How Facebook Lead Ads impacted email signup rates and lead quality
NextAfter
Experiment Summary
Timeframe: 11/29/2022 - 12/06/2022
Since the iOS 14.5 software update (among other things) we have noticed a continuous increase in the cost to acquire a new subscriber within our acquisition campaigns here at NextAfter from Facebook advertising.
In an effort to continuously test ways to decrease the cost per lead metric for our own advertising and marketing campaigns, we wanted to experiment with trying the Facebook Lead Ad campaign type.
In previous tests (many years ago), we observed that the quality of the leads generated was far inferior to those collected from the more “recommended” experience of promoting ad clicks to a hosted landing page, making the case as to why someone should download the offered resource.
As a part of this experiment, we used the same resource as the offer, locking the creative used within the ad, targeting the same audience, but the treatment used a “Facebook Lead Ad” conversion point, as opposed to taking ad clicks from Facebook itself to our hosted landing page to secure the email address.
We were curious as to whether this treatment could not only lower the cost per new subscriber but also whether or not the “lead quality” would be negatively impacted, as well.
It’s worth noting that (at least for us) a quality lead is someone who we can tell (either through the information provided directly, or through a quick Google search for those leads) whether or not they were confirmed to work for a nonprofit organization, at least in the marketing or fundraising teams.
Research Question
We believe that using the Facebook Lead Ad campaign type for lead campaigns targeting net-new prospect audiences will achieve an increase lead volume at a lower cost.
Design
Results
| Treatment Name | Conv. Rate | Relative Difference | Confidence | |
|---|---|---|---|---|
| C: | Control - Ad Click to a Hosted Landing Page/Form | 0.34% | ||
| T1: | Treatment - Facebook Lead Ad Experience | 0.79% | 131.5% | 100.0% |
This experiment has a required sample size of 1,923 in order to be valid. Since the experiment had a total sample size of 58,260, and the level of confidence is above 95% the experiment results are valid.
Flux Metrics Affected
The Flux Metrics analyze the three primary metrics that affect revenue (traffic, conversion rate, and average gift). This experiment produced the following results:
0% increase in traffic
× 131.5% increase in conversion rate
× 0% increase in average gift
Key Learnings
With a 99% level of confidence, we observed an increase in email signup rates of +131.5% through the Facebook Lead Ad treatment campaign experience.
We also observed:
- A valid increase in ad clickthrough rate by +24.3% (LoC: 99.1%), and
- That the CPM (cost per one thousand impressions) also decreased by -35.8%, as well.
Overall, this treatment experience decreased our cost per lead by a whopping -72.3%!
But, the real question is: Did we just create a bunch of “junk leads” by using the Facebook Lead Ad campaign?
To determine this, we researched the lead using the data provided on the form submission to see whether or not the person requesting the resource was working at a charitable organization within the marketing or development/fundraising groups, or as a decision-maker within the organization’s executive team.
Of the leads generated by experience type, here is what we found:
- 61.6% of the Control experience leads were determined to be “qualified.”
- 46.2% of the Treatment experience leads were determined to be “qualified.”
So, the claim that the Facebook Lead Ads would produce a lower quality is true — but, from a certain point of view.
The truth of the matter is that although we generated a lower percentage of “qualified leads” from the overall amount of leads generated, the cost per “qualified lead” was actually decreased by -63% when compared to the control experience.
In fact, the cost per qualified lead from the Treatment experience was even -40% less expensive when compared to the total cost per lead from the Control experience.
There are two more observations that we made, as well…
- When someone completes the Facebook Lead Ad form, the form itself offers marketers with the opportunity to offer one more thing to the person who just submitted the form. It’s worth noting that when we promoted a site-hosted webinar recording that was relevant to the offer used within the experiment, we observed that 64% of the leads generated in the Treatment experience also chose to click the button (to go to our website/watch the webinar offered). And,
- Facebook Ads Manager’s web interface is notoriously bad at properly tracking/reporting accurately under the Control experience type of campaign, however, we noted that the Treatment version of the campaign had 100% accuracy in reporting leads generated, cost per lead, etc.
When it’s all said and done — here is what we found:
- Facebook Lead Ads will very likely decrease your cost per lead/subscriber.
- But, as you scale up the number of leads, you’ll lose a bit on the percentage of those leads being of “high quality.”
- Regardless of that fact, it’s worth using this approach because you get so many more leads (and an overall higher volume of “qualified leads” as a part of the higher total of leads overall) with this approach.
So, what comes next? We’ll plan to circle back to the leads generated in this study and look at two more data points downstream, which are:
- The percentage of leads who opt-out by the end of the new subscriber welcome series. And also,
- The percentage of leads who opt-out, are disengaged, and/or who have never opened a single email 60-days after securing the lead.
More on those studies soon, but for now — it’s advised that you consider using Facebook Lead Ads in this post-iOS 14.5 world of continuously decreasing performance in Facebook Advertising to drive net-new subscriber growth for your organization and marketing campaigns.