Building A Business With Nothing But Facebook Ads (a 6-week experiment, Week 1)

This January, we experimented with different on-demand design services to find out which ones produced the best Facebook ad ROI. Over the next month, we’re running an even bigger and better experiment.

We’re starting an online store, and we’re going to build and grow it using nothing but Facebook ads.

After all, any business can benefit from Facebook, but there are some kinds of businesses that simply excel. They don’t need to be built around world changing ideas or bring 7 figure ad budgets to the party—they succeed because their business models are perfectly suited for the powerful tools Facebook has at hand.

In a series of six posts, we’re going to take you through the process of starting up a business like that. If you’re impatient, click here and scroll to the bottom for more details on the experiment and the store we’re starting.

If you’re not, here are some of the models that we thought about when we started this experiment: the 3 kinds of businesses we think Facebook advertising is practically made for.

Consumer Brands Can Stand Out From the Competition

Consumers who know what they’re looking for turn to Google. Once your heart is set on a particular new camera, it feels almost unconscious to search for it and start comparing options. But what if you didn’t even know you wanted a new camera?

People aren’t on Facebook looking to buy. They go there to see what their friends are up to, to share what they find interesting, and look for engaging content in return.

Far from being a problem for advertisers, it’s a huge opportunity. Google ads are ideal for demand fulfillment—if you know what you want, it’s only a search away. But Facebook is perfect for demand generation—guiding people to decide what it is they want, before they want it. And consumer brands are in a perfect position to capitalize on this.

Of the 11 biggest Facebook advertisers last year, only two— Amazon and Walmart—were retailers. The rest were consumer brands like Nestle, Coca-Cola, Procter + Gamble, and Samsung. These companies are large and successful, but they’re also trying to stand out in crowded marketplaces. Why should a consumer care about a Nestle candy bar over a Mars candy bar, or a Coke over a Pepsi?

The power of Facebook combines its “destination” status—like TV or newspapers back in the day, it’s a go-to source for entertainment—with targeting that lets advertisers reach a specific audience, for less money.

The very fact that people aren’t thinking about buying something specific makes it a perfect medium to put an idea in your head that can turn into a purchase and, down the line, create an affinity that’s hard to shake. By building up brand affinity, successful businesses can use Facebook to inspire people to desire things they didn’t know they needed, but now can’t do without.

Facebook Helps Consumer Brands Inspire People

Businesses that understand the aspirations of their customers have a huge leg up on the competition. Take American Express. Getting a new credit card is a big commitment, but it can also be hard to differentiate between the few big name brands. Why not just choose the card offered by your bank, or one that offers the best miles deals?

In this ad, American Express doesn’t try to outdo the competition with the best deals. They want to inspire people to think about experiences. If you’re browsing Facebook on the train after a long day at work, you’re probably not in the mood to see an ad about super affordable interest rates. But you might be daydreaming about your next adventure, and this ad is meant to tap directly into that.

Psychologists have shown that ads are particularly effective at motivating people when they tap into certain emotional traits: Extraversion, Agreeableness, Conscientiousness, Emotional Stability and Openness to Experience. In this ad, American Express taps into several of those emotions, all at once.

The ad casts a wide net, but it makes one thing clear: whatever you’re into, you can make that experience happen with American Express.

Local Businesses Can Bring People in the Door

Advertising can be a hassle for local businesses. They’re too busy running a coffee shop, pet store, or gym to become masters of SEO on the side.

Luckily, there’s Facebook. Facebook local awareness ads are the targeted, cost-effective equivalent to sending someone out onto the street dressed as a hotdog or statue of liberty to hand out fliers. They can find people in a specific radius, and are designed to get to as many people as possible in that geographic area. That makes them a perfect way for local businesses to drive potential customers right to their doors.

Businesses can reach people who are local to the area, or who are just visiting, so that whether you’re the hippest coffee shop in Takoma trying to find regulars, or Waco’s finest cowboy boot vendor looking for people who want unique souvenirs, it’s possible to do it with Facebook.

How Museums Can Bring in Visitors on Facebook

The Kimbell Art Museum is right in the heart of downtown Fort Worth, Texas, near a host of other museums, parks, and other popular tourist attractions. It’s a perfect location to use local awareness ads to promote their exhibition showing famous masterpieces from the National Gallery of Scotland.

This ad doesn’t just spell out what’s in the exhibit, it also uses language to generate the feeling of loss aversion. That’s the psychological tendency that makes people want to avoid a loss more than getting some gain:

The Kimbell doesn’t have to end their Facebook engagement when users step into the museum, either. They can use Facebook’s beacon tool to send information to people who check in on Facebook when they visit the museum. They might have been attracted by the thought of the exhibit, but if they want a lasting memory, a notification that there’s a sale in the gift shop could generate even further sales for the museum.

Personalized Businesses Get Hyper-Specific Targeting

People go on Facebook to share what makes them unique, and Facebook, in turn, makes it easy by giving them an ever-growing number of ways to define who they are. If you’re a first-time homeowner who loves pugs and woodworking, you can share those interests in all sorts of ways on Facebook and find communities that meet your niche.

That customization is a boon to businesses too, because it allows you to target customers with a kind of absurd, hyper-personalized reach that would have been unthinkable a decade ago. With Facebook you can mix and match incredibly specific demographic niches to find people who could be interested in your product.

So, if you’re starting an online store to sell reclaimed wood dog toys, you might want to reach people who, like our homeowner above, like pugs AND woodworking, instead of just one or the other.

If your product or service is customizable, whether it’s a clothing line, headphones, or movie posters, it’s possible to find incredibly specific groups that could be interested in your product on Facebook.

How Concert Promoters Can Use Facebook to Find The Right Audience

Concert promoters face a challenge—they want to promote a ton of diverse, eclectic acts, to a similarly diverse, eclectic audience. The combination of specific demographics can help businesses target much more, and the promoters of Austin City Limits Live, a music promotion channel in Texas, used that to great effect.

A few years ago, that might have meant advertising in several local newspapers, or knowing which record shops to hang fliers in. Even in the age of email and search, it’s time consuming and expensive to find the right keywords for every potential audience, and a waste of time to expect people to browse through a monthly newsletter to find the bands they want to see.

With Facebook, promoters can find and reach out to multiple, hyper-specific groups simultaneously.

As part of the 2015 Fun Fun Fun Fest, Austin City Limits Live promoted a live taping of StarTalk!, a popular science podcast. Finding ways to promote an event like this pre-Facebook could have been a nightmare.

With demographic targeting, ACL Live could start broad, with people who like Bill Nye The Science Guy (there are almost 4.5 million of them!). But they could then target even deeper, testing combinations of people who liked Eugene Mirman, lived in or were visiting Austin, and who liked comedy, science, and live events.

If you’re a science buff who grew up in the 90s and loves comedy, you’d hate to miss this show. Luckily, with Facebook ads, ACL Live made it extremely unlikely that you would.

Facebook Ads Experiment: King’s County Threads

These business types are particularly well suited to Facebook, but what if your business doesn’t quite fit into any of these categories? Or what if you’re not quite sure about how to grow your company or develop your product?

The truth is, any business can take advantage of these and Facebook’s many, many other advertising tools to reach customers at every stage of the sales funnel. To prove it, we’re starting our own.

OK, we just have one shirt right now. That’s the point. We don’t have a massive product line we’re putting out there. We don’t have some other marketing channel we’re going to use to make this work. We’re going to try and turn this business, King’s County Threads, into a success with nothing more than an idea and some Facebook advertising.

For background: the L Train is a very important, popular, and hip part of New York City’s public transportation system. It’s an essential train for a lot of Brooklynites. Now, NYC is saying they may have to shut the whole thing down for years to make certain repairs.

We really wish they wouldn’t, we think there are a lot of people out there who agree, and we want to see if we can reach those people with Facebook.

But this isn’t some “get rich quick” scheme, and the point of this experiment isn’t to lie to you and tell you starting a real business is easy. It’s to demonstrate how the right strategy and the right mindset can take you from idea to minimum viable product in no time. It’s to show you how to actually use Facebook ads to get your business off the ground. And it’s to show you all the little moments, good, bad, and ugly, that come up along the way.

We’ll go through the process of refining our product with feedback, targeting the right market and setting up the first ad. Then we’ll look at how to use the results of a campaign to start getting better, and we’ll be sharing all our learnings along the way!

If you have any questions about our experiment, or even want to contribute your own ideas, please comment below! Make sure you stay tuned for the next episode too – we’re launching one per week!