This growth guest post comes from Massimo Chieruzzi, CEO of AdEspresso, a SaaS company that helps advertisers and media agencies create, analyze, and optimize their Facebook ads. AdEspresso was an Accelerator Batch 7 startup, is now part of the 500 Startups portfolio of companies. 

Startup growth is both tough and exciting with so many options available to marketers nowadays: inbound, social marketing, content marketing, SEM, SEO, social advertising, retargeting and more.

But let’s say you’re on a tight budget and you’ve got a lonely marketing team of one — yourself.

Experimenting with all of these channels with limited resources can be tricky. Mastering them to achieve a great ROI can be even harder.

In this short guide, we’ll go through all the best practices we’ve learned while promoting AdEspresso and helping our users succeed in Facebook Advertising.

More specifically we’ll talk about Facebook Custom Audiences, one of the most effective way to create advertising campaigns with a laser-focused targeting.

A quick introduction to Facebook Custom Audiences

Before we start let’s review all the types of Facebook Audiences and what they’re meant for:

Data File Custom Audience: The original and most used. You simply upload to Facebook a CSV file containing emails, Facebook User IDs, phone number or mobile IDs of your users. Facebook will try to match the data in your file with profiles in its user base and you’ll get back a “Custom Audience” that you can use for targeting your ads.

Lookalike Audience: Once you’ve created your first Custom Audience you can create a Lookalike Audience from it. Facebook will analyze the users you provide, look for common patterns and similarities, and then return you a new Audience with people similar to your users, in the country market that you specify.

Custom Audience from your Website: This is basically retargeting. To use this feature, you’ll first have to insert a tracking pixel on your website. You’ll then be able to create targeted audiences based on the pages a user has viewed on your site. By the way, this option is very effective and doesn’t require knowing users’ emails.

Custom Audience from your Mobile App: This is similar to building a Custom Audience from your site, but is specifically designed for mobile app developers. You’ll be able to target users based on their behaviors within your App.

(By the way, if you haven’t tried these yet, you can download this free eBook on Custom Audiences that we made at AdEspresso that covers all the basics of getting set up.)

Why is Interest targeting not enough ?

Marketers are always looking for shortcuts to growth. Along the way, they often do more harm than good. Growing the number of Likes of a Facebook Pages is one of those areas where this has happened.

Obsessed by the number of Likes on their Facebook Pages, many marketers haven’t been able to resist the temptation to get huge numbers of Likes for pennies from shady companies. These marketers have purchased hundreds of thousands of fans for few dollars, filling their Pages with crappy users (or bots) that had no real engagement or intention to become customers.

This is not only their problem, it’s ours too. Targeting those Pages as interests on Facebook Ads means you’re spending money to advertise to crappy users / bots.

Of course precise interest targeting is not dead yet and can actually deliver very good performances. However, it’s less effective than it used to be.

These factors combine to make Interest targeting a less appealing option, which is why we’re here talking about Custom Audiences!

Ok let’s see what Facebook Ads + Custom Audiences can do for your startup!

1) Sometimes it’s about NOT targeting

Most people think of Custom Audiences as a way to target people with ads, but it’s so much more. Custom Audiences can also be used to exclude someone from targeting… and it can be just as powerful as the other way around.

For example if you’re a SaaS business there’s likely little ad ROI you can get from people who are already subscribed to your service.

A good strategy can be to target a broad range of people with precise interests and then use Custom Audiences to exclude users who are already active subscribers, helping you save money and be less annoying to your converted customers.

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2) Target your LinkedIn network to easily find early adopters

As a startup founder, you have a large, pre-targeted, LinkedIn network (I hope!). Chances are they’re in your same market and could potentially benefit from your product.

When you are in the early stages of building your company, targeting your Linkedin contacts through Facebook Ads can be extremely effective. After all, they already know and trust you, and likely have a high interest in what you’re doing.

On certain experiments we ran, we managed to achieve a 6x ROI improvement by targeting LinkedIn contacts.

It’s extremely simple — here’s how to do it. Just export your Linkedin contacts’ emailsand create a Custom Audience.

Remember, they know you! Make the ad’s creative personal, try to insert your name in it or even use your picture. Don’t consider it as advertising but rather a quick, personal update to your network on what you’re up to (and trust me, people want to know — that’s why there’s LinkedIn-stalking).

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3) Grow your user base by targeting similarities

Ok, by now you know that Custom Audiences are great but there’s one caveat that should be obvious: they only allow you to target users you already know. In that sense, they’re not good for expanding your reach. That’s where Lookalike Audiences comes in.

Once you have a decent amount of users (some thousands), create a Custom Audience with them and then generate a Lookalike Audience out of it for each the top countries you support.

When creating the Lookalike Audience, optimize for similarity; you want to be sure you’re targeting users as similar as possible to your customers.

This can be a very effective and simple alternative to targeting with precise interests.

4) Re-activate old users

At AdEspresso we started our list building effort very early: Private beta access, Beta Signup, tons of business cards at events and so on.

Honestly we lost most of those users along the way. They simply joined too early — our product wasn’t good enough yet and was still missing most of the cool features we have now.

But, if those users were interested in AdEspresso back in our early days, then chances are they might still be (even more) interested today. They’ve just forgotten about us.

If you’re in a similar situation, use Custom Audiences to get those users back for another try.

Just remember, they already know you. So when it comes to the Ads’ creative, you can be more personal and emphasize your brand, which they may recognize. Use this as a chance to tell them how much better you’ve become since they last checked in.

The same tactic can be used in many other ways. For example you could target users that installed your mobile app but never used it. You could promote training articles for your products to newly registered users to have them reach the “Aha moment,” and so on.

5) Retargeting potential customers

A lot of potential customers visit your website every day. Yet for most of them you don’t have an email address or Facebook User Id to use in a Custom Audience.

This is where “Audiences from your website” comes in. Audiences from your website is basically a retargeting tool, and one that can bring you some very impressive conversion rates.

You want to retarget just the most relevant users. To do this, you should target everyone that visited a key page of your website — like the pricing page for a SaaS business or the cart page if you’re an eCommerce business — but did not complete the subscription or purchase.

If you have many product categories, it would also be wise to create multiple Audiences from your website to differentiate which kind of products they were interested in and target them with more focused ads.

6) Super-charge your email marketing!

According to Mailchimp’s data  if you’re really good and in the right industry your email marketing activities could have a 30% open rate. This means that on average 70% of your users won’t even open your emails. Pretty frustrating isn’t it?

Sometimes this can be ok, but other times you’re sending out a really important news or promotion and you want to reach all of your users, not just 30% of them. Facebook Ads can help.

Most of today’s email marketing products allow you to export a CSV list of users that didn’t open your emails. Do this and use the list to create a new Custom Audience that you can target on Facebook.

If you want to be even more aggressive, you might also consider targeting users who opened your emails but didn’t click.

7) Mix everything up to create a long term growth machine

This last step is probably the most complex but also the most exciting. Using Facebook Ads you can create a long term growth machine to continually bring in new people to your funnel and move them through it.

This approach is even more important for b2b startups or b2c ones with expensive products that are tough to sell.

Here’s a sample workflow of a 5-campaign setup for a SaaS Startup:

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Visitor:  A broad campaign based on precise interests targeted to attract visitors to your blog or website to let them know about you.

Lead: A campaign targeted to users that have already visited the blog (tracked with an Audiences from your website) to have them subscribe to your newsletter to stay updated on your awesome future content. In our targeting options, we’ll exclude a Custom Audience with the emails of everyone who has already subscribed.

Hot Lead: A campaign offering a free eBook (or other freebies) to position yourself as an expert in the market. When downloading the eBook users should fill out a longer form that gives you a detailed profile. This campaign will be targeted to a Custom Audience of all newsletter subscribers and will exclude a Custom Audience with everyone who has already completed a profile.

Customer: It’s time to see the money. Now they know you and respect you as an industry leader. Target a Custom Audience with your hot leads using a campaign pointing to a landing page where users will be able to subscribe to your service. You’ll want to exclude existing customers from this targeting.

Evangelist: Whenever possible, target existing customers to promote new features, special deals and referral programs where they can get discounts by referring new customers.

Finally, once you have enough customers, create a Lookalike Audience based on them and start targeting them instead in Step 1 instead of using precise interests (or you can use both).

Bonus Tips

1.  MUST. COMPLY.

Everyone should read Facebook’s Terms of Services for Custom Audiences very carefully and comply fully if you don’t want to see your account banned.

Forget about creating Custom Audiences with scraped emails or Facebook Users IDs (Facebook just killed this tactic) for which you have no explicit consent from the users… and, just in case you were wondering, NO, having their email published on a website does not means they’re explicitly authorizing you to use it for advertising 🙂

2. UID for better match rates

Facebook won’t be able to match all the emails with a Facebook Users. You’ll likely be able to target around 70% of the emails you add in a Custom Audiences. If you want to improve this, Facebook User IDs will bring you near to 100%.

If you’re using Facebook login on your site, use the UID instead of the email to create your Custom Audiences.