How to Use Facebook Ads to Get More Newsletter Subscribers

The simple methodology (that you can easily replicate)  

As mentioned above, none of our 3 publishers had ever used Facebook ads before. And in all honesty, neither had this author. 

The goal here wasn’t to set up the highest-performing ad ever. It was to figure out if Facebook offers a viable lead generation technique that anyone could easily replicate. 

Ad Setup

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There are a LOT of different ways to set up and track a Facebook ad. After messing around with tracking and pixels for a while, we collectively surrendered and went with the simplest option: the Facebook Ads Manager. 

Tip: The Ads Manager can be a bit complicated. If you get confused, go to your brand’s FB page and click ‘Promote’. This will allow you to create an ad using a much friendlier dashboard. After the ad is created, head back to the ad manager to track results.

Campaign objective:
Traffic (Get more Website Visitors)

Number of ads:
2 (each with different graphics and copy) 

Budget:
$50 per ad spread over 5 days ($10 per day) 

Tip: Facebook will try to show your ad on all platforms – Instagram stories, Facebook messenger… all sorts. If you’re also in the tech space and are working with a low daily budget, don’t waste it on testing. Make sure you only show your ads on Facebook’s usual feed. 

Audience selection

Web Tools Weekly:
People who match Interests: React (JavaScript library), CSS, JavaScript, or Web development

Hacker News Digest:
People who match Interests: Hacker News

HackerNoon Noonification:
People who match People who like Hacker Noon, People who match Interests: Hacker News

Tracking methods

Tracking is vital. If you don’t track your ad’s results, you won’t know what happened. 

Facebook will automatically track how many people clicked your link, but unless you have the Facebook pixel set up, it WON’T track how many people actually subscribed to your newsletter. 

Each of our publishers set up their tracking in a different way depending on their preferences and setup. 

At the very least, use  UTMs to track via Google Analytics. On top of that, it’s wise to create a separate landing page where subscribers will go into a specific group (MailChimp) or get a tag (ConvertKit). 

The Facebook Pixel

If you can install this, it’ll make your life a whole lot easier on the tracking side of things. The Facebook pixel tracks how many people sign up for your newsletter from the ad. But things get more advanced (and perform better) if you use it to build a lookalike audience. 

How did we do? The Facebook ad results

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For each publisher, we created two ad versions (each using the same audience). Interestingly, we didn’t see a whole lot of difference between the performance of each version. 

Ad Name	Cost Per Click	No. of Clicks	Impressions	Continue?	CTR
Web Tools Weekly 1	$0.53	86	4,928	No	0.01%
Web Tools Weekly 2	$0.48	94	4,704	Yes	0.01%
Noonification 1	$0.96	46	5,202	No	0.02%
Noonification 2	$0.99	46	5,340	Yes	0.02%
Hacker News Digest 1	$0.94	54	4,414	No	0.02%
Hacker News Digest 2	$0.82	53	4,333	Maybe	0.02%

Note: See that continue column? It’s for ads that had a reduced CPC by the fifth day. This indicates that the ad is performing well. We’d recommend continuing with these ads. 

Web Tools Weekly

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Version 1

Version 2

Hacker Noon Noonification 

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Version 1

Version 2

Hacker News Digest

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Version 1

Version 2

What do the results mean?

We can all read the results, but do any of those numbers mean we were successful? Metrics like CPA and LTV can tell us in more detail.

To find out more, we spoke to Pierre Lipton, the co-founder of 1440 Daily Digest newsletter — a newsletter with 270K subscribers: 

“Our average cost per signup on Facebook is $1.90. Due to the cost of advertising dropping in the wake of coronavirus, we’ve managed to get that down to $1.50 – $1.40 without changing anything significant.”

Calculating your cost per signup (CPA)

To calculate the cost per signup (also known as a cost per acquisition or CPA), use the following formula: 

{total ad spend} / {confirmed subscribers} = Cost per signup (CPA)

Here’s how our experiment turned out: 

Newsletter	FB Clicks	Confirmed Subscribers	Total Ad Spend	Cost per subscriber	Conversion Rate
Web Tools Weekly	180	62	$90.67	$1.46	34%
Hacker News Noonification	92	15	$89.62	$5.97	16%
Hacker News Digest	107	17	$93.38	$5.49	16%

As you can see, Web Tools Weekly managed to get a good CPA. Despite Hacker News Digest and Noonification getting a fair amount of clicks, the signup rate was really low–resulting in a bad CPA.  

How much is a new subscriber worth to you? 

With CPA, we know how much a subscriber will cost.

But how much is a subscriber worth? You can (and should) attribute a dollar amount to each subscriber if you plan to grow your newsletter with paid advertising. 

Calculate how much a subscriber is a worth based on two factors: 

1. The length of time a subscriber stays active (opening your emails).
   Use your email provider to check how long it takes for subscribers to go cold (generally when they haven’t opened an email from you in 3 months or longer) 
2. How much revenue you bring in from your newsletter.
   If you’re using a marketplace or network like Paved, you should be able to grab your revenue stats directly from your dashboard. 

Here’s how you calculate the value (also called LTV or Lifetime Value) of a subscriber: 

Data point 1: You have 10,000 subscribers with an average active lifetime of 3 years.  

Data point 2: Your average profit for the past three years 2020 was $10k, 2019 was $8k and 2017 was $6k. From that we can calculate an average yearly revenue:

Total revenue:  $10,000 + 8K + 6K = $24,000

Average yearly revenue: $24,000 / 3 = $8,000

Next, we look at the lifetime value of a single subscriber using our two data points.

{{total average revenue} / {active subscribers}} * {lifetime of subscriber} = LTV of subscribers

{8,000 / 10,000} * 3 = $2.40

So in this case, the lifetime value of a subscriber is $2.40. 

How to use this to determine how much to spend on ads:

If your CPA (or cost per subscriber) is bigger than the LTV of a subscriber, then it isn’t worth paying for them.  

So in this case, we’d want to spend a max of half our profit on a new subscriber. So you should be looking at a cost per subscriber that’s $1.20 maximum. 

If you want big results, you need to invest at least $50 a day

“In the beginning, when I was managing our Facebook ads, we were bringing in a maximum of 1000 people a day. Though more often than not it averaged around 300-400 people a day. We managed to keep the CPA (cost per subscriber/acquisition) down to ~ $1 per subscriber, but that’s only because of our low spend.”

The estimated value of a subscriber for 1440 is between $7 and $12. So paying between $1 and $2 for a subscriber leaves them with enough profit margin to continue driving growth in a big way. 

Now we outsource to an agency that brings in many more subscribers a day, but at a slightly higher cost. They get far more volume than I ever could by myself. Once you get to a certain size it makes sense to bring on the experts.”

So how much does it cost to rapidly grow if you’re not ready to outsource Facebook ads to a professional agency?

“I’d say you’d have to spend, at bare minimum $50 to $150 a day. Or aim for a weekly spend of $500 – $1000. But with a budget that low, you need to let ads run for a minimum of 1 week before you know if they’re working or not. You need to give the Facebook algorithm time to report what’s efficient.”

Apparently, the more you target a specific audience, the lower the cost of advertising. All of our tests in this experiment didn’t do particularly well engagement-wise. According to Facebook, they were all in the lower 35% of ads. This probably drove up the cost per click significantly. 

Never underestimate the power of testing 

Pierre’s key advice to Facebook newbies?  “The appetite to test is the most critical thing. Always test creative, test headlines, and try new audiences that you didn’t think would work.”

Facebook is where testing shines. You can test everything: your audience, your messaging, your headlines, your images, and your ability to drive engagement. 

All of the results we got in this quick experiment were the tip of the iceberg.

From here you could continue with the same low budget, but test over longer periods. Don’t be afraid to mix and match ad images, text, and headlines. 

Not even the experts know what ads will perform well (and for how long). 

 

How difficult is the whole Facebook Ad thing? 

Honestly… it was more difficult than you’d think.

But it wasn’t the hardest marketing task we’ve ever done.

It seems like every blog post out there says “do Facebook ads!!!” with reckless abandon. You’ve got to wonder how many people do it themselves. 

Well, I’m not here to hoodwink you. Facebook ads are pretty tricky to get right if it’s your first time trying them. And yes, you will waste a few dollars along the way. 

But, it’s not all doom and gloom — advertising on Facebook is a cheap way to add subscribers to your newsletter. But like Pierre cautions — you need to test, test, and test some more. 

It took us significantly longer to run this experiment than expected. Between pixels, tracking, landing pages, and ad copy, it wasn’t a quick magic fix. 

So…. should I use Facebook Ads for email lead generation?

Yes. But there’s a catch. It’s only worth your while if the cost of a subscriber (CPA) is significantly lower than the lifetime value of that subscriber (LTV). 

Based on our experiment, we found that a subscriber from Facebook can cost anything between $1 and $6. It’s up to you to test and track your ads to bring the cost down. If cash flow is important right now, then you want that cost to be at least half of a subscriber’s lifetime value. 

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Now that you know how to get more subscribers from ads on FB, how do you ensure that they add value?

One way to do this is by running sponsorships to monetize your newsletter.

With sponsorships from our world-class advertisers, you can get paid with every email you send. Join Paved’s network of publishers to access premium newsletter sponsors and grow your revenue.