Facebook Ads and How does Facebook Make Money?
Facebook ads is the main source of Revenue for the platform. Facebook started in 2004 , Facebook is a social media platform and it makes money by advertising. Almost all of Facebook’s revenue comes from ads on Facebook and Instagram. Most of the ads are “pay-per-click”, meaning that advertisers pay Facebook each time a person clicks on an ad.
Facebook Ads Getting Started
The goal of Facebook ads is the same regardless of the product you promote, that is if you can make 2 dollars for every one dollar you spend on the FB ads, You make a profit at the end of the day. This could be done on FB ads by promoting a drop shipping product, digital product or Affiliate product or coaching services or you can run your own marketing services
Why should we be promoting our products and services on FB ?
But why should we be promoting our products and services on FB ?
- Presence of Audience
- Audience Interest targeting and Audience Insights
Audience Insights and Audience Presence: Anyone who wants to market their products or services should definitely advertise on FB. As a entrepreneur or business owner you cannot miss out the Facebook platform and since Facebook owns Instagram, you can advertise directly on Instagram from Facebook.
And about with over 20 billion clicks on Facebook, you can find your targeted audiences very easily
you can optimize the ads like no other platform out there by creating custom and look alike audiences and the more data you collect on pixel the more better the ads perform.
Audience Targeting is really evolved on FB, you can niche down the audiences and get audience insights for your product or service even before you start advertising. You can dig deep with audience interests, behaviors, demographics, connections, age ranges, languages, or locations, you can stack the interests with other interests or target individual interests.
Understanding Facebook ads and ROI or Return on Investment
Not all products come with the same profit margin as others, First of all you need to remember that FaceBook ads are an auction and you are bidding against other competitors who want the attention of the same audience. There are several factors that affect the cost of facebook ads, like the ad account history, the audience you are targeting for example the CPM or cost per thousand impressions might be very high on Facebook ads if you are bidding on an audience interest with a lot of competition
Let us see what ROI or ROAS is?
ROI or Return on Investment or it can also be called as ROAS also that Return on Ad spend,
if you are putting in a dollar and getting the 2 dollars back the ROAS is 2x or 200%
if you are putting in a dollar and getting 3$ back in profit then the ROAS is 3X or 300%
Facebook ads for entrepreneurs and How to make Money on Facebook ads
Different products have different profit margins, like drop shipping, affiliate marketing or digital products come with different profit margins. I know some people get you hyped about how drop shipping made them thousands of dollars but what they don’t tell you is the profit margins associated with dropshipping, is mostly 20% to 35% , it is just a hype to click on their videos and buy their products. If they told you upfront the Profit they made, it would not even catch your attention.
5 Ways to Monetize Facebook
- Affiliate Marketing
- Ecom Funnels and Agency Funnels
- Digital Products
- Coaching or Marketing Agency
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