I have to admit, I feel a little late to the Facebook advertising game.

I’ve been working so heavy on client work, that I haven’t had time to set up ads for any of my personal projects, including Breakthrough Marketing Secrets.

Instead I’ve mostly relied on you sharing the good stuff with your friends, and the occasional relevant post shared with LinkedIn groups I’m a member of.

And yet, I better walk the walk — right?

So if I’m going to talk about paid traffic being the holy grail of building your business online (no matter what industry you’re in), I better make an investment.

And so I finally got the Facebook bug — after so many years relying primarily on AdWords traffic.

Now don’t worry if you’re coming in behind me. I’m told it’s still the Wild West era on Facebook. While nearly everybody’s got a page or a presence there, very few are actually advertising. And so it’s actually still really cheap to get clicks and customers. Because you’re not competing with the teeming hoards yet.

And yet, if you go willy-nilly in setting up your campaign, you’re still gonna lose yer shirt.

Which brings me to my topic for Strategy Thursday…

And this is something I learned when managing as much as $30,000 per month in AdWords spend…

And a lesson that has continued to serve me well in the years since.

In short, today’s lesson can be summed up as…

This upside-down funnel holds the secret to one of the most important advertising strategies I know.

This upside-down funnel holds the secret to one of the most important advertising strategies I know.

“Always start narrow, then go wide.”

Here’s what that means…

And let me go back to my AdWords days because I think this illustrates the point well (and I’m not deep enough into the Facebook advertising game that I have a similar parable yet)…

In that job where I was spending all that money on AdWords, I was selling IT training videos. That is, training for the folks who run businesses’ computer networks.

Because AdWords lets you show ads only to people who would type in a certain keyword, we got to choose who to target.

So, for example, the broadest targeting we might want to do would be for the words, “IT training.”

Get a little narrower, and you might advertise for “IT training videos” because that was the product being sold.

Narrower still, and you could target a specific manufacturer, as in “Cisco training videos.”

Narrower still, and you could target all the way down to the certification the person might be getting, with “Cisco CCNA training videos.”

Let’s play a game — let’s guess which of those would give you the best ROI…

If you said the most narrowly-targeted keyword, you’re right!

Someone who is searching for “Cisco CCNA training videos” can be taken directly to a page that offers Cisco CCNA training videos. And because the product and offer is such a close fit to what they’re searching for, there’s a high likelihood they’re going to buy.

But there’s a big problem.

Far fewer people search for a narrow topic like “Cisco CCNA training videos” than “IT training.”

Even the addition of “videos” to the keyword dramatically decreases the total potential audience. And it applies if you throw in the manufacturer’s keyword, too — there will consistently be more people searching for “Cisco training” versus “Cisco training videos.”

So it’s a trade-off.

You spend less to get a new customer with the narrow targeting. But there are less customers to get. Your ROI is higher. But your total potential customer base is lower.

What’s an ambitious advertiser to do?

Let’s go back to our summing up of the lesson… “Always start narrow, then go wide.”

In short, you should start your campaigns with the narrowest, most-specific targeting you can use.

(And this applied in AdWords, but it also applies in direct mail, Facebook advertising, or any other TARGETED advertising channel.)

With the narrowest targeting, prove you can be profitable.

Then, slowly back out, with wider and wider targeting.

Check your ROI… Are you still within acceptable bounds?

How wide can you get with this approach before you’re no longer hitting your target ROI?

(We’ve talked before about how to come up with a target ROI for getting new customers — and how most businesses actually aim too high and stunt their growth as a result… But that’s not our topic here so I better get back on track!)

The goal of each campaign should be to figure out how wide you can take it before the math no longer makes sense.

This is largely the opposite of what most rookie marketers default to…

Most marketers — folks who don’t know any better — default to the widest audience first… Blow a bunch of money… Then pull back and get straight with their targeting (if they’ve got any money left to spend on advertising, and they haven’t given up yet).

Most marketers do this backwards — they start wide, then go narrow.

Sharp marketers — and we can include you in this, after today — start by finding the narrowest, most-targeted audience… And making their marketing work there before they go out to a wider market.

Which brings me back around to my Facebook misadventures…

First, the caveat… These are EARLY results which are not very reliable at all. However…

Within the first 8 hours of putting up a Facebook campaign, I had an interesting divergence of results.

I’d created two campaigns.

One, hyper-targeted to a small group of a few thousand people who I can reasonably expect would recognize me, based on everything I’ve done in my career so far. Who are super-high-probability prospects for the opt-in offer I’m making in my advertising.

The other, still very targeted, but not nearly as narrow as this first group. One step away from the narrowest end of the market spectrum.

And within hours, my lesson was already playing out.

The narrowest targeting had scored me a 5%+ click rate on impressions. Meaning 1 in 20 people who saw the ad, clicked it. And already, a small handful of conversions at pennies on the dollar versus what my average email subscriber is worth to me.

This is a small universe, but could potentially deliver me ROIs in 40X-80X range. That’s not a typo. These leads could potentially be worth as much as $80 for every $1 I spend acquiring them.

Compare that to the slightly less-targeted campaign. I spent a similar amount. But my click rate was about 1% — 1 in 100 people, and 1/5th what the more targeted campaign got me over the same time period. And zero conversions so far.

Will this be profitable? Will it get me leads at an acceptable cost? I don’t know. What I do know though is I can reasonably expect that I’ll spend more and they’ll be harder to get than the more narrowly-targeted campaign.

So, I just redouble my efforts on the narrow targeting, right?

Here’s the problem. It’s not scalable. This is a tiny audience, relative to my total potential audience just on Facebook. Yes, there are huge ROIs to be had. But the total revenue pool is small.

Here’s the lesson I need to learn to move forward…

I need to do some testing and tweaking of this campaign with the super-high ROI to see if I can come up with a similar approach that works to the broader audience. And the next-broader audience from there. And the next. And the next.

This will allow me to tap into ever-greater pools of revenue. Albeit at a lower ROI. But as long as I’m acquiring customers at a reasonable price, and have a way to create profits on the back end, I will benefit from continuing this expansion.

This is how you start a small business profitably, and turn it into a profitable big business.

This is a lesson that could dramatically alter the face of the entrepreneurial landscape if 100% of new business owners suddenly knew it overnight.

Businesses doomed to failure would fail fast, at the lowest possible cost. The owner would target the most-likely customer, try to get their offer to work with acceptable economics, and failing that, would close shop and move to the next opportunity.

Businesses on the edge could serve their most rabid market segment at a profit. And realizing they didn’t have much opportunity beyond that, either rededicate themselves to a small, profitable business for true fans, or shut down while they’re ahead.

And businesses set to skyrocket could bootstrap their way to quick success, starting with meager capital, running high-ROI advertising early to feed profits back into the business, and as cash flow expanded, they could expand their growth accordingly.

In all scenarios, the business, its owners, and its financiers would be better off.

All as a result of knowing this simple sentence…

“Always start narrow, then go wide.”

Yours for bigger breakthroughs,

Roy Furr

Editor, Breakthrough Marketing Secrets