How to advertise on Facebook for FREE with unlimited budget

You can realistically advertise on Facebook or any other marketing platform (like Google Adwords, Twitter etc) for FREE as long as you focus on optimising this one metric called ‘Return on Ad Spend’ (ROAS).

You just need to maintain your profitable ROAS.

However higher the better.

Introduction to Profitable ROAS

Profitable ROAS is the ROAS you need, in order to remain within your Max. CPA

Lets say you spent $25 on Facebook ads to generate 1 sale of $100 then your ROAS = $100 / $25 = 4

Lets say your maximum CPA is $20.

Now since your CPA from Facebook ads ($25) is higher than your max CPA of $20, you won’t be profitable.

So what should be your ROAS to be profitable?

Profitable ROAS = Average order value / Max. CPA

= $100 / $20 = 5

You would need a ROAS of 5 or more to stay within your Max. CPA target.

As long as you do that you can continue to advertise on any marketing platform for FREE and still make money on top of that.

Let me show you, how that is possible.

Let us suppose your Facebook ad spend in the last one month was $200

Let us also suppose your sales from Facebook ads was $1200.

So your ROAS = $1200/$200 = 6

Since your ROAS of 6 is greater than your profitable ROAS, you are profitable.

The money that you spent on Facebook advertising was $200.

So the money left after paying the Facebook ad bill = $1200 – $200 = $1000

 

And here is the cool thing.

You did not pay this money from your own pocket.

You paid this money from the sales you generated via Facebook ads.

So basically you were paid by Facebook for advertising on their platform.

This is the amount of money which you could not have earned without Facebook ads.

It is very important to remember that Facebook does not owe you any money.

 

So if you stop advertising on Facebook tomorrow, this money will disappear into thin air.

This is the kind of money you can generate only from Facebook.

ROAS of 6 or 8 is quite realistic with Facebook.

Following is the ROAS of one my Facebook ad campaigns:

 

Here the ROAS is 6.69 i.e. for every dollar I spent on Facebook, i got 6.69 dollars in return.

My ROAS fluctuates. Sometimes it goes as high as 10. I am not kidding:

So basically I advertise on Facebook for FREE.

In fact Facebook pay me for advertising on their platform.

Isn’t that awesome?

Get the E-Book (37 Pages)

I sell my web analytics training courses through Facebook which cost US $498.

So I am not selling $10-$20 items here which are much easier to sell on Facebook.

I am selling high ticket items.

And I do not really have any big budget either. My daily ad spend is around $20.

But I have managed to consistently sell very high priced items which many will tell you is not possible.

I do not have tens of thousands or millions of followers on Facebook either.

But my ads are reaching to the right people, my core target audience. That’s the difference.

That’s why I don’t need lot of reach to generate sales.

Majority of retailers sell items on Facebook below $50 and they mostly target random people.

Because of that they need to target a very large audience which increase ad spend and decrease ROAS.

 

Having said that my results are not typical and I am not promising that you will also get the exact same level of results.

What I can promise you is that getting profitable ROAS is not a far-fetched dream. It is very realistic.

You have to be in some very boring niche, to not to be able to make any money from Facebook.

There are lot of marketers out there making insane amount of money through Facebook ads.

And you will be able to see through your reports whether or not you are profitable.

So you don’t have to rely on guess work. Just track purchases within Facebook.

 

But here is the thing. You need a profitable ROAS  for this magic to happen for you.

Many marketer do not get the desired ROAS because their focus lies elsewhere.

They seem to be more interested in optimizing for clicks, impressions, cost per clicks, cost per thousand impressions, CTR etc.

Now nothing really is wrong with these metrics. They are all good for optimization.

But in the grand scheme of things, they don’t really matter.

What really matter is your ROAS.

At the end of the day if you are no making money, if you are not profitable, even a CTR of 100% doesn’t mean anything.

If you focus on increasing your ROAS, you can practically run your ad campaigns with unlimited marketing budget for FREE and continue to make money on top of that.

It is like using Facebook as a cash generating machine.

You put $1 into Facebook and you get $2 or more back.

The more dollars you put in, the more dollars you can get back.

 

However there is one caveat here.

Don’t get carried away.

Don’t get your hopes so high.

If tomorrow you put $1 million dollar into Facebook advertising system, you won’t magically get $2 million or more in return.

The law of diminishing returns will stop you from doubling/tripling your ROAS by just doubling/tripling your marketing budget.

You can’t just double your ROAS by doubling your ad spend.

It doesn’t work like that.

According to the law of diminishing returns, if you keep adding more of one unit of production to a productive process while keeping all other units constant, you will at some point start producing lower per unit returns.

So in order to increase your ROAS, you need to do lot more than just doubling your marketing budget.

You need to continue to optimize your ad campaigns for conversions.

You would need to run new tests. Target new markets etc.

But this is all possible only when you first shift your focus from clicks & impressions to ROAS.

WARNING: If you operate on very low Max CPA, you may not be able to leverage any online advertising platform and hence won’t be able to scale

Average CPA is increasing month by month because of increase in advertising competition.

So in order to compete effectively, you would need to spend lot more than your competitors to acquire customers.

Your Maximum CPA depends upon your desired level of profitability and your industry

The more operating profit you want to generate, the higher your operating profit margin needs to be.

However,

In order to acquire a new customer, you would need to sacrifice certain portion of your operating profit. This portion of your operating profit would cover your customer’s acquisition cost.

Consequently,

Higher your desired operating profit, lower is going to be your Max CPA

In other words,

Higher your desired operating profit margin, lower is going to be your Max CPA

Conversely,

Lower your desired operating profit margin, higher your Max CPA can be.

If you are operating in a very competitive/saturated market then your average cost per acquisition is going to be pretty high.

In that case you can not afford to operate with high operating profit margin.

You would then most likely have to operate on a very low profit margin.

Otherwise any type of online advertising won’t be profitable for you.

Next Read: How to calculate Maximum CPA and Minimum ROAS?

Related Articles

 

What is the difference between Digital Analytics and Google Analytics?


99.99% of course creators themselves don’t know the difference between Digital analytics, Google Analytics (GA) and Google Tag Manager (GTM).

So they are teaching GA and GTM in the name of teaching Digital analytics.

They just copy each other. Monkey see, monkey do.

But Digital analytics is not about GA, GTM.

It is about analyzing and interpreting data, setting up goals, strategies and KPIs.

It’s about creating strategic roadmap for your business.


Digital Analytics is the core skill. Google Analytics is just a tool used to implement ‘Digital Analytics’.

You can also implement ‘Digital analytics’ via other tools like ‘adobe analytics’, ‘kissmetrics’ etc.

Using Google Analytics without the good understanding of ‘Digital analytics’ is like driving around in a car, in a big city without understanding the traffic rules and road signs.

You are either likely to end up somewhere other than your destination or you get involved in an accident.


You learn data analysis and interpretation from Digital analytics and not from Google Analytics.

The direction in which your analysis will move, will determine the direction in which your marketing campaigns and eventually your company will move to get the highest possible return on investment.

You get that direction from ‘Digital analytics’ and not from ‘Google Analytics’.


You learn to set up KPIs, strategies and measurement framework for your business from ‘Digital analytics’ and not from ‘Google Analytics’.

So if you are taking a course only on 'Digital Analytics’, you are learning to use one of the tools of ‘Digital analytics’. You are not learning the ‘Digital analytics’ itself.

Since any person can learn to use Google Analytics in couple of weeks, you do no get any competitive advantage in the marketplace just by knowing GA.

You need to know lot more than GA in order to work in digital analytics and marketing field.


So what I have done, if you are interested, is I have put together a completely free training that will teach you exactly how I have been able to leverage digital analytics to generate floods of news sales and customers and how you can literally copy what I have done to get similar results.

You can sign up for the free training here: https://learn.optimizesmart.com/registration-web-class

I truly hope you find it helpful.  

My best selling books on Digital Analytics and Conversion Optimization

Maths and Stats for Web Analytics and Conversion Optimization
This expert guide will teach you how to leverage the knowledge of maths and statistics in order to accurately interpret data and take actions, which can quickly improve the bottom-line of your online business.

Master the Essentials of Email Marketing Analytics
This book focuses solely on the ‘analytics’ that power your email marketing optimization program and will help you dramatically reduce your cost per acquisition and increase marketing ROI by tracking the performance of the various KPIs and metrics used for email marketing.

Attribution Modelling in Google Analytics and Beyond
Attribution modelling is the process of determining the most effective marketing channels for investment. This book has been written to help you implement attribution modelling. It will teach you how to leverage the knowledge of attribution modelling in order to allocate marketing budget and understand buying behaviour.

Attribution Modelling in Google Ads and Facebook
This book has been written to help you implement attribution modelling in Google Ads (Google AdWords) and Facebook. It will teach you, how to leverage the knowledge of attribution modelling in order to understand the customer purchasing journey and determine the most effective marketing channels for investment.

Himanshu Sharma

Digital Marketing Consultant and Founder of Optimizesmart.com

Himanshu helps business owners and marketing professionals in generating more sales and ROI by fixing their website tracking issues, helping them understand their true customers purchase journey and helping them determine the most effective marketing channels for investment.

He has over 12 years experience in digital analytics and digital marketing.

He was nominated for the Digital Analytics Association's Awards for Excellence.

The Digital Analytics Association is a world renowned not-for-profit association which helps organisations overcome the challenges of data acquisition and application.

He is the author of four best-selling books on analytics and conversion optimization:

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