Do you have a subscription-based business or have you ever thought of starting one?
We all know the popularity of subscription box services – from non-perishables like BirchBox to the Blue Apron substitutes.
Did you also know that the subscription product model is one of the most competitive markets in online advertising?
Today, we are focusing on GlobeIn, a company that supplies their customers with a unique box of handcrafted jewelry, handmade home decor, kitchen accessories, and lifestyle products created by artisans internationally.
Not only is GlobeIn using AdEspresso, but they are also empowering communities internationally by providing full-time work.
GlobeIn: Business with a Mission
GlobeIn is a social business with a mission to empower artisans around the world. GlobeIn’s main product is a monthly Artisan Box subscription, where every product fights poverty through job creation and fair wages.
For us to get our message out, we began experimenting with Facebook Ads a year ago.
With our initial tests into Facebook Ads, we were able to quickly figure out that video worked better than images for our brand. We also figured out a basic split test to narrow our target market to just females. We also only targeted USA prospects.
But that was it – and it wasn’t enough.
Our returns were hardly profitable – and we couldn’t figure out why or what to do to fix it. Little did we know we were making big mistakes without realizing it.
“Re-targeting” was something we hadn’t given much thought to. And outside of “interests” targeting, we hadn’t test any other capabilities to target new prospective customers who hadn’t heard of our brand. Our split testing was also simplistic: just testing video ads against one another.
That’s when we came across AdEspresso. They sparked our journey into optimizing and creating a multitude of ads to address all of these issues: to both familiar audiences and brand new people. Now we consistently spend over 10K per month on Facebook Advertising.
In this post, I’m going to explain how we maximized our returns by focusing on the two core audiences every subscription business needs: reaching back out to those that have interacted with your brand (AKA Warm Audiences) and attracting those that never have (AKA Cold Audiences). I’m also going to make a note of how we’ve adapted this strategy to fit a subscription-based business: acceptable cost per purchases for subscriptions depend on customer retention.
Warm Audiences – Optimizing our Retargeting
Types of Remarketing Audiences
If you’re new to remarketing, first things first – make sure you have the Facebook Pixel installed on your site (AdEspresso has a free pixel plug-in for WordPress users for this!).
When we first started experimenting with the previously mysterious concept of “re-marketing” we didn’t have big audiences. We didn’t even have enough to target the e-commerce “low hanging fruit” of those that started a checkout but didn’t finish.
However, upon using AdEspresso, we realized the best way to scale was to build a wide funnel.
We knew that – as a subscription box service – the purchase was going to be much harder for those on the first click, which makes re-marketing that much more crucial for subscription success.
The way we “followed up” with those that interacted with our brand, was creating campaigns that targeted the following large custom audiences:
- Engagement (those that engaged with our ads/page posts)
- Website Visitors (those who came over to our site)
- Video Views of your Video Ads (those that watched your videos – either ads or organic)
What To Offer to Remarketing Audiences?
Simply asking our website visitors, page fans, and video viewers to come back and purchase the box, offers no additional incentive or value to return so, instead, we decided to compose “offers.”
We used 3 main offers:
- Free product (mug, fans, etc.) with a one-month subscription
- $10 Voucher off an initial month’s subscription
- $20 Voucher off a six-month subscription
We targeted all three offers at the same time and to the same audience.
We have a short window (will explain more in a bit) and we use enough budget where we make sure everyone who came to the site and is on Facebook sees all of the offers quickly.
To do this, we optimized for reach over 3 placements (News Feed, Mobile, Right Hand Column).
The user, now familiar with our brand, could pick the offer that resonated most with them.
It also allowed us to maintain a frequency of 8 (which means on average, the same person saw an ad from the campaign 8 times) – however – they would likely not see the same ad more than 3 times.
But the real magic behind these great conversions was the offer in tandem with the timing.
Remarketing Audience Timeframes
Keep in mind – the larger your time frame, the larger your custom audience will be. The maximum time someone can be targeted (outside of emails uploaded to Facebook – which is indefinite) is 365 days. For many audiences (like website visitors), it’s shorter: 180 days.
Time frames matter. For promotions, broader time frames are ok. But for us, we wanted a consistent remarketing campaign that targeted users who had GlobeIn fresh in their minds.
We began testing in 3 day time “blocks” to see what audience had the highest ROI:
- 0 – 3 Days
- 4 – 7 Days
- 8 – 11 Days
We found that longer than that resulted in higher frequencies and a higher cost per conversion. And of those time frames, the best cost per conversion was 0-3 days. The longer the time frame, the more expensive the conversions.
We hit an 8X ROI with that time frame.
*Side note: our cost per conversion are gradually increasing, so we certainly aren’t done adapting the offers and testing here*
The best remarketing audiences for subscriptions were three simultaneous offers to a very fresh audience:
- Engagement 3 Days (page engagement, page visits, and engagement with other ads),
- Website Visitors 3 Days
- 75% Video Views of our Video Ads in the last 3 Days
New Audiences – Scaling Our Campaigns
While we did find that purchase on a first click basis is less likely to turn a profit than retargeting (as a subscription is a larger commitment than a one-off purchase), we still managed to get purchases from cold audiences.
In all of the campaigns, we excluded remarketing audiences so we could ensure we were only reaching new people.
The Big No-No: A Free Box with No Strings Attached
Our first tests on cold audiences were also our mistakes: we offered a free box thinking that subscriptions would continue. We just made them pay 5 dollars for shipping.
Initially, it seemed successful until we saw the customer retention. The churn rate for these campaigns was abysmal: 90%! That means of the people that got the free box, only 10% continued the subscription.
The conclusion here is that while the free box did get us a lot of traffic and conversions, it was low-quality traffic and customers did not continue.
Stick with us, toward the end of this post we’ll explain how we managed to offer a free box -with different terms – that was a big success.
While our remarketing campaigns were running from July 2016, it wasn’t until November 2016 when we started rolling out successful campaigns to new audiences.
Split Testing of Interests:
We tested two video ads with the other goal being a split test of interests. Unlike remarketing, we did not offer “bulk month” discounts or free gifts, as we needed to remove friction: we just wanted a monthly subscription.
The interests we were testing created a total audience of 70,000,000 (70 million).
AdEspresso’s automatic optimization re-distributed budget to the best performing interest without us having to spend hours doing it by hand.
And we could see pretty quickly that the interests you target make a huge difference!
Ironically, we noticed little to no difference between the video after a month (so you can wait before making a decision on a winner!):
And, with such a big campaign (over 15K spent), we filled our remarketing funnel with video viewers that might go for one of our offers later on. This was all at an acceptable conversion cost (although it was 3X the cost of what remarketing was getting).
We eventually had to pull it as the cost per conversion spiked for a week – (99 dollars per conversion compared to 9 dollars per conversion at remarketing).
However, its success inspired us to optimize our cold audience outreach even further.
Lookalikes and Combinations
2% Lookalike without Interests
Just like our interests campaign, we only went after a monthly sign up – no special offers.
This time, we wanted to create a 2% lookalike audience. Our best 2% lookalike was created from our best customer list: subscriptions of 6 months or longer.
This was an audience size of 2.4 million people. We did not use interests at all. Instead, we tested creative combinations. Video here was the big determinant of success (we tested one against the other). The cost per conversion was almost 20% higher for one!
Similar to the previous cold audience campaigns, eventually this too began to have rising conversion costs
5% Lookalike With Interests
After the interest split testing and 2% test, we decided to try a larger audience – a 5% lookalike, but combined with interests! The interests we used were the winners from our initial interest split test cold audience campaign. This became an audience of 2.5 million people.
We also took the creative elements that won in the previous 2% lookalike experiment and tested elements even further – especially video.
There was, again, a clear difference with which video resonated with this now highly tailored cold audience.
We also split test age ranges:
And while this was the highest cost per conversion for a monthly sign up so far, it still allowed us to continue to reach a larger audience and convert on a profit.
Once the average conversion cost started generating negative returns (only after we spent almost 22K with positive returns though!), we decided it was time for another round.
10% Lookalike With Interests and a “Special Offer”
This time, we offered a free box, but with a mandatory 6-month subscription.
Too much of a commitment?
This campaign became our cherry on the top of our Facebook Ads cake.
We took everything we learned before – the best interests, the best lookalike lists, and the best testing, to go even farther.
We optimized our ad text from earlier campaigns and were surprised to see that – even after spending 50K on ad spend, we were still able to optimize it some more! The testing never ends when AdEspresso makes it so easy!
While conversion cost in this campaign was the highest -compared to all the others in this post (about 20% higher than the other lookalike campaigns), it was selling a 6-month subscription. When we take into account that, it was our most profitable ROI even after accounting for the costs.
And while we’re optimistic on these initial results, we’d like to see the retention rates down the line!
Bonus: The Social Proof “Page Post” Hack
Whether you’re going after cold or warm audiences, you need to know this hack!
While AdEspresso has covered social proof in advertising extensively, social proof is essential for subscription models!
For many of our posts, we will turn an organic post into an ad after the post gets good social proof, i.e. a good amount of likes and comments. The most effective way to do this is by posting an “engagement-oriented” post on the page, without including a link in the post, and pro-actively ask for likes and comments.
After the post picks up organic social proof, you can tweak the copy a bit to make it more sales-oriented, have a strong call to action, and a link.
Once you’ve tweaked the copy and added a link, you can Boost the post directly in your page, or open up all the targeting by using AdEspresso and choosing the Page Post option!
Then choose the now-tweaked post from your list of posts (or just paste the POST ID).
Keep in mind that with normal ads, you are “embedding” a link in the ad – and if you change that link, your social proof resets to zero. Not so if you aren’t using a link ad and instead just put the link in your “page post”.
I highly recommend this social proof hack, especially for a new line of subscription box!
Conclusion and Takeaways:
Our overall takeaways:
- Create offers for your remarketing audience – ideally, ones that secure a long-term commitment (3 months or more)
- Test audience time frames based on the last time they interacted with your brand – notice the conversion cost differences depending on how broad of a remarketing audience you are going for!
- Split test interests and then combine the winners with lookalikes between 2%-5% to reach out to high potential cold audiences
- Don’t offer a free box without a longer commitment (90% churn OUCH)
- Do offer a free box with a long-term (at least 6-month) commitment
- Grow your Facebook page (and remarketing audiences!) by boosting an organic post with social post to new audiences
Also, use the AdEspresso Campaign Review service, it’s what got us so involved! Getting objective insights and advice from Facebook Ad experts have continually improved our abilities as advertisers and our company’s success!
For us, we still have a lot of ground we can continue to test. Whether it’s more lookalike and interest combinations, or more creative ways of showcasing social proof, we’re looking to continually improve our advertising returns with AdEspresso!
And you? What do you think of GlobeIn’s story? Do you recognize yourself in some of these problems? What about the gains? Leave us a comment and let us know!
Liza Moiseeva is a Co-Founder and Director of Marketing at GlobeIn. Her passion for creating a positive social impact landed her jobs with nonprofits working in micro-finance and poverty alleviation areas, and an MBA in Finance with a focus on impact investing.”