Facebook Ad: exactly what I ever wanted... Me: "how did they know?"

Recently my classmates and I got the chance to visit Coefficient Labs in Santa Monica. Coefficient Labs specializes in growth hacking of new businesses that are backed by venture capitalists and taught us how to create and post social media advertisements!

They are located very close to a retail store I worked at all summer and I was able to stop at my favorite coffee shop on the way there! Upon arrival, they were not quite ready for us to enter and we all waited outside for a little. While waiting outside we got to meet a local Santa Monica celebrity! Charlie the Golden Retriever!

When we first went in I was very surprised by the size of the space as it was smaller than I expected. The space looked as though it may have previously served as an apartment, and had a layout consistent with a two bedroom apartment. I was however, pleased to find out that they too had a golden retriever... and I LOVE dogs!

We first heard from Sean Goldfaden, owner and CEO of Coefficient Labs. Sean explained first that in order for a company to grow, they need to get exposure, and that we would be focusing on the paid method of doing so. Paying for growth via social media allows you to better predict outcomes, in contrast to attempting to attain growth without paid social.

He then told us about the funnel analogy in relation to paid social. Essentially paid social acts like a funnel, with users coming in at the top, and purchases happening at the bottom. When you pay to promote social media posts or advertisements, you will get a lot of exposure (the top of the funnel), but as you move down the funnel from impressions, to clicks, to adding to cart, and eventually purchasing, the amount of users narrows as a funnel does.

Having the metrics available to view the funnel analogy in real time allows companies to better predict the amount of purchases that will result from investing in paid social. While the concept of only a small percentage of users who view the post actually purchasing the product was not foreign to me, it was helpful to view the process as a funnel.

Sean explained next that is easy to assume that you can widen this funnel by paying more for social media ads, but this is not the case! The problem with attempting to scale your company by increasing the monetary investment can be viewed in the bucket analogy that he shared with us.

The bucket analogy explains the problem with vertical scaling (paying more) by using a full bucket to represent social media users. The users at the bottom of the bucket are the best quality because they resemble your target audience and are more likely to purchase your product.

When you spend money on Facebook they will display your ad to your selected target audience (the quality consumers at the bottom of the bucket), but when you spend more money, the users who Facebook displays your ad to begin to get further from you target audience (the consumers at the top of the bucket). This means that you are not getting the same return on investment that you do when you spend less.

This led into his next point about the benefits of horizontal scaling. Instead of putting more money into paid social, it is wise to horizontally scale your as out to new demographics. You can do this by creating multiple target audiences and promoting the ad separately to different audiences. Horizontal scaling allows you to consistently reach consumers at the bottom of the bucket!

After Sean completed his presentation, our classes split up into our different pathways, content creation students stayed in the room with Sean and strategy students (me!) went into a different room with a couple other Coefficient Labs employees.

During this part of the session, I was able to set up a Facebook business account and learned how to use the ad promoting features, while my other classmates learned how to create an actual ad! It was cool to see how specific you can make your audiences with the information available via Facebook and was beneficial to actually create a business account for my project.

After sharing what each group had created, the session concluded. I left feeling like I had learned valuable tools, but thought the session could have been more efficient. It was difficult to move about the small space with the amount of people there and I constantly felt like I was in the way. Although the session did teach me important skills, I'd imagine I might be able to learn more, had the space been bigger!

For now: I'm left wondering what different target market attributes were selected for Facebook ads that I receive! There are two sides to every story.