The Real Cost Of Facebook Ads For IT Services & How To Stay Profitable

So you’re thinking about hiring a consultant or agency to run your Facebook ads. The question on everyone's mind is?“How much will it cost?”

Just as you can't always give a precise pricing model for your managed IT services, social media advertising equally depends on a variety of factors before presenting a price.

I’ll try to explain in this article how much this could cost you and what’s involved so that you can decide if this path is right for you or not.

But let’s be clear. Unless you hire a rubbish one, hiring an agency or consultant to help you with ads is?not?going to be cheap. There are definitely pros and cons to hiring one and that’s what this article is all about. So let’s get on with it!

Should You Hire An Agency Or Consultant In The First Place?

Let me be honest with you for a moment. If you’re a small business that’s turning over less than $20,000 per month then it might not be worthwhile for you to hire an ad agency.?The costs will simply outweigh the benefits.

Everyone has read about Facebook ads and know they can be a powerful way to scale your business. But it’s going to take a long time for you to learn how to run ads and make them profitable. You’re also going to waste a lot of money learning how to get it right.?

Sure, if you’re a small business owner then you’re probably short on time, have your fingers in a lot of pies, and just need some level of consistency in your business so that you can make more sales. That leaves you with a few options. Hire someone in-house or outsource.

Outsourcing your Facebook ads makes a lot of sense?ONLY IF?you find the right agency that understands your industry and has the case studies and testimonials to back up that claim.?

That’s why?we only specialize in helping IT companies get more customers. We’ve run hundreds of campaigns so we know what works and what doesn’t in this industry.?

If you’re a small business that turns over less than $20,000 per month the biggest mistake you can make is outsourcing any of your lead generation to an agency that doesn’t understand your industry.?

You may as well just withdraw some money, put your money into an envelope and send it off to Facebook HQ. Because that’s exactly where your money is going to go if you use an agency that doesn't know your industry like the back of their hand.?

But in all seriousness, if money is tight, I do not recommend hiring an agency. Facebook ads, and really any social media advertising can cost quite a bit of money to get right.?

When you consider the ad spend you need to make ads work, plus the agency management fee (some call it a retainer) the costs add up. If money is tight, that expense can be unaffordable.

If your business has been built on shaky foundations and you’ve come to a point where it’s 'make or break' please do not spend your savings on ads! An advertising campaign is meant to supplement what is already working in your business.?

Throwing money at a problem doesn’t work?unless you know what your problem is. That’s why I invite you to schedule a call with me below before you make any decisions.

You Can Make Money With Facebook Ads Only If...

If you're reading this article the chances are that you're looking to make money with Facebook ads. And as a business owner, why wouldn't you be?

You can 100% make money with Facebook ads?IF?you have the budget to test offer+ad combinations over a period of time?AND?know what your problem is before you begin. Is your messaging off? Are you targeting the right people? Is your offer the right market fit?

Brand awareness and consumer engagement from Facebook ads can lead to better customer relationships, more sales, and lower overhead costs for your business. When you put all of this together, you have a great potential for growth, all at an inexpensive cost.?

When you compare the cost of social media to other, more traditional forms of advertising such as billboards, TV commercials etc., you’ll see the cost per result is infinitely less on social media.

Facebook ads have transformed the way we make money for our customers.?Let's say you sell a monthly IT service at $1,000 per month. As long as you spend less than $1000 on advertising that service (and make a sale), you’re making a?positive?return?on investment.?

Just how much that return on investment is all comes down to how you market the service.

When Is The Right Time To Outsource Your Ads?

When I speak to business owners I’m often looking to find out a few things. Do they:

1. Have a budget of at least $3,000 per month or more?

2. Have an existing list of customers, prospects and leads?

If the business has a budget of $3,000/pm or more then I know that there's enough cash to test multiple offers and then scale the winner once we find which offer+ad combo works best.?

A business that is short on cash will not have the patience to trust the testing period. Although we have run hundreds of ad campaigns for technology firms every market is different and every offer has a different market fit.?

Sometimes it takes less than 2-weeks to get results, other times it could take 6 weeks. But once the testing stage is completed and we have found the winners, it’s time to scale.

That’s why it’s important to have a decent budget before running ads. Initially, your budget is for testing. Hundreds of ads are tested during this period at $5 or $10 per day. Once we find profitable ad+offer combinations we'll scale them to $30 per day, or more!

We regularly create offer+ad combos that capture 3-4 leads each day, and we only spend $30 a day to make it happen. But that’s only once the testing period is over. Obviously, if you have the budget you can pump a lot more money into your ads. But make sure you scale?SLOWLY?or you'll break the algorithm.

If you’re short on cash and really need every penny, consider learning how to run your own ads. It might take some time to get right but it also means you’re not spending money you don’t have on management fees - which means you can put more of your money into the ads themselves. Once you’ve figured out how it works in a broad sense, you can look at outsourcing to a specialist.

If you have the time to learn how it all works, then we offer a personalized training program for business owners and their in-house sales+marketing teams that will show you how to generate leads for IT services using Facebook and LinkedIn.?

Schedule a call with me below to find out how that works!

How Much Does It Cost To Outsource?Facebook Ads?

I’m sure everybody on LinkedIn is fully aware of how many marketing agencies there are. Most of the time these marketing agencies don’t even have a clear understanding of who they serve and how they actually help.?

As a marketing agency owner myself, even I have been ‘pitched’ on LinkedIn for advertising services. It makes no sense what these agencies are doing and you would be putting your reputation on the line if you paid them for help.

I’ve seen ad consultants charge as little as $250 per month right through to $12,000+ per month. It’s a?HUGE?gap. In the early days of running my agency I actually paid one expert $1,000 for monthly consulting?(and I’m afraid to admit they weren’t exactly an expert)

So, what do you actually get for $250 per month vs $1,000 per month or even $12,000 per month? There's a few factors that go into the pricing of done-for-you services mostly based on

1. How much experience does the consultant have in your industry?

2. How many leads are you aiming for each month?

3. How much money are you willing to spend on ads to get those results?

The main number you want to keep in your head is the long-term value?(LTV)?of a new customer.?

If you’re a typical IT service provider you're probably charging on average $2,000 per month for a 24-month contract term. That's an LTV of $48,000.

That means if you pay an agency $6,000 for 3-months of work and they help you get 3 new customers after that 3-month period, you’ve made your money back instantly - and actually?stand to make $144,000 over the next 24 months.?

The thing with social media is that results are very black and white. You want to see a return on your investment.?If you hire an agency for $6,000 and they help you close 3 new customers, it’s a good deal right??

But if the agency helps you generate 60 new leads and you can’t close those leads, is that the fault of the agency or is that on you??

Agencies charge for their services in a variety of ways but at Tech Funnels we follow a very structured approach.?

If you’re spending less than $10,000 per month on ads then we charge a flat monthly with no setup fees.?Most agencies will charge a higher upfront fee to get started but to keep things simple we don’t do this.?

Instead, we distribute that upfront setup fee across the contract term.?You won’t even notice it.

However, if you plan to spend more than $10,000 per month on ads we charge a flat monthly fee + 20% of your ad spend.?

This option protects us if you’re ever to scale your ad spend (sometimes for short periods of time) and means we’re fairly compensated for the extra work we’ll need to do to make sure we get the results you’re looking for.

Average Costs: Facebook Ads

*These are averages based on hundreds of campaigns for IT companies selling in different geographical areas and markets. Your results will vary depending on a variety of factors. Every business is different.

Want help with your advertising strategy?

Contact me directly on social media or visit www.videoceos.com