Here’s How We’re Driving Ad Conversions with User-Generated Content (examples included)
A case study on how we launched and tested Facebook ads for our marketplace startup using UGC.
Creating custom content for Facebook and Instagram ads is an activity that most advertisers despise. It’s expensive and time-consuming. If you have a large budget, it’s not the end of the world. But if you’re an early-stage startup, it’s much more difficult to test and optimize across ad variation.
I have been a Facebook ads user for quite some time now (I used to run an agency) and I’ve seen many businesses with amazing products struggle to create content for their ads.
When it comes to social media ad creative, most businesses resort to creating what’s cheap and easy instead of a high-converting response ad.
I am writing this post to help my fellow advertisers find a sweet spot to create content cost-effectively and maximize their return on ad spend (ROAS).
Why I’m Runnings Ads
At my startup, Node, we’re building a collaboration platform for brands and micro-influencers. Since launching our freemium product a month ago, our goal has been to onboard more B2C brands through our lead form.
With revenue from our SaaS solution, we have relied on word-of-mouth marketing to bring in new customers and grow at a healthy rate. While this has been effective, we have never experimented with any ads for our business.
We hypothesized that the customer acquisition costs (CAC) via ad spend would be much more expensive than our organic channels and that paying for customers would not maximize our return on investment (ROI).
About a month ago, we decided that it was time to test our assumptions on the cost of acquiring new users through Facebook ads.
We didn’t want to organize a shoot or hire an agency
Several exceptional marketing agencies approached us, but given that our intention was to test Facebook and Instagram ads, we weren’t fully committed to investing in a video shoot or a long-term ad campaign.
Our goal was to ship rapidly, and fuel our ads with the best content we could possibly curate.
Total Ad Budget
- $125, 5x $25 Amazon Giftcards for customer testimonials
- $350, for 5 static posts and 3 videos (stories) from various influencers
- $2,000, monthly ad budget split between Facebook and Instagram (automatic placements)
Social Proof from Customers
When we started out, we knew three things:
- Nobody wants to read about generic software features. People respond to social proof (especially for a new product).
- A picture is worth a thousand words. Except when it’s a stock photo.
- People don’t come to Instagram to see ads. No one wants to hear about “vendor X” or how “vendor X” compares to other vendors.
Social proof is defined as “any situation in which a person uses the actions of others to determine their own behavior”.
There’s nobody better than your users to share this type of message. To generate impactful customer content for our Facebook ads we leveraged three key tactics:
- Requesting customers for testimonial videos shot as selfie videos. We didn’t want these videos to be overly polished for Instagram/Facebook
- Repurposing clips from Clubhouse rooms that we host with our users
- Offering customers gift cards for long-form testimonials (Capterra reviews and videos)
Influencer Seeding for Ad Content
Our customer testimonials were powerful, but they weren't polished and we wanted to test against an ad set with more aesthetic visuals.
High-quality content is crucial for an ad’s success. We know this because Facebook assigns a quality score to every ad based on each placement and penalizes low-scoring ads.
To produce high-quality images and videos of people using our product, we offered $30–50 to micro-influencers that were willing to create Instagram posts for us.
We used Node to execute the influencer seeding campaigns, but you can do the same by finding influencers on Instagram and contacting them via DM or email.
Pro tip: Whenever an influencer posts for you on Instagram, you can ask them to mark you as a sponsor and toggle Boosting permissions.
This will allow the content to show in your Facebook Creator Studio where you can use your ad dollars to boost influencer posts and reach a larger targeted audience.
It should be noted that all of our ads were targeted for cold leads. And these were our results from one month of testing.
To give you a benchmark for our ad performance, below I’ve included the industry averages for B2B ads on Facebook (taken from WordStream), as well as screenshots from our Google Analytics and Facebook Business Manager accounts.
Click-Through Rate (CTR)
Industry Average: 0.78%
Our Ads: 1.17%
Cost Per Click (CPC)
Industry Average: $2.52
Our Ads: $2.71
Conversion Rate (CVR)
Industry Average: 10.63%
Our Ads: 4.71%
Cost Per Action (CPA)
Industry Average: $23.77
Our Ads: $26.99
Retargeting is typically a huge driver for conversions since you’re targeting warmer leads, but it’s also becoming more challenging with the recent iOS 14 updates.
For our first month running ads, we didn’t activate our retargeting ads because we’re still building traffic and training our pixel.
- Despite the fact that our startup is in a competitive space (influencer marketing), our ads performed on-par, and in some aspects better than the B2B industry average.
- It doesn’t matter if you choose to work with an influencer that has 150K followers or a micro-influencer with 5K. If you’re boosting their content to a larger audience, the most important aspect of the post is the caption and visuals.
- Running ads without tracking your conversions is like shooting in the dark. Our CPC ranged from $1.43 to $4.63, but the CPA was as low as 12 dollars and went all the way up to 120 — this wouldn’t have been realized without conversion tracking
🙏🏽 Shout Outs
- Special thanks to my friend Alex for managing our Facebook/Instagram ads allowing us to make the most out of our budget.
- Plenty of love to our community of brands and creators on Node. They have been instrumental in helping us spread the word.
Seeking influencers to promote for your product/brand? Check out what we’re building at Node. It’s totally free to join!
💡 Other Articles You Might Enjoy
1. Influencer Marketing & Product Seeding: How It Works
2. How We Grew Our SaaS Startup to 100K ARR Using Cold Emails
3. How I Use Technology To Fight Anxiety & Stress