it a step further, getting in front of competitor audiences by targeting Facebook users who already have an interest in their pages. 

To use this targeting option, go to the Ad Set section of your Facebook ad campaign and scroll down to Detailed Targeting. Click the Edit button and type a competitor into the search bar. In this case, you want to choose search results categorized as Interests.

You can also get ideas from Business Suite.

To use Business Suite for competitive research, navigate to your page’s insights in the tool and then to the Benchmarking tab. This feature provides recommendations for similar pages to yours without creating a list independently. By adding a business to your list, you can track and compare your page’s performance over time. Additionally, you can visit your competitors’ Facebook pages for further research.

Or are none of your competitors using Facebook ads yet? This is an even better place to be because you can be the first to do it. If there’s less competition in your space, you might actually find that it’s cheaper to run ads.

2. Your content isn’t reaching anyone organically anymore.

Here is the truth that may be difficult to admit:

Organic reach has decreased significantly over the years, making it increasingly difficult for businesses to reach their ideal customers.

So, as much as we’d love to pretend that the hours of work we put into managing our Facebook pages are worth anything these days, it’s not. You can have 1000 people who like your Facebook page and only reach 20 when you post something.

This decrease in organic reach can lead to frustration and wasted effort, especially for small businesses that may not have the budget for extensive budget advertising—which is how Facebook ads can help DTC E-commerce businesses.

While organic reach may have declined in recent years, Facebook ads present an excellent opportunity to utilize Facebook ads to reach a wider audience. 

With ads, you can target specific demographics, interests, and behaviors. Facebook’s advanced algorithms can also help you optimize your ad performance, allowing you to get the most out of your ad spend. 

3. You can start small and scale up as you sell more products.

This is one of the well-known pros of using Facebook ads.

Unlike traditional media, like TV, magazines, or radio, with as little as $5 a day, you could place ads that introduce your business to a whole new world of customers.  

Once you have a bigger budget and know what ads and funnels bring the most conversions, you can then scale your ads and reach even more people daily. 

4. Facebook’s targeting is unrivaled. 

Facebook’s targeting options are second to none.

Since you can narrow down and get ultra-specific with the people you target, you won’t be wasting money directing your ads at people who would never buy your products. 

Plus, Facebook has re-targeting. This fun feature lets you show your ads to people who have already visited your website. Remember how you added that one pair of bags to your shopping cart that one time, and now they’re following you around the internet? You can do this to others, too—with your products.

Cons of using Facebook Ads

1. It is a social network, not a business network.

Being a social network rather than a business network is one of Facebook’s major drawbacks when it comes to advertising. Since its primary purpose is to connect people and not to provide a platform for businesses to reach customers, ads can often feel intrusive and out of place on the site, which is why businesses must go out of their way to craft ads that blend in seamlessly and are truly captivating.

2. You might be advertising to fake or dormant profiles.

When you run ads on social media platforms, it’s important to keep in mind that not all profiles may be active or real. Some users may create fake profiles for various reasons, while others may simply stop using their account or become dormant. If your ad is targeted towards these inactive or fake profiles, you may not get the desired results from your ad campaign.

3. Many fake ads have questioned the credibility of small businesses using Facebook ads.

Unfortunately, fake ads on Facebook have become a common problem that affects small businesses who advertise on the platform. These fake ads can take many forms, such as false product listings or ads promoting nonexistent businesses, and they can be difficult to detect for both Facebook users and business owners alike. Not only can they cause confusion and mistrust among customers who may have been misled by the fake ads, but they can also damage the reputation and credibility of the small businesses that are being impersonated.

Are Facebook Ads Right for You?

Generally, Facebook ads are a highly effective tool for DTC E-commerce businesses looking to reach their target audience and drive sales. 

However, the suitability of Facebook Ads for your particular business depends on various factors, including your business’s specific needs, marketing budget, and target audience.

If your goal is to get sales and conversions, with the ability to create product catalogs, dynamic ads, and conversion campaigns, you can drive targeted traffic to your website and increase the likelihood of making a sale.

Moreover, Facebook ads are incredibly visual, as they are on an inherently visual platform, unlike other text-based PPC options. Done right, they blend in seamlessly with the videos, images, and other visual content in users’ News Feeds enabling you to convey the aspirational messaging that makes high-quality ads so compelling.

Conclusion

Ultimately, E-commerce business owners must view Facebook ads holistically to see the visibility of your ads should you determine them a great option for your business. Bad tracking simply strips you of the rewards of your ads.

Also, remember your ads must not look like ads. Facebook is a social platform, and for your ad to be successful, it has to resonate with the audience through logic, wit, or education.

Looking to boost your business’s marketing efforts with Facebook ads? Book a meeting with our sales team to learn more about how we can help you achieve your advertising goals and drive growth for your business.

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