How To Beat the Facebook Advertising Casino: Find An Affordable Audience

Growth and profit through segmentation. JL 

Daniel Gallant reports in the Wall Street Journal:

To remain successful against competitors in the Facebook advertising market, you need to wager more than they are willing to spend. Facebook customers are plentiful, and the ways to segment them are virtually infinite. The yawning gap between the numbers of social-media customers and social-media advertisers create opportunities to find profitable niches. Access to audiences that other marketers undervalue is remarkably affordable.
Revelations about pernicious advertising by Russian operatives, chicanery by Cambridge Analytica, and questionable sharing of user data have left many Americans skeptical about Facebook . But now that we recognize the potency of its promotional tools, organizations of all sizes need to do a better job of harnessing them.

Those who would benefit most from paid Facebook outreach—small businesses, nonprofits, artists and activists—are often wariest of using the platform. Microtargeting tools like those that made the Russian campaign ads effective can seem confusing to inexperienced users. The reluctance of these smaller players to embrace the platform means a windfall for the few institutions that do invest in targeted Facebook advertising campaigns.
The key to social-media influence is not having the deepest pockets or the best content. It is availing oneself of the discrepancy between the two billion Facebook users who absorb free content and the six million ad buyers who are willing to pay fees for their content to be prioritized.
Imagine Facebook as a continuous poker game with billions of players. The winners are not necessarily the players who have the best cards or the tallest stacks of chips. Rather, the players who come out ahead are the ones who exploit competitors’ hesitation by wagering more money on a hand than anyone else is willing to risk. A player who strategically bets $50 on a hand will tend to beat out competitors who are only wagering $5. Similarly, a marketer who strategically budgets $50 a week for an ad campaign can reach more customers than competitors who budget $5 for the same audience.
The cost of reaching audiences is low if few people bid on that access. When the majority of social-media users aren’t willing to pay anything to promote their content (even though Facebook ad revenue is soaring in aggregate), a $5 boost can go far. But only if it is targeted effectively. If I want my ads to reach vegetarian fans of bluegrass music in Abu Dhabi, Facebook can make it happen for cheap because so few other people are paying for the same privilege. Access to audiences that other marketers undervalue is remarkably affordable. But if everyone is willing to pay $5 to reach the same audience, my $5 boost won’t lead to much visibility.
As a particular audience becomes more desirable, and as marketers who covet that audience become savvier at social-media promotion, the cost of reaching that audience through Facebook increases. Consider the Nuyorican Poets Cafe, the nonprofit arts organization where I am executive director. Target audiences for our spoken-word events—youthful and diverse New Yorkers whose interests include slam poetry, open mics and hip hop—have become more expensive to engage through Facebook than they were when the cafe began its paid promotions a few years ago. Expenses have increased by about 20% as other marketers have focused promotions for cars, clothing and concerts on customers like ours.
In poker, as players raise and reraise, the cost of playing each hand grows. Similarly, to remain successful against aggressive competitors in the Facebook advertising market, you need to wager more than they are willing to spend.
Nonetheless, Facebook customers are plentiful, and the ways to segment them are virtually infinite. While poker tournaments have become significantly harder to win as recreational players’ skill levels have increased, the yawning gap between the numbers of social-media customers and social-media advertisers creates vast opportunities for marketers to find more profitable niches.
Arts Japan 2020, one of my marketing clients, is a campaign that promotes Japanese cultural programs in the United States. It saw its cost per engagement decrease significantly after it adjusted its Facebook ad targeting to focus on audiences whose interests included at least five manifestations of Japanese culture, such as woodblock prints, Ikebana or Kabuki.
Sculptor Karen LaMonte, another client, was able to engage Facebook audiences at a lower cost once she aimed her promoted posts at sculpture enthusiasts with relevant jobs (at museums or art schools) or habits (arts-focused subscriptions or ticket purchases). The key is to forgo broad audiences for more-affordable groups that other marketers aren’t paying for.
Americans should be concerned that Facebook’s marketing resources have been used for divisive ends. But businesses, nonprofits and individuals can profit from Facebook if they make shrewd, responsible and strategic use of its advertising tools.