Stop Focusing on Video Ads on Facebook
I’ll come clean: I love being contrarian. If everyone is moving left, my natural instinct is to move right. Going against the grain and established norms comes naturally to me and I won’t hide a certain thrill I get about finding something new or valuable that everyone else has overlooked.
So when I saw everyone and their brother start moving towards video content on paid ad platforms like Instagram and Facebook, I naturally was suspicious.
Why? Because while I’ve had success with video content in the past, my data has shown me time and time again that it’s far from being the norm. In fact, sometimes my clients have spent thousands of dollars on videos that don’t necessarily outperform single image and carousel types enough to warrant the additional investment.
And that’s what this blog post is all about. I want to raise awareness about the not-so-hidden costs of video ads and the impact they should have on the way you report your ad campaign’s success.
The Return on Ad Spend and Cost per Acquisition Formulas That Video Sometimes Isn’t Worth It
To calculate the cost per acquisition (CPA) of an ad campaign, you would typically use the following formula:
CPA = Total Cost of Campaign / Number of Conversions
However, you should also take into account the cost of a video as it is your campaign asset and therefore part of your total cost of the campaign. Here's an updated formula that takes the cost of the video into account:
CPA = (Total Cost of Campaign + Cost of Video) / Number of Conversions
For example, if the total cost of the campaign was $10,000 and the cost of the video was $2,000, and the campaign generated 100 conversions, the CPA would be:
CPA = ($10,000 + $2,000) / 100 = $120
So the cost per acquisition of the campaign, taking into account the cost of the video, would be $120.
Now let’s say that you had a single image that led to only 90 conversions at a cost of $10,000. You might initially say, ‘Well it led to fewer conversions so it performed poorly. The conversion rate is clearly lower for single image vs video’ – but let’s run the numbers:
CPA = $10000/90 = $111.
Get the picture? A single image with a relative lower conversion rate can still outperform a video. The picture becomes even starker when you take into account the additional personnel time it took to create the video: a script your copywriter had to produce, additional complexities generated from coordinating two-three additional people, etc. All of that should also factor into your CPA.
Now you might be thinking, “Well CPA isn’t everything. You’ve said so yourself in the past. What about ROAS?”
What about ROAS, indeed. Let’s consider the following formula:
ROAS = Revenue Generated from Campaign / Cost of Campaign
If you want to take into account the cost of a video that was created specifically for the campaign, you would need to include that cost in the total cost of the campaign, as follows:
ROAS = Revenue Generated from Campaign / (Total Cost of Campaign + Cost of Video)
For example, if the total cost of the campaign was $10,000 and the cost of the video was $2,000, and the campaign generated $25,000 in revenue, the ROAS would be:
ROAS = $25,000 / ($10,000 + $2,000) = 2.08
So the return on ad spend of the campaign, taking into account the cost of the video, would be 2.08. This means that for every dollar spent on the campaign (including the cost of the video), the campaign generated $2.08 in revenue.
If we were to run the same exercise with single image, assuming that it also generated $25,000 then the ROAS would be 2.5. The campaign would’ve generated $2.50 back for every dollar spent.
Even if it didn’t generate $25,000 back, it still generates higher ROAS if it only generated $21,000 (ROAS of 2.10 vs 2.08)
Always Stand Out With Facebook (and Instagram) Ads
Put yourself in the position of your average Facebook or Instagram user. If 80% of the content they’re consuming is video, then aim to be the 20% that is showing images. Why? Because it’s different, it’ll draw attention. When users become accustomed to seeing only one type of media they will eventually scroll without paying much attention.
Consider the following inner monologue. Can you empathize with it?
Oh, another video? *scroll*
Oh, a carousel! I haven’t seen one of these in a while.
*scrolls through a few of the slides*
Wow, I didn’t even know this product existed.
*scrolls once more*
These guys get it. I’ll check them out.
The Caveat on Facebook Video Ads
Just like short copy will outperform long copy if your long copy isn’t well written, we’re talking about videos vs single images and carousels which are all well-produced or written. Part of the assumption of the thought experiment is that all things being equal it sometimes isn’t worth it to engender the added complexity and associated costs of producing a slick video.
Could a low-effort video outperform a single image or a carousel? Yes. Sometimes by a large margin.
I used to have a client in the vacation rental space whose best results came from a selfie-style video where he showed off one of the beach-side properties he managed and he spoke directly to the camera about the impetus behind his business and what he was hoping to achieve. He hit on all the points you should be hitting and encapsulated the value he was providing to his prospective clients in a really succinct and impactful way.
It didn’t take him much to produce the video. It was low-effort and only took 5 minutes of his time (time should always be assigned a $ value as well, but that’s a topic for another day). It blew our single image and carousel tests out of the water.
Conclusion about Facebook Video Ads
90% of the time, your job as a marketer is to minimize CPA and maximize ROAS. Want to ensure you’re always on the right track? I’ve engineered a few ChatGPT prompts that will help you analyze the relative performance between your single image, carousel, and video ads that way you’re always optimizing your ads in a way that’ll ensure the best results. Just signup below and you’ll get the prompts delivered straight to your inbox!
PS. If you’re interested in how I’m using AI as a marketer 👈 check out that blog post!
