How Long Does It Take To Succeed With Facebook Ads?

0:00hi guys is Ben Heath from lead guru in in this video I'm gonna answer a very very important question and that's how long does it take to succeed with Facebook Ads now this is something there's probably the biggest or one of the biggest mistakes that I see Facebook advertisers make is they underestimate and they and they make assumptions that are completely wrong around how long it takes to succeed with Facebook ads and I think that leaves a lot of people to making incorrect assumptions making incorrect assessments making incorrect adjustments to their campaigns I'm really jeopardizing the long-term profitability and viability of their Facebook advertising so I'm gonna go

0:36through some stuff in this video then I think you're gonna find very very interesting particularly if your facebook ad campaigns aren't working yet perhaps you're fairly new to it I think this is gonna really help set the record straight for you now before I get into this and get into the steps just want to quickly mention I just wanna quickly ask sorry that you smash a like on this video that'd be very much appreciated really helps me out only takes a second and of course subscribe to my youtube channel if you are new turn on the lemon over cake notifications when you do so you're notified when I release a new

1:02facebook advertising related content okay now you've done that for me much appreciate thank you for doing that and let's get into this now okay so I've done is I've just put up a very simple spreadsheet I've got some columns here and I'm just gonna have a look at this over you know four month period let's see 16 weeks we might add on and go a little bit longer and we've got a few different concepts let's quickly explain what I'm gonna be talking about here so we've got a spend fairly self-explanatory initial revenue so what I'm talking about is the first transaction that you have with the customer and we've got

1:36recurring revenue I mean this could be in the form of a subscription but it could also be and you know someone purchasing something and a later date something like that so you know don't just think you know recurring subscription but it's basically money you generate from a customer that's not part of the initial transaction and then we've got row s which return stands for return on adspend so you know we spent X amount we got X amount what you know we spend X amount we've got Y amount back what's our return on adspend what's a return on that investment so I'm gonna go through this now what I'm assuming

2:04with this setup here is that you are a relatively skilled Facebook advertiser now when they talk about you know how long it takes to succeed weird Facebook as a facebook advertising if you don't know what you're doing yet it's obvious gonna be longer for you than it is for someone who doesn't know what they're doing so I strongly recommend that you educate yourself and have a bit of practice things like that and gets the point where you feel like okay I'm fairly competent at this now I know how to create solid campaigns but actually watch load of my videos perhaps you've bought my course and you know

2:31exactly how to do things properly okay so that's I'm assuming that's where you're at already once you are here it's very rare that you launch a Facebook ad campaign and day one it is amazingly profitable it does happen and we do it for our clients but that is by no means the norm and it's not what you should expect and it's also not necessary to having success with Facebook advertising a Facebook ad campaign does not need to work really well from day one okay so let's take a look at this so let's go through and say we start with a $20 a day campaign so in week one

3:07we spend $140 let's say that the initial revenue from that is $100 that's what we generated in sales zero recurring revenue because people you know they've bought once and they're not gonna buy again therefore our o us have it entered in the formula there is that Plus that I probably need brackets in here you can see let me get rid of that you can see I do not have the best Excel skills but they they will suffice and they divide by ad spend okay so I ROA ass is not 0.71 with a holiday thing is let's limit that down to just two decimal places it's not 0.71 so we spent

3:47$140 on tires we generated 100 in revenue that is lost making that's not good panic panic panic let's go ahead and pause the campaigns turn them off etc know if I launch campaign like this I am not too concerned that that is the case week one there's a whole bunch of reasons for that so let's let's sort of start going through them a it's very rare that when you first launch campaign you've nailed all the elements of it you haven't got the targeting perfect you haven't got the ad creative that really sort of sings to your target marketing really gets to take action these are things you're gonna have to create new

4:21versions of and workout so even if even without some of the stuff I'm gonna get into in detail you probably going to see a significant movement in campaign performance just based on being able to optimize those various elements okay that's number one but aside from that because that stuff that's already known in this talked about in terms of campaign optimization and all these sorts of things but you know aside from that element and of course Facebook optimizing the campaign as well which is very significant there's almost don't consumer behavior and just understanding the maths so let's say for example that the average person needs to see a product or service

4:55four times you need to see your product or service four times before they're ready to buy it on average some will buy after seeing it once someone need to see it ten times but the average is four right and this is gonna vary by the way between different products and services some you know easy to purchase things might be once or twice some might be twenty times if it's a you know a car for example if someone needs to see something four times you may have spent in week one a whole load of money on people that have seen an ad once twice and they just

5:27haven't seen it four times yet and that is massively significant okay because you've already spent some of the money required to turn that person into customer to generate revenue but obviously that's only showing up in the ad spend column not in the revenue column yet so if you're looking at your results right now you know you run a week just at the end of week one you've got ad spend and then you've got revenue these two numbers aren't you know then they're not representative because you've spent some money that you haven't yet generator the return on that money okay so that's the first thing do they

6:00can see it a bunch of times and perhaps a whole lot of people have seen it a couple of times but just not enough yet they say two out of four times and a lot of people will hear over the subsequent week the other thing to factor in is that how long after someone interacts with an ad do they purchase on average you know sometimes even ecommerce businesses that all say things like I'm asking to so many you commerce business owners and I say things like Oh everyone purchases that the same day that they see an ad that is absolutely not true in most ecommerce businesses you're going

6:28to generate perhaps 50% of your purchases are from people that see an ad and then purchase within 24 hours but the other 50% are going to come from people that purchase more than 24 hours after they've seen a nap so they might see an ad on Monday and purchase on Thursday perhaps they were busy on Monday perhaps they wanted to check with someone else whether they thought that was a good product or that perhaps they want to do a bit of product research into your competitors all sorts of things get in the way of their purchasing immediately it's not how people work in the real world times

6:56required to get into that person point but let's say you know on average it's 3 or 4 days later you know if you assess results after week 1 and the average person or 50 percent of the people that buy purchased more than let's say 48 hours after they've interacted with an ad you've also spent money already on people that are going to buy they just haven't bought yet so you've incurred the cost but you haven't generated the results for it and the only thing that's gonna that's required to get you those results it's just time you just got to give it a bit more time so that's also why during let's say week

7:311 you can see a negative rail house or you know not a negative row s but a row X that is less than one so is unprofitable and because you know a whole bunch of people buy three days after they've seen an ad which is perfectly reasonable you just haven't seen the revenue yet and whenever you're running an ad campaign you need to be aware that this is how this works you incur the cost of advertising putting that ad in front of your customers immediately and you can see in your Facebook ad account in real time how much you've spent and that can be stressful for some people believes would

8:04make bad decisions but you can see it immediately day one I've got that spend hour one minute one even I've got that spending my ad account but the revenue that that that ad might then generate later down the line may not be seen until tomorrow or next week or a month later I mean I've given a three day example for an e-commerce client you might have a service based business but you're not going to generate clients for a month to three months after someone's advertised to the happens all the time when especially with complex contracts and larger value projects okay so you really need to give things a lot more

8:36time and don't worry if it's not profitable after week week one now if we didn't run I'm gonna give you a few examples it if we didn't run anymore as I say we switched our prior campaign and just enjoyed what came through from this campaign we might see another 60 dollars comes through on week two you know nomads spend the $6 comfy on week two and perhaps we get you know a little bit of recurring and then perhaps on week three we get a little bit more somebody saw an ad during this week because they wait two weeks to buy and perhaps there's a little bit more

9:08recurring again and then perhaps is a tiny little bit more occurring and Endor cesarean okay if you add all that up all that revenue there can be attributed to this week's ad spend it just hasn't come through yet it's just as simple as that and actually if you've run hush the historic campaigns in facebook that let's say you know a few months old they were turned off go back and have a look at them now I've done this so many times where we've run a campaign let's say we were advertising for a client and they need a row ass that's above a three to be profitable all right and we might run

9:40a campaign and it's you know sitting it like 2.6 2.7 we're like it's not quite working let's turn this off and then let's go and create a whole bunch of new stuff and and test that but if you check that in three months time for a lot of businesses that same campaign that was turned off three months ago that generates of 2.6 that's where ice when you were looking at it in real time you can go back in three months time and take a look and say oh the rest of that campaign is now a 3.2 because of once you turn that campaign off the cost stop there but the revenue

10:08carried on so you generated a whole bunch of new sales for the next let's say week two weeks month after the campaign's been been been paused and that is so so so important so really factored that in you can see that this whereas now my spreadsheet won't work it out for us but what do we got there another 35 we basically doubled you know we've gone from a hundred to one hundred ninety five dollars on that first week's spend which takes us from you know not 0.72 if we just added that up in there 295 and got rid of these because that's what these are the revenue numbers total

10:42to a 1.3 for rise okay still might not be good enough for you but you can see that's a huge difference between those two numbers right okay so there's just so many factors that go into this I really want to pass them out so what do we got already we've got the fact that something will buy a number of days or weeks or months after they've seen an ad right you need to factor that in we've got the fact that some people need to pour ad impressions multiple exposures to be ready to buy perhaps they're not going to buy after they see it once they're gonna buy after they've

11:11seen it eight times this will depend on your product and service and as a rule of thumb by the way guys with all these things lengthen the timeframe and if you have a higher value product or service and looks more expensive you know people do not buy houses on the same day that they see an ad for them that process takes months sometimes years okay because it's a house it's a huge decision you can short the timeframe if you're selling a ten dollar product twenty dollar product cuz people can just make the decision by easily don't have to worry about it okay so just keep that in mind

11:40right so let's say that and let's say we keep the ad spend at one hundred and forty twenty dollars a day now let's say we've made a couple of adjustments to our campaign Facebook's learnt a bit so from the same 140 exactly the same we've generated this time instead one hundred thirty dollars right okay we're gonna have you better dollars now we also need to add in the fact that there are some people that were advertised to in this week that will purchase in this week you then deduct the people that are advertised to in this week they're gonna purchase in this week okay so that's roughly going to wash its face

12:15usually going to be slightly positive so let's just take us up to 140 something on this side okay now let's say we've got month two we're starting to kick out some nice recurring revenue so let's say out of you know they say that's ten people that bought a ten dollar product and this again will very much lead between businesses but let's say you've got twenty percent reorder rate good another twenty dollars okay and now our last number in week two has already gone up to one point one four let's say we've got week three same ad spend we've improved the campaign we've now got two weeks worth extra coming into here not

12:49just the one week so now we're up to let's say one hundred and ninety we've got significantly more recurring revenue as well because we're starting to build a customer base and in week three we're looking at a 1.71 perhaps we get to the point now where ad for Steve's aperitif starts to set in so the initial revenue isn't quite as strong as you want it to be even we've got carryover weeks and it goes down to something like 150 okay but we're still when you know we're building a customer base here you well if it is $10 a thing what we got there 14 19 that's a 33 plus 10 that's

13:2443 extra customers we're getting some nice repeat purchases from perhaps this has now gone up to you know $90 something like that okay so even though an fatigue is set in and our campaigns not performing quite as well on the front end we still got the same Rojas because we're now building a customer base that are buying from us again and we're having people that have been advertised to sinking perhaps now we go in and we go ahead and change up the campaigns and we create new ads and all that sort of stuff right and now really gets a nice boost we go up to you know to 60 and we

13:55continuing to build that recurring revenue that's got up to 120 now our warehouse is a two point seven one okay we have changed our ad spend we've made so Justin sort of campaign and we're building a customer base right we're really happy with that so they say we scale up our ad spend let's say we've done it okay and let's say the ratio stays roughly the same maybe slightly less that's gone up to 500 and this is now trickling up slightly to about 150 where ice has gone down slightly but we're still at much higher s and we're generating a much higher profit number because of course a 2.3 - well nice on a

14:33200 acres of ad spend it's better than it it's gonna be more money in real terms than a 2.71 on a 140 in fact you know what let's just show that because if for those are you not very numbers oriented that might be a little bit confusing so if we just do bless that - that so we're losing $40 a month one and you can see how much profit we're making from then on right you see what I'm saying there by 2.3 - whereas on 280 dollars equals 270 whereas a two point seven one which is a higher row ass owned equals 240 140 okay we stay at the

15:15same level now and perhaps we see slight improvements because we're making you know we're still only seven weeks into a campaign slight improvements we're making adjustments to our campaign fantastic recurring revenue perhaps it's just sort of stabilizing a little bit now we're not and continuing to increase the recurring revenue because we and you know I dunno just a certain amount of drop-off so let's say for example if certain amount people from that month are gonna buy a month in week 2 sorry week 3 week 4 perhaps they're done or starting to churn and drop off by week 7 you know I'm trying to give you a

15:49example numbers here to demonstrate how this works okay perhaps let's say we stay at 280 for another I know three or four weeks and let's say we stay consistent we stay consistent and then we start to see a bit of amputee and we start to see some drop-off right and then because we're still doing a customer base our recurring revenue is taking up slightly and then we see a bit of a drop-off here let's say it just stays the same so you can see we've increasing profitability there and then it's gone back down I don't want to show you this goes up and up and up because it doesn't these

16:21things change now week twelve we've been working on a brand new product we have acquired fact let's work it out so if we do some of this let's say it's ten dollars revenue per customer right divided by ten we've generated 400 new customers 400 new customers and we're about to launch a new product a higher value product okay we're gonna keep our ad spend the same and this could be a service this could be a different way of doing things this could be a finance option for your service so the auto something something new you can go back to your old people and really advertise to them and perhaps so

17:01many of them you can spending a significant proportion of your ad spend you know only of $40 a day here significant proportion of your ad spend on retargeting and instead of generating 480 you generate 860 it just jumps up massively this is not unrealistic in the slightest this happens all the time because we're building a customer base and it's gonna get it's so much cheaper to get those 400 people to buy something else buy from us again with the same map ad spend and let's say our recurring goes up big-time as well now you're up over a 4 X 4 hours now maybe you needed a three plus row ass for this campaign

17:38to be really really profitable for you work really well well you can see that it took us 12 weeks it took us 12 weeks with this aspect now yes you could probably speed up that process secondly if you're willing to spend more but I'm you know assuming you're operating with with lower budgets here but maybe it takes 12 weeks and and that is the whole point of this video then recording right now maybe it's gonna take your campaign 12 weeks before you've built up the customer base before you've advertised for enough people in your market for you to see a very nicely profitable robots but here's the thing

18:05if you're not willing to go through the initial 12 weeks you can miss out massively massively because from 12 week on Wynette's say we keep it you know the same this new products still crushing we cook building recurring revenue really nicely we're making thousand dollars a week making $1,000 a week great so no reason why there's a spent least 8 to 80 you jump that up to 500 and you're still generating a really good return your recurring z' going up nicely and yes of course as you scaled your I went from a four point five seven to three point nine two but the numbers are going up

18:41and up and up and you can reach the point where you know you maybe you stay at that for a few weeks it cetera cetera but you can reach 16 weeks it's not a long time and it feels like it particularly just can start it's not a long time we've run campaigns where we start by spending five thousand dollars a month and we end up spending a hundred and twenty thousand dollars a month and you know if at five thousand dollars a month the company is generating let's say a 20 thousand dollar return a Forex row ass of which you know they say they've got good margins they make a 50%

19:11gross margin and and so once you do duck ad spend they're generating a 5,000 dollar gross profit so spending 5000 on ads 20,000 revenue $5,000 gross profit but if you take that 5,000 and go up to 150,000 a month in ad spend and you keep those numbers the same you are now generating a hundred and fifty thousand dollars a month instead of five thousand so the if you're not willing to go through this pain here to build the customers those first few till 12 weeks you could miss out on the $200,000 a month a million dollar a month business because you didn't get this going in the

19:47first place and then what's so cool about this is let's say you know something happened to your business you hit really lean time and you decide you know what we really need to cut our ad spend for a month means cut around spend this number is not gonna go down to zero that might stay at let's say 700 because as I said you've got all these people you've advertised to hundreds of thousands by this point you've advertised to that is still gonna keep purchasing and this is going to drop off to zero either as it goes down a little bit you know and that can't work out this is zero but you can

20:18see the return on adspend is phenomenal because you've spent nothing you generated over a thousand dollars that's all profit and then perhaps the next month you get a bit more of a drop off so you go you know 550 and this goes down to 260 different businesses will change differently but all these numbers are really improving the lifetime return on adspend and the profitability of your Facebook ad campaign so in general you need to give your facebook ads longer than people think it takes longer to succeed with Facebook advertising than most people think and that's what I really want to get across with this video and with these numbers and

20:52hopefully this helps explain things for those of you that aren't as sort of a you know mathematical and don't think about these things in terms of numbers we will have things we're good at we're not good at I'm terrible at design and creative and things like that this is somewhere where I feel much more comfortable so hopefully I can share this and you can really understand it can help improve what it is that you are looking to do but this understanding this is massive there's so many businesses that I've see turn on Facebook Occupation you go ah you could be spending over a million dollars a

21:20year in a Facebook ad campaigns generating three or four if you just kept going you just need to keep going until you build the customer base once you have that customer base it's just a bit enormous I mean my business for example what not when we run Facebook Ads generate clients our ad spend now is not zero because we experiment but in terms of lead acquisition it is zero we don't spend any money on generating leads for our Facebook ads agency we don't need to we've spent we started spending five years ago and we spend tens of thousands of pounds on building an email list building an audience

21:54generating customers so that but we're at the point where we've got all this recurring revenue coming in and include initial and recurring revenue because obviously that's how we work with clients they sign up and then they carry on paying us as I'm work with us that is coming in from audiences we built customer bases that we built years ago so you just have to be willing to go through this and that's why you know the modern trend of venture backed businesses and all that stuff is so strong because they have the pockets the investment potential to be able to run up massive customer bases even at a

22:31lot much more aggressively than the numbers you're showing here and then of course they've got this enormous customer base that they can use to generate a lot of revenue from you don't have to do that and you may not have access to find things I never did and that's not how I built my business I did it probably how you guys are going to do where you know you generate a bit of revenue you reinvest you generate revenue you reinvest I think the first year of running my Facebook Ads agency half of the revenue I generated was put back into Facebook Ads to build my audience and which is a significant

22:57proportion at the time so I want to highlight that because if you need to go 12 weeks where it's not quite working out to get it really profitable do it it's worth it now of course there's a difference between knowing that this is gonna come good and something just not working so how would I work that out I've assumed here the business needs to have a 3x whereas if after four weeks my robot wasn't improving or it was down you know let's say less than a1 or something like that this is not probably salvageable you need to go back to the drawing board and make some real

23:37adjustments whether that's to the campaign or the products and services being offered so there is a difference and obviously with experience you get to understand what that is but that is an important concept to be aware of it doesn't just mean yeah just throwing money in a Facebook ad campaign and eventually it become good that is not what I'm saying I'm saying if you're seeing an improvement in results here like this ah just be aware that if in month one you're looking at your numbers going those aren't as good as they need to be that's not the end of the world it can come around and you could have a very

24:03very successful profitable Facebook ad campaign that can change your business right talked about that before you go couple of things I want to quickly talk about the first is our Facebook advertising services so if you're spending more than 3k per month on Facebook ads or want to spend 1/3 quedan per month on Facebook ads that's the starting point to work with us I'd love to have a chat to you about our services how we can help you and generate better results through Facebook ad campaigns and all that sort of stuff so if you are interested we need to do is click on the link in the video

24:30description that will go through to a page on our website where you will be able to book a free 30-minute call with me we can discuss the details no-obligation very informal the second thing is a free webinar I've created called three killer Facebook advertising strategies to double or more your revenue now it's strongly strongly recommend that if you want better results on Facebook advertising you go through this webinar completely free and link is in the video description and in this webinar I really break down the sales funnels that we use as a Facebook advertising agency to generate fantastic results for our clients all three sales funnels are very much tried and tested

25:04they perform very very well and in the webinar we also explained look if you've got this type of business you need to use this webinar and if you've got this type of business you need to use sorry not this webinar if you work this type of business you need to use this sales funnel and if you've got this type of business you need to use this sales funnel because there's no such thing as a one-size-fits-all when it comes to Facebook advertising even though a lot of people teach it I don't because I own a Facebook Ads agency and I know what works and doesn't work from reel in

25:28account stuff right so that's what this webinar is all about completely free 70 minutes long you'll be very very happy you watched it I can basically guarantee it so I'm a strongly recommend you do that if you enjoy this video please give it a like please smash that like button that'd be really really appreciated and help me out please comment below to let me know comment below if you've got any questions and of course don't forget to subscribe to my youtube channel so you are notified when I release a new Facebook advertising related videos and I will talk to you guys soon thanks a lot bye for now