With the news that Procter & Gamble is cutting their spend on targeted Facebook ads, all eyes are on the social media platform.

But Procter & Gamble isn’t getting off Facebook—they’re just finding that Facebook’s hyper-specific targeting features are not necessarily as powerful for their business as originally imagined.

When Brands Go Small And Succeed on Facebook - Illustration

Why? Because P&G sells toothpaste. Cosmetics. Dishwasher detergent. Facebook’s targeting capabilities are intense and hyper-specific, but P&G’s products aren’t products with well-defined, specific niches. Everyone needs to buy toothpaste, dishwasher detergent and shampoo.

And so, what P&G’s decision means for us marketers?

 

It means that they’ve finally realized something that new brands, startups and local businesses have known for years—that the largest social network’s targeting capabilities are more interesting for how they can enable new kinds of businesses, rather than prop up the old.

Businesses That Win On Facebook

“SMBs (small-medium size businesses), we think, are a very core competitive advantage for us,” Sheryl Sandberg said on a recent Facebook earnings call, and if the P&G news proves anything, it proves her right. Facebook’s powers are not best utilized for selling toothpaste to every household in America—they’re best utilized by small, local businesses and entrepreneurs with new ideas.

The kinds of businesses that are getting great results from Facebook advertising have niche customer markets, very well-defined buyer personas, and a digital edge—whether that’s great creative (videos and imagery), social leverage (Kickstarter-based businesses) or actual iOS/Android applications.

“What’s interesting is that what you see is SMBs able to use tools with some of the biggest brands in the world,” Sandberg added. That’s one of the big lessons of Facebook advertising—it lets small companies do what only big brands were once capable of doing.

When Brands Go Small And Succeed on Facebook

Some big brands do find success with Facebook advertising—but when they do, it’s because they don’t behave like big brands.

In 2015, Hillshire Snacking (a subsidiary of Tyson) launched a new line of portioned-out protein snacks and used Facebook Ads targeted at a specific group of early adopters to start building buzz.

They targeted:

  • Women
  • Aged 25-54
  • With a preference for fresh, unprocessed food
  • Who were demonstrated, early adopters

Hillshire is not a small startup. But Hillshire Snacking—with its charcuterie-influenced products designed for a more upscale, millennial audience—feels like one.

With women in control of 85% of purchasing decisions and making heavy use of internet research, particularly social media, to decide on purchases, Hillshire was clearly aiming to get its products in the hands of possible new brand ambassadors.

By targeting based on Facebook’s “early adopters” cohort, they could ensure that the women they reached had a demonstrated interest in trying new products. They could ensure that Hillshire’s value proposition appealed to them by targeting based on dietary preferences.

Then, all that was left to do was dazzle with the creative—which they did with a series of well-produced video ads:

Screenshot 2016-08-24 at 2.21.04 PM

From all appearances, it’s been a successful campaign. Tyson ($TSN) is at an all-time high, and Seeking Alpha specifically credits their awareness of changing consumer trends and their focus on protein-based prepared foods.
Screenshot 2016-08-24 at 2.21.11 PM

How Startups Can Go Social To Crowdsource Funding

For entrepreneurs working on more traditional hardware products, the old process of finding a manufacturer, finding a distributor or a wholesaler, and finding retail outlets is no longer the only route to success.

Crowd-sourcing particularly has become a popular source of startup funds. Since Kickstarter and Indiegogo and other crowdsourcing platforms are inherently social, Facebook ads also serve an important role in propagating and spreading your ads through people’s friends and families.

The more people see their friends “liking” or sharing an ad, the more likely they are to click through to your campaign and invest their money.

Screenshot 2016-08-24 at 2.21.17 PM

Smart fitness tech company Skulpt was running an Indiegogo campaign for a new body measurement device, and they needed more contributors—$100,000 worth to be specific—so they went to Facebook.

To get to their goal, they launched a Facebook ad campaign targeting:

  • Men and women
  • Aged 25- to 50-years-old
  • Who were fitness enthusiasts and early tech adopters

Skulpt made great use of video ads demonstrating their new device—the Skulpt Chisel. The social-first strategy paid off, with each video ad garnering a huge number of likes, comments, and shares.

Screenshot 2016-08-24 at 2.21.29 PM

Their campaign resulted in:

  • 3X increase in conversion rate
  • 3X increase in sales compared to the previous period
  • 4X more revenue than initial goals

How New Businesses Can Get Huge Leverage From Facebook

The importance of Facebook advertising to native applications cannot be understated. Nowhere else can app and game developers reach as niche an audience as they can on Facebook—and as the number of apps in app stores has skyrocketed, they’ve already become naturally more niche and suitable for the platform.

Combine that with the fact that a massive percentage of Facebook’s users are on mobile, and you have a crucial distribution channel for app entrepreneurs. One-tap CTAs can take users straight from their feed to your app—that’s unprecedented.

Screenshot 2016-08-24 at 2.21.41 PM

Tilting Point Games faced a common dilemma with their game Photo Finish—user acquisition in a time when app stores are beyond saturated.

To get their horse-racing smartphone game out among potential users, they placed a Facebook ad with a combination of great targeting and a powerful call-to-action (CTA):

  1. First, they targeted the ad towards people aged 30 or older who lived in countries where horse racing was popular, characteristics they’d found predictive in early user testing trials.
  2. Then, they used an “Install Now” CTA —an easy and frictionless way for potential users to go from noticing their game to installing it.

As their ad ran and returned results, they developed lookalike audiences based on the demographics where it hit. Off of this, they continued to improve and refine their campaign, which ended with a 2x return on their spend, a 6x increase in (organic) app installs and a 20X boost in daily active users.

The Future Is Niche

Whether you’re an app developer, a startup crowdfunding to fulfill your first orders, or even a small subsidiary of a bigger brand, the leverage you can get from Facebook advertising depends on1) how niche your product is, and 2) how well you understand that niche.

This means there will be big, powerful, commodity-based companies that will fail to fulfill their potential with Facebook advertising.

That’s fine. What you need to do is think about how your business (or business idea) is uniquely positioned to succeed on this massive social platform.

The pretenders are starting to leave—now it’s your turn to shine.

With the news that Procter & Gamble is cutting their spend on targeted Facebook ads, all eyes are on the social media platform. But Procter & Gamble isn’t getting off Facebook—they’re just finding that Facebook’s hyper-specific targeting features are not necessarily as powerful for their business as originally imagined. Why? Because P&G sells toothpaste. Cosmetics. Read more

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