I’ve been apart of many equity campaigns that we’re able to scale a small marketing budget with a 5x to 10x return on Facebook ad spend. For example, one of our clients PopCom saw a 10x return on ad spend after making an initial investment of less than $5K. With that, they were able to reach the $1.07M cap on StartEngine during their first raise, and have currently raised over $500K during their second raise.
Even though PopCom and other companies with similar stories, were initially hesitant about investing in Facebook and scaling their budget, they were able to become one of the fastest-growing equity campaigns on platforms like StartEngine.
Their stories show that Facebook advertising is extremely important for your equity crowdfunding campaign, yet often see clients resist investing in the platform for the following reasons:
“I don’t have a budget.”
“I tried Facebook in the past and didn’t get any results.”
“I don’t know how Facebook advertising works to target investors.”
If you’re about to launch an equity campaign, and also feel hesitant about Facebook advertising for the above reasons, then we want to reassure you.
Facebook advertising is fundamental.
The success of your equity crowdfunding campaign, whether it’s a Reg CF, Reg A, or Reg D campaign, lies in advertising unless you’re confident that your close network (friends and family) will help you reach the cap. By explaining why Facebook advertising is an absolute must for your equity crowdfunding campaign we hope to instill confidence with the platform and give you the actionable insights you need to make your Facebook ads convert.
Reason 1: You Can Place a Facebook Pixel on Your Equity Portal
A Facebook pixel is an analytics tool used to measure the effectiveness of your Facebook advertising efforts by collecting data about the traffic that visited the raise page. It’s a small bit of code that you can insert onto your campaign portal page so you can:
Make sure your ads are shown to the right investors
Re-target investors with different ads and messaging
Measure the results and performance of your ads with vital metrics such as Cost Per Click (CPC), Cost Per Impressions (CPM), Return on Ad Spend and Acquisition (ROI).
The data from a Facebook pixel is extremely important as you’ll be able to optimize based on the audiences that are performing the best and investing the most, whereas other channels are limited to optimizing off of superficial metrics like traffic, not necessarily actual conversions. The Facebook data also allows you to adjust your campaign to see where performance is lacking and allows you to test different ads to increase performance. That way, you can safely scale the budget while scaling investment.
Reason 2: You Can Reach New Audiences and Retarget Them
To raise over a million dollars with an average everyday investment of $100, you need to be able to drive thousands of people to your raise page. If you’re not confident that your network will help you reach your raise goals, then it’s essential to build awareness about your campaign and drive investments from new investors.
Investing in Facebook ads essentially allows you to expand your reach to very specific investor audiences, and retarget them continuously until they convert. In fact, with equity crowdfunding, we see the highest conversion rates on retargeting ads simply because an investment is not a one-time purchase that you can return. It takes much thought, consideration, and multiple touchpoints from the brand to convince an investor to take a stake in your startup, and Facebook ads can provide those touchpoints and reminders investors need.
Reason 3: You Can Transform Users to Investors, and Investors to Users
Equity crowdfunding is such a powerful tool in that investors can become new users, and new users can become investors. Thanks to Facebook pixel data we’re able to set up funnels for clients to send investors to product pages for purchase, and new purchasers to the raising page for investment. You can also create campaigns post raise and use the Facebook pixel data for other campaign initiatives specifically related to business growth.
Reason 4: You Can Create Brand Ambassadors
With Facebook ad retargeting, you’re able to see repeat conversions while transitioning the bottom of your funnel into brand ambassadors. With the right momentum and messaging, you’re able to showcase and incentivize them to bring their friends, family, and network into the raise as well. Creating brand ambassadors not only creates third party validation to your campaign but also allows you to tap into another new warm audience for your campaign.
Facebook Ads Allows You to Close Out Your Round Faster
When you have conclusive data and the metrics dialed in you can safely scale a budget, build-out projections based on that data, and be able to anticipate an accurate spend to close out your round in a timely manner.
Facebook advertising is key to aggregating the appropriate data you need, and from experience, we can say without a strategic Facebook advertising campaign, reaching new investors will be more challenging.
So if you’re still doubting Facebook and unsure about taking the leap, reach out to us. We’re happy to alleviate any concerns and address your needs in terms of what Facebook can offer your campaign.