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Facebook has made it clear to businesses and marketers: If you want to get in front of their billion-and-a-half active users, you’ll have to pay to play. However, in return for your investment, Facebook offers a growing suite of tools to target your customers, create engaging ads, and track the success of your campaigns.

Are Facebook Ads Working?

Facebook offers many “ad types” to focus your investment on the specific action you want the audience to take. Until recently, these objectives centered around digital goals, such as “Liking” your page, engaging with a post, or visiting your website. Until recently, there wasn’t a great way to drive viewers directly to your local storefront. Small business owners complained that, while their social media efforts were generating buzz and their social networks were growing, the cash registers weren’t ringing.

Introducing “Local Awareness” Ads

In response to this complaint, Facebook announced a new ad type late last year, dubbing them “Local Awareness” ads. Now, for a fraction of a fraction of the cost of other forms of advertising for local businesses (newspaper, magazine and radio ads), the Local Awareness Ad aims to inject your business directly into the Newsfeeds of the people who are right in your neighborhood.

Here at Blink;Tech, we know Facebook ads like the backs of our hands.When this new ad type rolled onto the scene, we had to take it for a spin and see the the pros and cons for ourselves .

Meet Dynamic Fitness

Dynamic Fitness, a local Pilates studio, expressed a desire to convert virtual traffic to real traffic and jumped at the chance to be our test subject for Local Awareness Ads. Many of Dynamic Fitness’ clientele are members of Sarasota’s seasonal community, and a Local Awareness campaign seemed to suit the studio’s marketing goal to attract younger locals who stay in Sarasota year-round.

Blink;Tech helps Dynamic Fitness reach this goal through the regular publication of blog content shared to Facebook. The Dynamic Fitness blog aims to both serve the studio’s current clients and attract new Pilates students with fun, educational articles about the popular fitness method.

Having been in operation since 1994, Dynamic Fitness’ history sets it apart as being the first classical Pilates studio in Sarasota. Social media is an ideal venue for telling the Dynamic Fitness story. Here are some stats to frame a portrait of Dynamic Fitness, pre-Local Awareness:

– The Dynamic Fitness website sees 500-600 visits per month.
– With a combination of blogging and social media outreach across Facebook and other platforms, social traffic accounted for just under 33% of visits to the site in 2014.
– Social traffic consistently beats out a neck-and-neck race with organic search for the #1 contributor of monthly web sessions.

The Method
Here’s how we designed a Local Awareness campaign aimed at converting some of that web traffic into foot traffic through Dynamic Fitness’ front door:

– We planned our Local Awareness campaign to run for 30 days with a budget of $5/day.
– Drawing a 20-mile radius around Dynamic Fitness’ physical address, we targeted Facebook users in this area ages 18 and up who expressed an interest in “Fitness and wellness” or “Pilates.”
– Within this ad set, we created six ads promoting Dynamic Fitness’ status as “Sarasota’s original Pilates studio.” Our single option for a call-to-action (CTA) was “Get Directions,” and a click on the ad directed users to a map showing the studio’s location. Each ad tested a different image of happy clients working out at Dynamic Fitness.

A Couple of Obstacles

As we were developing these ads, we found two things about this ad type to be problematic.

Pricing: Facebook strictly limits your ability to control the pricing of Local Awareness ads. With other ad types, you can choose to pay per impression, pay per click, or opt for a variation on these choices. With Local Awareness ads you can only optimize your ads for one option: “daily unique reach,” which serves your ads to people in your target audience no more than once per day. You can choose to set the amount you want to pay per 1,000 impressions, or you can surrender the reins to Facebook and trust that they’ll do as they promise: “get the most reach in the location you’re targeting at the best price.” Normally at Blink;Tech, we prefer to be the ones who call the pricing shots. For the sake of the experiment, this time we let Facebook be in charge.
Destination: Web development is one of the main things we do at Blink;Tech. In the interest of building strong web presences for our clients, it’s important to us that Internet marketing initiatives build links and drive web traffic to our clients’ web sites. Local Awareness ads offer little incentive to visit a website; furthermore, they link by default to an advertiser’s Facebook page, not their site. With Facebook Ad Manager’s Power Editor, we were able to make the one rather inconspicuous link in this ad direct to the Dynamic Fitness website.

The Results

Drumroll, please. After spending 30 days and $149.96 on Local Awareness, here’s what we got in return:

65,761 local impressions, to the tune of $2.28 per 1,000 impressions.
15,810 Facebook users reached at a frequency of 4.16. This means that every user who saw a Local Awareness ad saw it (or another version) roughly four to five more times.
– The ads received a total of 143 clicks at a click-through rate of 0.217%. We would have loved to see a CTR of over 1%, but these ads’ primary objective was to be seen, not necessarily clicked.
– Socially speaking, the ads received 13 likes and 2 comments — rather low, by our standards — but they earned 64 visits to the website, which was considerably more than expected. One big disappointment: This ad campaign failed to win any new followers to the Dynamic Fitness page.

The Takeaway

Sized up against our tried-and-true method of content-centric advertising on Facebook, the Local Awareness ads’ performance was underwhelming: Clicks on ads were slashed in half. Web traffic and new users visiting the website fell by a little over 40% from the previous month. And the ads received only one third of the social engagement enjoyed on average by ads promoting blog posts.

However, this ad type still managed to wow us with its enormous capacity for reach and its impression value. The campaign reached fewer Facebook users overall, but it served them ads more often, resulting in a whopping 48% more impressions than the previous month!

Since our maiden voyage with Local Awareness, Facebook has already made changes (imagine that) to improve the ad type, adding a “Call Now” CTA option that lends these ads greater immediacy in their effort to convert impressions into action. Combined with the low cost per impression, laser-focused targeting, and in-depth reports that quantify reach and user action, the Local Awareness ad type blows its print predecessors out of the water.

How Can Local Awareness Work for You?

Tying social media advertising to a quantified return on investment — that’s the big nut that every top social media marketer is still trying to crack. Local Awareness makes it easy to convert large volumes of on-screen impressions to real-world business, but it’s not enough to simply blast your name out to every eyeball that’s looking.

First: target, target, target. Facebook allows you to build audiences for your ads with an array of demographic criteria that is so vast and descriptive it takes a marketer’s breath away. Think carefully about who your customer is, or who you want your customer to be, and invite those people to get to know you through Local Awareness.

Second: Make it actionable. For a small business, it’s not enough that a whole lot of people know your name — you need the cash register to ring! Try using a deal or special offer to draw people from Facebook straight to your shop. Indeed, special offers appear to be the ideal use of this ad type.

As we head back to the lab (Facebook now has a whole new Ad Manager interface to explore), we are eager to hear how Local Awareness makes a difference in your social media marketing strategy. We’re all in this together! Offer comments, ask questions, and get feedback from the Blink;Tech team on our Facebook Page.

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