Facebook ads are increasingly becoming an integral part of advertising for small companies, especially in local communities. The low cost, coupled with progressive targeting, make Facebook advertising a high priority for SMBs. Realizing they are, most likely, unable to effectively run a campaign on their own, they turn to service providers to run their campaigns for them. However, the challenges for these agencies are continuously rising as agencies realize they are, effectively, losing money by managing SMB Facebook ads accounts, or, at the very least, turning little to no profit. We spoke to some of our clients and asked them what their biggest problems have been in managing ad accounts for SMBs. Undeniably, the primary complaints have been budget constraints, optimization, and lack of effective reporting methodologies.
While SMBs see the value in Facebook advertising, in practice their budgets are severely limited. As it is customary for agencies to charge a percentage of the amount being spent, agencies find themselves at an extremely low profit per account. Agencies serving SMBs, tend to charge a management fee of anywhere between 20% and 40% of the amount invested by the client. Thus agencies are forced to manage several dozens of accounts just to be able to afford the employee.
The average salary of a Facebook advertising analyst in San Francisco is $67,000 per year, or roughly $5,600 per month. If SMBs spend, on average, $1,000 per month, and the agency charges 30%, then the agency’s profit per account is $300, meaning they would need about 19 clients just to cover the employee’s salary, not including benefits. Agencies charging lower fees would require even more accounts (28 accounts if they charge 20%). Most SMBs won’t even be able to spend $1,000 on advertising, thus increasing the number of clients needed by the agency just to break even. Additionally, the penetration rate for Facebook Ads among SMBs is incredibly low, hovering at around 5-6% at best, thus making it harder for agencies to land new accounts.
The time and effort needed to manage such a massive number of accounts is just not feasible on a large scale given Facebook’s native tools, which leads companies to either lose money, since they aren’t earning enough to cover costs, tread water, which is effectively useless in the long run, or to give up on SMB advertising. Either way - somebody loses. Companies are in need of a scalable tool that will grow with them and allow them to handle more accounts at the same cost of labor, which will allow them to increase their client base and raise their profit margin.
Agencies need a tool that will allow them to efficiently manage several dozen clients and their multiple campaigns. With Facebook’s native ad management tool, agencies need to check each client’s campaigns manually to be able to optimize their campaigns. Third party tools, such as AdEspresso, Qwaya, and Adquant, provide agencies with a plethora of options in managing large scale accounts. However, they fall short in providing scalable and low-cost options for agencies managing numerous SMB accounts with budgets averaging several hundred Dollars per month.
Social media managers require campaign management tools that will allow them to quickly see which campaigns are working and which should be fixed or scrapped. Campaigns that deviate from predefined rules would be marked and prioritized so that the analyst would be able to see a snapshot of campaigns that are falling below expectations. Instead of going back and forth between dozen of accounts on Facebook’s native ad manager and scrolling through endless information for each campaign, analysts should be able to access one dashboard that automatically floats problematic campaigns, thus allowing the analyst to rapidly assess the underperforming campaigns.
An additional tool that would save resources for agencies would be an effective and efficient audience targeting tool. While Facebook allows advertisers to create an audience and reuse it for subsequent campaigns, these audiences are limited in usability. Agencies need the ability to define, save, reuse and cross-use targeting building blocks that capture specific targeting sections like interests, regions and demographics per SMB verticals and target GEOs; the combination of these “targeting blocks” allows the analyst to quickly create personalized, accurate account targeting at a fraction of the time compared to re-keying the information manually.
In addition to low budgets, agencies are also forced to deal with intricate budget management constraints. Resource allocation in campaigns is fluid, as funds are transferred from less successful campaigns to better performing ones. Native Facebook tools do not have effective budget management tools, causing analysts to maintain exhaustive spreadsheets offline detailing budget allocation per client, per campaign, and per ad set. Furthermore, as Facebook does not enable budget rollover, analysts must maintain accurate calculations at any given moment as to how much has been spent and how much will be rolling over into the next month’s campaign.
Analysts should be able to constantly have an accurate view comparing planned, allocated, spend and remaining account budgets and not have to update a spreadsheet to constantly manually track dozens of customers’ budgets.
Campaign performance reports are a key tool for customer retention. At the end of each reporting period, agencies are forced to manually create reports for their clients that reflect the effectiveness of their campaigns since the native reports provided by the Facebook Ads Manager are poorly suited to the average SMB. Agencies should have the ability to easily create customized performance reports that highlight the campaign success in a form that the typical SMB can easily understand.
Frankly, when examining the challenges facing agencies that provide SMBs with these services, it is clear why most agencies will shy away from serving SMBs with budgets lower than $3000 per month, but in doing so they leave a huge part of the market underserved. Camilyo’s platform enables agencies to efficiently manage dozens of small ad accounts for multiple clients while making a profit. By utilizing Camilyo’s platform, agencies will be able to uncover a very large untapped customer segment while adding an essential traffic generation service to their SMB marketing mix.
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