NextAfter
How more focused offers increase your lead quality in acquisition campaigns
Experiment ID: #124995
NextAfter
Experiment Summary
Timeframe: 01/01/2023 - 01/31/2023
As a part of recent experimentation with using Facebook Lead Ad forms in our own acquisition efforts, we observed a substantial decrease in the cost per lead, without decreasing the disengagement and unsubscribe rates of the leads generated.
But, with this much higher volume, we received a substantial number of personal email addresses, which made it difficult to understand whether or not we were actually generating leads from our prime audience (fundraising professionals and/or marketers at nonprofit organizations that raise a certain number of dollars per year).
Our hypothesis was that the offer used in December of 2022 and previous experiments could have more “generic appeal” to any marketer (not just those who work at nonprofit organizations).
We also wondered whether Facebook advertising is the best platform for acquiring leads in general, as well as qualified leads tied to qualified nonprofit organizations.
Therefore, we ran a month-long experiment testing two offers that are more specific to nonprofit organizations across both Facebook (using the lead ads conversion type), while also trying those same (more specific) offers on LinkedIn advertising (using their lead ad equivalent).
Our goal was to compare the results acquired during this experiment time period against the results collected during the previous month’s experiment with Facebook Lead Ads with an offer that would (theoretically) have more generic appeal.
We had four metrics in mind to determine success of this treatment type, which are:
- Cost per lead (of any type)
- % of leads generated that have a “generic domain” (something like: “@gmail.com” as opposed to a work email address)
- % of leads generated that are tied to a “qualified nonprofit organization”
- Cost per qualified lead generated
Research Question
We believe that using offers that do a better job of prequalifying my audience for acquisition campaigns will achieve a higher number of “qualified leads” (and a lower cost per qualified lead) because we believe the offer itself plays an important role in pre-qualifying the audience.
Design
C: Facebook Lead Ads w/Facebook Ad Template Offer
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T1: Facebook Lead Ads w/better qualifying offers
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Results
This experiment has a required sample size of 20 in order to be valid. Since the experiment had a total sample size of 2,859, 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
× 200.9% increase in conversion rate
× 0% increase in average gift
Key Learnings
As it turns out, the offers used to better qualify the audience indeed increased the number of qualified leads generated through our acquisition efforts during the duration of this experiment.
In fact, both platforms substantially increased the number of qualified leads generated for our advertising dollar spent. But, the question really is: “By how much?“
We observed that the “better quality offer” treatments across both platforms decreased the cost per qualified lead in the following way:
- Facebook: -82.9%
- LinkedIn: -19.8%
Key Takeaway: So, not only did we increased the volume of qualified leads, we did so by dropping the cost per qualified lead by significant amounts.
Cost per lead trends compared in this way:
- Facebook: -48.4%
- Linked: +1,182%
Key Takeaway: While running the “better quality offers” on Facebook, we actually decreased our cost per lead overall, but the cost per lead (of any type) generated on LinkedIn increased substantially. Therefore, at least in the way the LinkedIn ad campaigns were set up during this experiment period of time, we would not suggest shifting advertising budgets toward LinkedIn to replace Facebook lead generation campaigns.
Finally, our last measurement was to review the % of leads generated with a “generic email domain” — here is how the treatments performed against the control campaigns:
- Facebook: -23.9%
- LinkedIn: -12.9%
Key Takeaway: The “better quality offers” indeed decreased the volume of leads generated with a “generic email domain,” as well.
Summary of Findings:
There are actually three key takeaways that we have from this experiment, which are:
- The relevance of your offer to your ideal customer/audience is a key factor for increasing both your campaign’s response rates overall, but also can attract better quality leads, as well. If your campaigns aren’t specific enough to your ideal audience, consider developing new, more relevant offers that can prequalify the audience at the ad impression level.
- Facebook Lead Ads continues to perform well, as we observed improvements in all success metrics using that tactic.
- LinkedIn Ads cost (at least in the campaign settings we used) are tremendously more expensive when compared to Facebook Lead Ads, and although we observed higher rates in which that platform produced “better qualified leads,” the cost to produce any lead at all on that platform leads us to conclude that we should not shift large amounts of our advertising budget to that platform for net-new lead acquisition efforts.