Whether you're already involved in Facebook advertising or thinking about getting started, knowing our three-step process for bringing down your cost per acquisition on Facebook can't be a bad thing! On average we see 70% reductions in CPA through Facebook adverts when following the simple process of:

• Data Insight
• Smarter Targeting
• Aggressive Optimisation

As an example, the graph below shows the CPA (green line) versus the total conversions (black line) monthly in each phase of the process.

Often clients don't run their campaigns in the optimum way, as shown above. The data phase comes first when you get involved in a new account - this doesn't make any difference to the results by itself, but underpins the next two phases. By getting smarter with your targeting usage, based on data, you can dramatically reduce CPA; whilst data-led optimization allows you to increase the volume of conversions whilst continuing to decrease the CPA over time.

Your CPA on Facebook will largely depend on exactly what you're classing as an acquisition in your campaign. This could be almost anything from leads, comments, downloads, purchases, sign ups and more. Regardless of your goal, integrating this three-step process into your strategy can help you decrease your CPA. We've done this for marketing companies looking to increase their newsletter sign ups, e-commerce stores looking to increase sales, and even construction firms looking to generate leads and it hasn't failed yet.

Step 1: Data Insight

As you can see, the data phase doesn't drive immediate results, but this phase is the key phase and lays the groundwork for driving your costs down over time.

The concept of the data phase is to gain a deep audience understanding so that you can more effectively target your campaigns. By drawing out audience insight, you can identify where your audience are active, and identify lower competition targeting segments. What we're aiming to achieve at this stage is a higher level understanding of the audience so that we can create better targeting sets that will have less competition, less wasted impressions, and a higher quality of audience when we relaunch any campaigns. Depending on your business, you may have some great data sources in house such as your CRM, which can help you at this stage. This will all depend on how advanced you are with your data. As standard for our clients, we look at the following sources as a minimum, and with these you can get some great insight.

The place to start to gain this insight is in your current audience data. This can be drawn out from Facebook Insights & Google Analytics as an initial starting point. Facebook Insights will show you the age and gender of your current page audience, and those that you are reaching and engaging. Google Analytics will show you similar information for your website visitors, which you can then segment based on conversions to see who actually converts on your site.

Use the Facebook insights audience demographics section in detail. This is particularly useful as you can see three graphs, the first showing your fans broken down by demographic versus the total Facebook audience, the people you've reached broken down by demographic versus your page audience, and the people you've engaged by demographic compared to your page audience. This allows you to see where you are over and under performing in terms of reach and engagement, and also what age band and gender your audience is more likely to fall into. If you see that your audience are over-indexing in the female 45-54 category for instance, and that this is the case on reach and engagement too, then this gives you a pretty good sign that these are the people to include in your segmented targeting sets later on.

This is a basic starting point. From here, you can then mine other sources to gain more insight on your audience. Tools such as Optimal Social can really help to show what else your audience like. Tools like this rank your audiences other interests, providing you with invaluable insights into where audiences cluster and giving the start point for targeting sets.

We use a combination of data sets from proprietary data sets, Optimal Social, GNIP data, Facebook Insights, Google Analytics, customer CRMs, and more to learn as much about the audience we want to target as possible.

If in doubt, get a data analyst involved at this stage. You're looking for insight that will help inform your targeting sets, so the more relevant information that can help you understand your audience, the better.

The key with this data is to create insight to inform your targeting sets. These can really focus your campaign, allowing you to achieve strong results at the next step. Some examples here include looking at the market potential versus the total US Facebook audience by age to show that your ideal targeting set will be between the ages of 18-30, what interests rank highest amongst your current audience, the education status, gender, location and more of your best fans/audience to allow you to target more of them as we move forward.

Step 2: Smarter Targeting

Audiences are the new keywords, and on Facebook, this is very much the case. There are a number of ways to target your audience, depending on the depth of insight you have. There are two ways that we use that give us the most success.

Firstly, using audience interests to target is highly effective. By understanding our audience, and what else they like we can start to create targeting sets that may include lower competition interests, and will be grouped into segments for testing (much like Ad Groups in AdWords). This involves a combination of data led insight, and common sense based interest identification.

The second targeting tactic is to take the audience insight you have generated and apply filters to your CRM. When working with large brands this is highly effective as they generally have very large databases. By segmenting this database based on age, gender, purchase history (aligned with interests), income, location and other factors you have pulled out you can create an efficient custom audience based on emails or phone numbers to match with Facebook's data. With custom audiences you can create targeting sets based on emails or phone numbers, so you can segment your audience and upload how you like to create an accurate set.

Another consideration is to tailor your creative based on your newfound audience knowledge. Don't let your ads team be lazy and just create three or four versions - create tailored ads that will work for the different segments of your potential audience that you are focussing on. Make use of Power Editor to affect placement, consider dark-posts, and use Facebook's new call to action buttons where appropriate to increase clicks. The key is to ensure that your ad is as relevant as possible - as we've segmented the targeting sets and got more advanced from the initial data in our targeting, use this knowledge about the audience to create advertising that they will want to interact with.

The key here though is to apply data to your targeting sets, and to break everything up in a sensible way so that you can test each targeting set and judge them on their own merits (and CPA!). You ideally want to be creating targeting sets with the same methodology you would create Ad Groups with in AdWords - so relevant interests go together. Ensure that your targeting set is detailed enough to create a targeted audience, including interests, age, and location together as a minimum.

Step 3: Aggressive Optimization

At the optimization stage you need to invest time, and be aggressive. There are a number of social media advertising tools that will help you by allowing you to set automated rules to optimize your adverts at a basic level, but manual input is always needed to optimize effectively. Tools that can help include Qwaya, Ad Parlor and Socialbakers.

Examples optimization rules could include:

- If CPC =>$0.50 then pause ad

- If frequency => 5.4 then pause ad

- If CPA =< $0.55 and daily budget is reached then +20% to the daily budget

- If reach =< 1,000 and CPA =< $0.40 then +5% to CPC

Optimising in this way will allow you to bring your CPA down and give you confidence to increase your spend and therefore increase the number of total conversions.

One element to keep an eye on is your frequency. Facebook adverts are still very display based, regardless of their placement in the NewsFeed or on the right-hand side. As a result, their performance drops heavily once a user sees an advert more than three or four times. From our ad account data we've pulled out the following look at ad frequency, to show the sweet spot to get your started:

With placement and creative, you will be able to phase out the ads that aren't working quickly if you have set everything up in the right way. The Facebook reports section within the ads system is your best friend for helping you with this data. You can filter by data sets to see everything you need quickly.

There are a number of elements to optimize, including ad copy, creative, targeting sets, time of day, placements and so on. Change your bid levels, your maximum budgets, and pause your adverts regularly to ensure performance. Ad optimization in itself is a whole other blog post, but suffice to say it's a crucial part of decreasing the amount you are paying for a conversion through Facebook advertising.

So in conclusion, what's not to like? Have a go and see if you can knock 70% (or more) off your cost per acquisition when using Facebook advertising, simply by getting a little smarter with how you use data. By using this method, we've made Facebook campaigns for us and our clients that beat the cost per conversion from AdWords and other sources hands down, so it really is something that everyone should try.

Let us know how you get on in the comments!