Episode 149 | Posted on

The Past, Present, and Future of Facebook Advertising with Dennis Yu

As Facebook continues to change its algorithm, finding the right Facebook advertising strategy to beat its fluctuating system can be challenging. Dennis Yu, Chief Technology Officer of BlitzMetrics, talks about what works and what doesn’t in Facebook advertising. He shares some inside scoop even from when Facebook was still targeting college students back in 2007 up to now as it expanded and became one of the most used social media website to date. He imparts some wisdom coming from someone who has seen it all.

Taking down each of their own processes, budding Facebook advertisers will find some interesting advice and tips on how to build their own Facebook ads as well as some of the checkpoints to go through, covering topics from lighthouse clients to choosing the right business objectives. Dennis says optimizing your Facebook ads for the right conversions will be smarter and better.


Dennis, it’s great to have you on the show. Let’s jump into Facebook advertising, you know a lot about it and I’d start off by understanding how did you get this insider scoop into what works and what doesn’t work.

That’s what people want, all these insider secrets in this thing. We just happened to be there early eleven years ago, May 2007, when Facebook first launched the platform, technically Facebook Fliers, which are those things that you could buy for $0.50 targeting just college students was what they had. We were one of the early folks on there, we got to work with a lot of the engineers. Our buddy, Brian Rosenthal, built Power Editor because he said, “It’s a real pain in the butt to load ads.” We made a little scraper that would take three minutes per ad to load. If we wanted to load 300 ads, it would take all evenings and we let the scraper run all night.

Facebook, you know they’re a big company when their product people and ad people have to reach out to customers to find out how they’re using the system. When you have people on different teams, they don’t know what the other teams are doing. Facebook has been working on the Blueprint Courses, there are 80 courses that are all free, they take fifteen minutes each. A lot of the people in Facebook weren’t even aware that they had certain courses or things that are contradictory. We don’t work for Facebook, but I feel like we do because we speak at conferences every week. We get to bounce between all these organizations because we get free money from Facebook to run tests because they have new Beta things. You may have seen the new analytics they’ve been rolling out, especially one called Attribution, which used to be called Advanced Measurement. It was called MTA, which is part of their Atlas Sack Attribution, their whole ad server. MTA is multitouch attribution. We’ve just been lucky to have spent over a billion dollars on Facebook Ads in the last years. It’s cool being there and getting that access. We’re happy to share all these things and these decks. Michael Stelzner hits me up all the time saying, “Where did you get that deck? That thing you shared? I couldn’t find it by Googling it.” I’m like, “Facebook’s not doing a very good job of sharing.”

You have managed a billion dollars ad spend over the last eleven years. How much of that has been your own spent? I’m sure there’s a very small percentage, but how small? Have you spent half a million dollars on ads for your own stuff?

MS 149 | Facebook Advertising Strategies
All the work is in the beginning, once you get things set up, you just let it run.

I think we spend maybe $3,000 a month, you could multiply that out and that’s not even half a million. We treat client money like it’s our money and most of our clients come to us for performance. From an agency standpoint, very few agencies like to measure themselves on real performance or even get paid on a revenues share. That’s one of the things that we like because if you’re good, like Tom Breeze the top YouTube performance advertiser, he likes to be paid on performance so it’s less work. All the work is in the beginning, once you get things set up, you just let it run. You don’t have to do the agency stuff like have phone calls every week, answer random questions, and prepare reports. We don’t want to do stuff like that.

You don’t prepare reports and you don’t have weekly calls with your clients?

Some of them we take internal. We treat them as case studies, we call these Lighthouse Clients. Homestore, the largest furniture seller on the planet, they have 700 something stores. We will have calls with them, but it’s because we’re taking these processes that we’re using, documenting them, and putting them out there for anyone else that’s in retail to be able to follow. That’s why we can publish on Social Media Examiner and Digital Marketer, if it weren’t for the execution and having willing clients. You’ve probably seen our Golden State Warriors content that Facebook’s published, American Marketing Association. All these places are published because they’ve been willing to let us do that and say, “Last year we spent a million dollars and about $40 million of revenue.” Of course, in the NBA Championship that helps you out a little bit. You’re either selling your time or yourself, and the results. The people that are good at optimizing, they just don’t have the patience to want to sit on calls. We still prepare reports that are done by other people, but optimization is the thing where you do it as necessary. When sometimes there’s a big issue, there’s a big sale then you put in a lot of time. You don’t want to confine yourself to only weekly because sometimes you need to look at something every day and sometimes you don’t need to touch stuff for months.

What percentage of your clients are these lighthouse clients and what percentage are more whatever the other type is?

Most agencies don’t even have one Lighthouse, we probably have ten. A Lighthouse is one that meets three criteria. If you’re managing Facebook ads as an agency, you need to have a lighthouse. A Lighthouse is one where you have an orthodontist and it’s your star example, so that you can get more orthodontists. You can have 100 more of the same thing. We have Nathan Latka, he’s a speaker, author, entrepreneur, star and stage personality. We’re allowed to demo his stuff which makes him more famous. He’s like the Donald Trump of digital marketing. Anyone else who wants to be a figurehead in digital marketing, we can follow that same example. Lighthouses, you can’t have more than a few, if you have even one, you’re lucky. The other clients maybe there’s 100 other random clients.

Ashley Furniture is another one of your Lighthouse clients then?

That’s a lighthouse for all the other retail clients. A lot of these other retail clients don’t want other people to know who they’re using or they want to represent this as something that’s completely in house. The work that we did for WWE, which is the wrestling guys like Vince McMahon, didn’t want anyone to know, we couldn’t talk about that at all. We even flew WWE, their team, the [0:08:44] and a couple of these other guys to Facebook headquarters for a series of private meetings. We created a great case study on how WWE was using video and Facebook pages to drive sales to WrestleMania and merchandise, and the other top 50 website. Facebook is saying, “We’re willing to promote all this stuff, we’re willing to put it out there and uplift you ahead of digital and social.” Vince McMahon said, “No, you’re going to pay us to be able to use the WWE name because we’re a media company. Everyone pays us.” I thought, “Oh man.” We didn’t get any PR on that. The key is you have to find a lighthouse client because that’s how you execute, that’s how you get attention. We have a few high-power lighthouse clients. Facebook has to pay attention to you because they know that these are high profile in the media examples.

How many case studies from each of the three lighthouse clients, but you might have maybe a dozen other case studies of clients who are willing to go that route but aren’t willing to do everything else involved with being a lighthouse client.

Just because you have a case study doesn’t make it a lighthouse client. Just because you can interview them, just because they speak onstage doesn’t make them a lighthouse. A lighthouse has to have three components maxed out, three components of authority. One is they have to be dominant in their space, other people know who they are. Jacob Sapochnick, on Facebook he’s got the most fans as a lawyer and he’s driving the most leads and sales as a lawyer. He is a lawyer in his San Diego and immigration firm. He’s got tons of traffic, he’s willing to be a lighthouse and other lawyers can look to him as an example.

If you’re a lawyer, you’re going to say, “I’m going to trust this lawyer more than I’m going to trust this other random person who’s like working with five other people, they’re an ad agency or SEO consultant. This guy’s an actual lawyer. I can identify with him.” When you have to have the authority of who they are, they’re well recognized. Two is you have to have a checklist that’s documented. Step one, two, three, four, five that other people could follow those tasks. Three, it has to be on high profile publications, wherever the highest authority is. If it’s a social media case study, it’s got to be on Social Media Examiner. If it’s a Facebook ads thing, it’s got to be on Facebook’s blog. It has to be featured at F8, which is the annual conference. If you meet those three components of authority, which you can build over time. The many successes you have with clients, if you repeat them over other folks in the same protocol, you have what we call a recipe, which is a series of tasks that anybody that’s well trained. What’s one of your favorite dishes?


Let’s say that there’s some place in Brooklyn where you liked their pepperoni pizza. Have the Eisenbergs taken you to Di Fara and told you about how amazing it is? I went there with Jeffrey in Las Vegas, we need to drive way out there because they just opened a second store. They have a special recipe that they use, how they make the crust, how they source their food. Anyone who can follow that recipe will be able to yield the same result like any experiment. That’s what we believe that marketing should be. It’s not the magic of I got Stephan Spencer, Rand Fishkin and Neil Patel, I’ve got all these magic people. It’s that if I have the right ingredients and I follow the recipe, I can be confident that I’m going to have that result.

We believe all digital marketing should be based upon a recipe which is the actual authority. The actual authority is, “I can follow this checklist and I will drive leads at a certain cost per lead. I will get these results if I have the right goals, content, and targeting, which are the ingredients.” Which is true not just for Facebook, but it’s especially true on Facebook. It’s a big whammy if you don’t have good content. If you have all the other components of perceived authority with the actual checklist, then you have a low-risk franchise-able situation.

Back in the day we used to hang out at like Pinkberry. The idea of a franchise is that you can take that model and you can reliably scale it. The last thing that we want to do is “Let’s rely upon Dennis’ magic. He’ll take this difficult situation and try to figure out.” You know TV show House where the guy has to try to figure out why the patient is dying and they try all these different things. They figured out, “It’s because he stepped on a nail that was rusty that caused this other diabetic reaction.” I don’t like those situations. I don’t like the idea of the clock is ticking, and you need to figure out which wire to cut. Is it the green wire? There are three seconds left on the clock and you blow up. I don’t like those situations. I love the idea of someone’s coming in and they’ve all already got sales. They know what their goals, content, and targeting. We have a recipe and that recipe can be executed by someone else who’s certified in our program, we got a bunch of young adults.

We have no drama. It’s like doing Lasik. You’ve got these doctors, they’ve done 2,000 Lasiks and it’s not like any drama. Imagine I go, “Do you want to do Lasik with me? You can go to the other doctor who has all the machines and has done it thousands of times or I’ve got this new brand-new procedure. Would you like to try it? It could be risky but you want the latest new-fangled thing that no one’s ever done.” That’s what people are doing in digital marketing. You want innovation, you want to have the sizzle or the shiny red object. I don’t believe in stuff like that. I want to know something that works.

This is how you disqualify 95% of the people that do SEO, PPC, Facebook ads. You say, “I would love to work with you guys, but first, can you show me the checklist that you would follow step-by-step.” Then they make excuses, like, “This is our secret sauce.” I don’t want to do business with the Voodoo doll, witch doctor. If you don’t have a checklist, what assurance do I have that it’s going to work for me? It might’ve worked for this other guy because of this unique situation because they have some things that I don’t have or my situation is not the same. Not every patient that goes into the emergency room is going to take the same two pills and have the exact same procedure.

I need to know you have a checklist and a recipe for my particular condition. I need to know that you have a diagnosis and other analytics to analyze what’s going on and make sure you have this stuff that’s necessary. One of my friends, Mark Lackey, he has a phrase he uses all the time when he speaks on stage. He says “A prescription without diagnosis is malpractice.” That’s how we look at Facebook ads, people come to us. It’s all inbound. When people come to us saying, “We want to do Facebook ads.” We’ll say, “Let’s look at your goals, content, and target. Let’s do a little analysis, let’s figure out what’s going on,” and say, “Based on the metrics, we put the chart up, the x-ray. It looks like according to the x-ray and the blood, you have this problem. You got a broken bone over here.” That’s the analysis, and then the action, which is the treatment plan, is “We’re going to have this surgery for this particular condition.”

MS 149 | Facebook Advertising Strategy
If you choose an objective, that’s the goal. There is a necessary content and targeting combo that’s associated with that.

Everyone else has got a different broken arm, heart attack, gunshot wound. Everyone comes to the hospital with a different situation and here’s the treatment plan. It’s going to cost this much money, we’re going to add up all the stuff, all the pills, all the procedures, and this is the total bill. That’s when people say, “That’s a lot of money, I look at these different items and I look at the checklist that you got, you would execute. Let’s do it.” You get maybe 30% of the people that say, “I don’t want to do the heart operation. I want you to give me some Pepto-Bismol and a massage,” and we’ll say, “You can get that next door, but it’s not going to solve your heart attack problem.” It’s always the case on Facebook. Back to your question about Facebook, I love to talk about this part here because it’s 99% of the problem. Facebook has changed things because if you set up your goals, content, and targeting, the way they’ve changed the system in the last six months if you run some Facebook ads just in the last couple of months, see how the interface has changed. If you go in and select the business objective, like “I want leads, I want conversions, I want offers, I want store visits, I want video views, I want reach,” there are fifteen objectives. If you choose that objective, that’s the goal. There is a necessary content and targeting combo that’s associated with that.

99% of people that come to us for Facebook ads make this one mistake. They choose the wrong business objective, they don’t think they are. For example, they choose website clicks because Google AdWords is based on mostly like cost per click. They’re looking at their cost per click, they choose clicks because maybe they don’t have enough conversions because they heard, “I don’t have 50 conversions per ad set per week, so the optimizer doesn’t have enough time for the two-way learning process. Every time I set up a new ad set, I’m just going to choose website clicks.” They say, “I ran this ad. I’ve got a lot of cheap clicks, but it didn’t convert, Facebook sucks.” You chose the wrong business objective, so Facebook gave you the cheap clicks. They gave you what you wanted by seeking out people to just click on stuff like old people that are on their mobile phones, not people who are going to buy. It’s an audience, Facebook subtargets.

The second biggest problem is that people over target, meaning they narrow targeted down. Just because you can target 35-year old females in Salt Lake City that have a poodle that’s blind with diabetes, you don’t want to do that. You want to target broad audiences. There’s this thing called the Audience Meter. When you make an ad, there’s this little thermometer thing, if the arrow is pointing in the middle where it’s green, that is the audience size. People will say, “What’s the audience size?” We used to say, “10,000 maybe,” unless you’re a local business and it’s smaller, you’re super niche and you’re targeting a particular thing like personal injury attorneys.

Facebook has a dynamic audience meter and depending on what you’re trying to do for that objective, that little meter will be either way to the left where it’s yellow and it’s like, “Not big enough,” or it’ll be way over to the other side and red, “You’re trying to target the world, probably too big.” The reason that people screw it up on Facebook ads is that they’re not using the system the right way. I empathize with Facebook, they’re like, “Facebook changes all the time and it’s so hard.” No, just stop screwing around, put in your actual objective, don’t create too many ads because the system can’t learn. Don’t listen to these Facebook ads experts that are trying to give you some hack. We’ve learned that if you do it the right way and have simple ad sets, the system will learn and optimize until when you have a winner. You duplicate that ad set and target the world. It outperforms anything else you could have ever done. There’s no targeting at all because the system learns on conversion. If your goal is conversions of course, and the pixel is seasoned.

Don't listen to these Facebook ads experts that are trying to give you some hack. We've learned that if you do it the right way and have simple ad sets, the system will learn and optimize until you have a winner. Click To Tweet

How seasoned does that Pixel need to be?

I like to see 200 conversions in the last month. Other people will say technically a custom audience, you only need 200 and you can upload an email or a website pixel conversion audience. Facebook is using all the pixel data, when you drop a pixel on your site, like where you put the Google analytics to drop the Facebook pixel, Twitter pixel, and the Google AdWords remarketing pixel, stick them inside a container for your Google tag manager. They’re using all that data there, they’re not using only ads data. You’re giving yourself an advantage when you have the pixel even if you’re not running ads yet. People are like, “I’m not ready to run ads yet. I’m going to do the Pixel until I’m ready to run ads.” No, get the pixel on there now. Let the system learn, it’s still learning. Why wouldn’t you want to collect the data, are you afraid of giving Facebook the data?

I have given that very advice to clients who aren’t ready to start advertising. This is an asset that you are squandering. You could build the asset, that asset being visitors who have come to your site, who are logged into Facebook. You have a retargeting audience ready to go as soon as you’re ready to start advertising, you have that audience for how many days. Is it 60 days?

There’s a decreasing window that they’re able to learn faster, but generally the last two weeks. I like to give them a month just because I think Facebook’s getting smarter about things like seasonality. If your business performs differently on the weekend or in the evening or dayparting, the algorithm is learning from that pixel data. When you create new ads, it’s a two-week learning phase. They’ll even say when you log in to your ads, “This ad set’s still in the learning phase.”

For our audience who aren’t familiar with dayparting, probably some of these terms we should define.

If you’ve done AdWords then you’re in luck because you have the same three-tier structure of campaign Ad Set to Ad. In Facebook they call it an Ad Set, but that’s because they didn’t want to say Ad Group which would be copying Google. It’s the same thing. The ad set level is where the testing unit is, that’s where your goals, content, and targeting mix. That’s where Facebook quickly decides if you’ve got three or four ads in there, which one’s the winner. It frustrates people because people are like, “I’ve loaded up three ads and that just killed the other two,” because it’s quickly learning which one is winning. “The one that got killed has a lower cost per click,” but it’s got a lower conversion rate and it has lower relevance. There are these other factors like you need to look at and see what the thing is doing. Dayparting is when you set a lifetime budget, you can say, “I want to run only on Saturdays and between 5 PM and 7 PM because all-you-can eat buffet, that’s only open on Saturday night.”

Dayparting means you can only spend in the same window just like you have on Google. Most people shouldn’t daypart when they daypart. Most features that are there, people should not be using, which I know is crazy because we’re the folks who are known for explaining every new feature that comes out. Just because your audience is more likely to buy during certain windows doesn’t mean that you should shut the algorithm out. If you let the algorithm do the work for you, the traffic you’re going to have from 8 PM to 6 AM is going to be relatively low anyway, you’re already dealing with a smaller audience. Even if that audience converts less, the fact that there’s less competition, the fact that Facebook will allocate to where it converts better is a true advantage.

The other second biggest mistake that people make is when they don’t use automatic placements, which means they let Facebook choose between all the placements that are possible, “The newsfeed better, audience network sucks.” Allow Facebook to optimize across all these places. Retargeting is people came to your website or they’re in your email list or they’re somehow in your data and you’re trying to get them to do something else in a certain time period, why wouldn’t you want to retarget them across everywhere else? Don’t shut them out of certain placements, then it’s more work on the algorithm or when you narrow your audiences too far.

It seems counterintuitive, but less targeting can be better because then the algorithm takes over, does a better job, and get you a better cost per lead.

People over-optimize, they keep trying to touch their campaigns every day, which resets the ad rank. Let the thing learn. If you keep touching your ads every day and Google AdWords, you just keep knocking yourself out of the auction once. It’s like pulling the plant out, you’re trying to grow some tomatoes, you got to let the thing sit in the ground for a little bit, let the thing learn, don’t yank it up by the roots every day and see how it’s doing. People have too many ad sets, they’re touching their campaigns too many times. They say, “Facebook doesn’t work,” they keep touching their campaign more often. Simpler ad sets, better create it on video. Video that has a caption that’s in square format which takes up twice as much space in the mobile newsfeed. Square format does better than landscape by far with you put video. You have to have a video. If you’re not doing video, you’re not even in the game on Facebook. They take their TV ads, try to load them on the Facebook, and wonder why it doesn’t work. 80% of people are watching stuff with the sound off. That’s why it doesn’t work.

What percentage improvement will you have by going from landscape video to square format video?

It depends a lot. It’s whether there’s an expectation of that user on sound. When we’d run ads for the Golden State Warriors, there would be a highlight play of Stephen Curry making his crazy half-court shot three pointer. People don’t expect the sound to be on, a lot of people don’t even want to hear the announcers. They’re willing to watch it in that mode. If you have a longer video, you want to have it show on Wi-Fi, means it’s more likely to be in the evening so you don’t have to daypart, then landscape’s going to work a little bit better for you. People are more likely to sit down for five minutes to watch a video than fifteen seconds with the grocery store or they’re just at a red light and they’re just checking their phone, teenagers playing Pokemon GO. Generally, 20%-30% improvement in terms of view through rate, click through rate, cost per click. That could be the difference between something that’s converting or not. If it is profitable, you can jack up the budget on it.

Let’s say that there is a likelihood that people aren’t going to listen to the video, they’re just going to watch it with the sound off, it must be important then if there is a narration or audio to have subtitles.

Facebook has automatic captioning when you’re uploading videos, you have the option to generate captions with that little magic wand and it allows you to change the words. People mumble, Facebook will get some of the words wrong and we use acronyms too, they’re a little automatic translator thing. Google’s YouTube captioning thing is not too smart. Neither of them are very smart, you have to go in there. One of our clients, they’re the number one or two mortgage company on the planet. They were putting a video out there and they use the automatic captioning. The words that he said were, “I love analytics to optimize to be able to get more leads for my mortgage brokers.” What the captioner did was, “I love anal.” We were laughing at that, we wondered like, “Why is the view-through rate on this thing so high? In the first couple seconds as you’re scrolling by, you see the guy all excited saying, “I love anal.” You’re going to stop and see like, “What’s he saying?” The view-through rate from three seconds to ten seconds was low and we were like, “Why is the view-through rate so low because they were expecting something else?”

MS 149 | Facebook Advertising Strategy
The average person is consuming content in the mobile news feed 40% faster.

I don’t recommend that tactic. That did happen to generate a high view-through rate initially from the impression to the three seconds. Facebook’s now counting a video view at two seconds, which increases the number of apparent views that you’re reporting. I understand why they’re doing that because the average person is consuming content in the mobile newsfeed 40% faster. If you were to walk with your fingers, how many feet does the average person scroll down the newsfeed per day? 300 feet. People are scrolling so fast that Facebook is now counting a video view of two seconds. They’ve done the research to show that it does actually get people’s attention, they’re not going to stay around. They’re saying put out fifteen-second videos.

They have these tools, the Facebook Mobile Studio. You’ll see in this microsite that has ten different tools that are for free, that help you make fifteen second videos, that adds cool little effects, captions, and it creates slideshows based on you upload a set of images. There’s all these different tools and you have to have things that are visually appealing that they call Thumb Stopping Content. This means you’re scrolling, “What’s this?” then you stop for like fifteen seconds, then you keep going. I thought it was like this Millennial Snapchat ADD thing, but it’s actually people of all ages.

I think we all need social media detox.

Facebook doesn’t like this whole Apple thing, like shutting you out or measuring how long you’ve been on social media. The average person spends two hours a day on Facebook, almost 35% of their mobile time per day is spent on Facebook. That includes Instagram, WhatsApp and Messenger.

I deleted Facebook app off of my phone because I cannot be addicted to that. That’s not a good use of my time.

Marc Benioff who founded Salesforce loves to brag on Facebook saying that, “Studies have shown that the brain patterns when you’re on Facebook are the same as an addict when he takes a hit of morphine.” The same parts of the brain light up, it truly is addiction behavior. If you’re an advertiser and you’re doing neuro marketing because you’re trying to influence people to buy you, you want to create addicts, you want to take advantage of that. You want to let the algorithm find the addicts, which are called loyal customers. You know how humans anthropomorphize saying, “My dog loves me,” or “My dog missed me.” They’re trying to put words in the dog’s mouth but it’s just a dog. Scientists have hooked up the electrodes to dogs’ brains and at the same time they also show couples when they look at pictures of one another versus pictures of random people. The patterns and the dog’s brain fire the same way when the dog looks at the owner, as when a husband looks at his wife of ten years.

The focus on Facebook to convert on ads is all psychology. The optimization is all being handled by Facebook. We don’t have to talk about how the auction works and how it’s a second price auction, ad rank is calculated by your relevance score times your bid, quality adjusted. You don’t have to worry about the mechanics of that anymore. It’s not this technical stuff anymore because the algorithm handles it for you. It’s all know automatic transmission if you will instead of manual.

You’re the client and you work with an agency. That agency is keeping stuff from you, working behind a curtain, and not using your own account. For example, you can’t say what they’re up to.

Facebook has not allowed that. They’ve made changes to their partner program, where they have to report on these different items. If you’re a small business and you don’t want to go create your own thing, you can do pass through billing. But they must make that data available if it’s someone else’s account. If the agency makes the account in your name, you cannot transfer those custom audiences. The audiences are tied to the pixel, the pixel is tied to the ad account. You are screwed if you want to migrate. You’ve got to rebuild all those audiences, rebuild your campaign and ad history. You cannot transfer things.

You used to be able to do that a few years ago. We’ve had the same issue for a major electronics company where their agency was flimflamming them. They didn’t even want to give us access, but we found a backdoor to get access because Facebook gave us a little hint. We were able to get in and we will see nothing was going on in the account. They were only giving us reports that they ran through their own little third-party tools. It’s third party tool, that’s the issue. It’s the fact that there was this hiding going on and the agency wasn’t allowing the client to talk to Facebook. If you’re spending at least a million bucks a month, then Facebook will run these different reports for you, like a QBR report, a competitive report, the different reports like how your stuff is doing. They’ll make recommendations for free. Agencies love that stuff. That whole agency program out at Chicago that they’ve been building, that’s fantastic.

If the agency doesn’t have access to Facebook’s resources, they don’t know what the latest stuff is. They don’t have the latest decks. They don’t get access to the Betas. They don’t have Facebook to help optimize. I would question whether that agency knows what they’re doing. Maybe they’re a media buying agency and they specialize in outdoor and building websites and doing all these other random things, but they don’t know how to do Facebook, that’s usually a bad sign.

Can you define the QBR report for our listeners who don’t know what that is?

QBR is Quarterly Business Report. They will look at how you’re performing against various objectives. The ones that you’ve chosen, they’ll provide recommendations. They’ll have a bunch of colorful charts showing how you compare against six other companies that you choose in a market basket. They won’t tell you the performance of each individual competitor for privacy reasons, but they’ll give you the aggregate. They’ll say what’s their average CPC and what percent of their ad spend is on website conversions versus lead gen, what percent are using Canvas, what percent are using the reach objective, and what is their average cost per lead, cost per reach, cost per whatever it is. What are their spending trends in Q4, if they’re doing Black Friday, what does that look like?

They’ll give you a series of recommendations and if you spend enough money, they’ll even bring in things like Creative Shop, in New York and London where you can fly in for a half day and their team will build a creative for you, help you film, do all this stuff. It actually is Facebook’s own internal agency to help out brands. They don’t want to mention it as such because then it makes the agencies afraid because the agencies are like, “I can’t compete against Facebook because first off, it’s Facebook offering advice on Facebook and they have all the internal tools. Second, they’re doing it for free.” What are you going to do about that? You can’t beat them there. Their stuff is better and they’re doing it for free. Google does the same thing too, but not as good. Agencies don’t like Facebook and Google because they do this thing, but the reason Facebook and Google are doing it because these agencies are doing such a bad job.

Let’s go back to the topic of a documented checklists and procedures that are reproducible. If you could create the ideal scenario for a listener in terms of standard operating procedures, video libraries, and checklists, what would that look like? Whether they use an agency or they do the Facebook ads in house, what would that look like?

A general framework that’s going to work for everybody, whether you’re doing eCommerce or you’re the local veterinarian or you’re a consultant or whatever. You need to follow this six-phase process that we call the Social Amplification Engine. The first phase is plumbing. It means your pixels, your custom audiences, your Google Analytics, your UTM parameters, everything is working properly. That could even tie into things like Google AMP and Facebook Instant Articles, the paid side is Facebook Canvas. That’s where people that are advanced where page load times are important or IT is screwing you, so you use Facebook Canvas to generate landing pages. It’s a landing page generator. Facebook Lead Ads, which is the getting around landing pages where you have IT, you don’t know how to use lead pages or ClickFunnels. That’s plumbing, getting everything set up so you have all the data. If you don’t have other data, you can’t move to phase two, which is goals.

Goals is all the measurement. When you need to have a clear cost per at each of the three stages of the funnel. Facebook operates on a three-stage funnel. They call it awareness, consideration, conversion, top, middle, bottom of the funnel. We call it awareness, engagement, conversion, which is the same thing. You’ll see that when you’re sitting on Facebook ads, you’re going to choose that business objective and they fall within one of those three stages in the funnel. You need to know what that cost per is. If you don’t know what your cost per lead is, you need to figure out what’s going on from your lead sale conversion. You need to know your lifetime value, back it out to your conversion rates, cost per click, all that stuff. If you know what those are, then you can move to content. Content is what I need to generate at first touch, my high authority content, different kinds of video. What content do I need to generate a lead? Here’s the lead form, here is my offer, here’s my lead magnet. I’m trying to get them to all my phone number.

Facebook operates on a three-stage funnel. They call it awareness, consideration, and conversion. Click To Tweet

Then conversion, “What am I selling? What’s the price? What do I say to get them to buy, provided that I’m remarketing from people that have been my website, from people that have filled out a lead for them, from people that have watched one of my initial videos?” Content flows directly from goals. Targeting is when you are sequencing people down the funnel. We talked about goals, content, and targeting is your strategy, that’s the middle of these six phases. If you have these different pieces of content that are sequenced by goal, then the targeting is to bring people between those stages in the funnel. From the top to the middle, from the middle to the bottom, from people that have watched your initial video, your why video, your introduction, the things that are getting their attention. You’re going to remarket that down into your lead magnet or to your website article or to your Messenger Bot or to whatever that mid funnel engagement is where people had to click on something.

You’re going to remarket from the people that engaged there, and those are all engagement audiences. Most people think custom audiences are only website abandonment. No, that’s only one thing. You can remarket off the video views. Almost nobody’s using that. Remarket that down into the actual conversion item where you’re choosing website conversions or leads or the thing where you’re making money. You’re going to remarket off anyone that’s had one or multiple touches in X number of days. That’s targeting. You have amplification, which is making the ads in a certain structure. We talked about how the ad set is so critical. Optimization is your regular tuning cycle, you’re using metrics analysis action. It could be weekly, it could be whenever the thresholds go out of whack, when your sales are not working, when your conversion rate declines, when you can add more budget, when all the different things that you do for tuning. That’s the six phases we call that the Social Amplification Engine.

There’s plumbing, plumbing proceeds goals, content and targeting, which is your strategy. The combination of those is your funnel. It’s your strategy. The last two phases are amplification, which is making ads, we call it amplification because that’s how you’re increasing what you have this working, including gathering feedback, and tuning landing pages. Optimization is what I need to do to scale it. We have a landing page on that, it’s called the Social Amplification Engine, just go to BlitzMetrics.com/sae. It’s an evergreen strategy. When you do this, you’re not constantly being buffeted by “Let’s look over here. The squirrel over there, shiny red object over here.” You don’t have to worry about things that are changing because your goals, content, and targeting are channel-independent. If it works on YouTube, you’re going to tweak it to work on Facebook. If it works on Facebook, you’re going to figure out how to copy that towards your landing pages, a slightly different format. Your goals, content, and targeting shouldn’t change. If they change, then your business or a startup, you don’t know who your customers.

How does this show up in the form of SOP, Standard Operating Procedures or checklists?

We were doing the checklist on every one of these phases. We have a plumbing checklist. We have a checklist on how you set up goals. We have a checklist on how to tell when your metrics are out of whack. My co-founder wrote a book called The Standards of Excellence, which goes over Facebook benchmarks. You’re looking at your cost per video view. Let’s say it’s $0.4, is that good or bad? You’re generating leads on Facebook $2, is that good or bad? What’s the average? We need a benchmark. You need to benchmark against your data and benchmark against other people in your industry. The checklist should be driven by if then statements.

If your conversion rate on the landing page is low, then this is what you do. If you have run out of budget but it’s still converting well, then I’m going to increase the budget by an extra 20% and monitor it for the next week. If my average watch time from three to ten seconds, if the drop off rate’s greater than 50%, then I need to examine that content, try to remake it, and figure out what it is. Maybe there’s someone that puts a they put a logo in the beginning and the company logo goes across and they lose people. Checklists should all be event-driven. We have checklists for every one of these things, we publish all of them, they’re not a secret. We even put most of them out there for free because we want people to take a look. You want us to implement the checklist, then you can hire us, let our young adults execute the checklist. They don’t do consulting, they just execute checklists.

Are some of these checklists going to be available somewhere?

You can go to BlitzMetrics.com. Our favorite one in terms of audience feedback is Facebook For A Dollar A Day. It’s an overview of the major checklist before you get real deep into optimization. Facebook For A Dollar A Day, that’s FDD, every one of our checklist is on a three-letter acronym. SOE, Standards of Excellence. SAE, Social Amplification Engine. PBG, Personal Branding Guide.

Are you using special software for these checklists, Process Street or anything like that with all these if-then statements?

We like Process Street. If you’re just getting going and you don’t have complex logic, then you could use something like that. We integrate Infusionsoft with our own dashboard with Memberium and LearnDash. Some components that we use for execution like Basecamp, TimeCamp and five or six other things, but we are in the business of producing checklists, so much so that we even have a checklist on how to build checklists.

I’m actually using a lot of these tools that you’re mentioning like Infusionsoft and LearnDash, Memberium. You’ve got this army of VA’s. You’ve got a process for hiring VA’s, for onboarding them, for screening the candidates that may or may not become VA’s for you. Let’s talk about that for a little bit.

We love virtual assistants. The folks in the Philippines are fantastic. I know that you can use third party services, but we just like to build relationships ourselves. We find that these people are more loyal and it’s because they’re loyal that you can afford to invest in training a VA, to be able to execute digital plumbing, and do it over and over again. To be able to build WordPress sites or tune Infusionsoft campaigns and do it over and over again. If you’re trying to try to train up people in the United States, they’ll learn for a month or two, and I’m pretty soon they’re off doing their own thing and they’re making $50,000 a month supposedly or doing eight figures deals two months later supposedly. What matters is having people who understand that there is power in mentorship, that servant leadership is important, that taking care of the team is more important than your own lifestyle and Lamborghinis.

Taking care of the team is more important than your own lifestyle and Lamborghinis. Click To Tweet

We have people go through an onboarding process. Our friend, John Jonas, founded OnlineJobs.ph, it’s great when we have the advantage of knowing the people that run Infusionsoft and who built Memberium, built like all these other tools because we create training together with them which reinforces the authority that we talked about. We have six primary positions that people can apply for, which correspond to basically goals, content, and targeting and some other back end things. These VA’s execute simple tasks like editing video. They’re basically producing documents and content. They’re assembling these reports. You need VAs to do it initially because software is going to do the analysis. Analysis is more important than the report generator. Google Analytics, they chart analytics there, it’s called Google Chart Making, Google Reports. If you don’t want analytics, you need people that will do those things.

The VAs, they go through a three-phase process to be able to apply and qualify which ends with an interview. We have VAs that are managing VAs, which is great. We have VAs that are screening the VA process. If you’re applying to be a general VA, you’re able to set-up meetings and posting to Basecamp, and do the 95% of grind work that’s necessary when you’re handling documents. When the VA’s initially apply, they have to go through this barrage of watching videos, reading articles, making one-minute videos. We bury in the middle of the job posting, “If you’re paying attention in your application, please use the word rabbit.” Anyone who applies, if they’re not using rabbit in the subject line, we’re going to disqualify him, which disqualifies about 80% of the people because we know they’re not paying attention. When their subject line says rabbit and then they say, “Here’s my one-minute video and here’s what I thought about this. Here’s my background and here’s all the other things you asked for.” Our system says, “This looks great.”

Onto the second phase, “We want you to make a one-minute video about this.” Let’s say they come in and they’re qualifying to do plumbing. We want to see them install the Google Analytics Pixel and AdWords Pixel, they have to build a Facebook public figure page. We have them do all the things that they would have done for a client. They go through some of our training, we unlock a couple courses for them. They have to apply in the next day saying jackalope and the third one could be like antelope. We know where someone is in the process based on the word they’re using un the subject line. We have six different roles and we have three different key words for each face. We have eighteen keywords. Our folks can quickly scan and see how many people we have. At the last phase they have an interview with one of our senior VA people, they have an interview with one of our US-based specialists. If they pass that interview, they start as a level one and there’s a six-level system. They started at $3 an hour, then they moved to four all the way up to $15 an hour.

That’s a lot for the Philippines, $15 an hour.

The average in the Philippines it’s $350 a month, which is just over $2 an hour. One of my ex-buddies, his name’s Mark, he ran social customer care for Walmart. He’s responsible for handling all the people that say, “Walmart is killing middle American, putting people out of business and is evil.” I put a post out there because Logan and I were in the Philippines. I shared a picture of us in the Philippines hanging out with our VAs. We love them and how happy they are. He said, “These people, they’re able to provide for their families and they started out making $3 an hour.” This guy replied, he’s got 150 agents that manage all the hate on Walmart social pages. He said, “How dare you? You’re exploiting labor.” I said, “Excuse me, you of all people to be throwing rocks. You live in a glass house.”

All our VAs came in, John Jonas came in and all these other people came in saying, “These people are making $350 per month just like they have a degree, work in an office. Now they’re making more than that and they’re moving up. We have some people that started with us and now they’re making $10 an hour a year later. How dare you hate?” The VAs were coming in and saying, “How dare you hate? We’re treated so well, who are you to try to judge us?” This guy said, “I was just pointing out some facts that if you’re fair and you’re paying a video editor in the United States should start at $20 an hour and then you should pay them $20 an hour.”

Having your own VA saves you so much time and money. Click To Tweet

It doesn’t work like that. Cost of living is different. People in the US have to do more client service, it’s more client facing. The VAs are not client facing, they’re not obviously talking to folks on the phone. If you don’t have a VA, hire one. $500 a month, full time. Having your own VA saves you so much time and money. If you are hesitant about hiring somebody, you don’t want to outlay a measly $500 a month for someone working for you full time who generally don’t value your time. Go and practice by hiring and pay $5 to do micro tests for you, so you can be a good delegator. Then you can hire your own VA and they will be a multiple on your time. Think about like an extra hour of time you get back per day. Is it worth $500 a month? Then you get addicted and hire ten of them.

MS 149 | Facebook Advertising Strategy
If you are hesitant about hiring somebody and you don’t want to outlay a measly $500 a month for someone working for you full time, go and practice by hiring and paying $5 to do micro tests for you.

I have a small army of VAs and it’s been transformative for my business. Let’s jump back to this concept of Facebook for A Dollar A Day because that’s something that you have spoken about for a number of years. I wanted to provide our listeners a little bit more detail on that strategy because it’s such a good one.

It works. The funny thing is that we get a lot of haters for people that have never done it because it centers around making one-minute videos and boosting posts for a dollar a day. Video of course is key because it’s lightweight, it simulates what a friend would see in their newsfeed. When people are scrolling through their news feed, they’re seeing what their friends are doing. You have to disguisable friend-level content. When you have little snippets and you put them out there, you target custom audiences, you target look-a-likes, you target fans of Stephan Spencer. Maybe I interviewed Stephan, and then I’m going to target all his fans. Then I’m creating inception. If I’m speaking at Digital Marketing Summit, then I’m going to target all the people at Digital Marketing Summit who were in Denver for the conference. If I’ve published a post on Social Media Examiner, then I’m going to target the fans of social media examiner. What I’m trying to do is extend what I’m getting the organically. The people will say, “Why would I want to pay the send money to Social Media Examiner? They’re already putting it out themselves and I’m getting them.” It’s for the same reason in AdWords, you spend money on your name, to protect your name. You’re going to get more traffic out of it. You’re amplifying something that’s already good and when it’s good, you put a dollar.

First you put a dollar day against the test, taste it, see if it’s working, see if the algorithm penalizes it. If you get good engagement, if you’re building good remarketing audiences, do those remarketing audiences convert. If it’s working, good, then you’re going to put another $30 for another 30 days against it. If it’s still good and then you might extend it for another 100 days for another $100, another $300 for another 100 days or another $1,000 for a year. Some of these posts, we spent $2,000 and they’d been going three years. A lot of people like big brands, we’ll look at this and say, “This dollar day thing. That’s only for people who are motivational speakers or small businesses that have only a dollar a day.”

It’s for any business because over the course of time you’re testing, 90% of your posts are going to fail. I don’t care how good you are, 90% of your posts fail. They just do. You might think they’re good, but let the data tell. Over time, you put out 50 different ads, provided they’re decent. Five of them become good and they become part of your greatest hits, which you allow to live evergreen forever instead of constantly trying to make more stuff, Sisyphus rolling the ball up the hill. Now you’ve got dollar day working for you because those are building remarketing audiences at the top in the middle of the funnel that you remarket into your conversion ads. We all know our conversion ads are remarketing audiences work way better, why wouldn’t you try to build the right remarketing audiences? Other people that haven’t tried it and say, “Boosting posts don’t work,” or “I use Power Editor or Ads Manager allows for all kinds of more power and I can choose different business objectives.”

All that’s true, but how often are you in there testing out different kinds of content? You need lightweight ways of testing content. The dollar a day strategy allows you, especially with video that’s under one-minute videos it works well, to show you what is going to work is. I don’t care how good you think you are, how good you think you know the audience, when you put stuff out, it’s just a very lean testing strategy. You find things that are working then, “I’ve got a video of Logan. He’s in front of the glacier and he’s talking about what it means to live the laptop lifestyle and managing a remote team.” That works well. All right, then you should make more videos in front of the glacier talking about that topic or make videos in front of the volcano topic about the topic or make other videos about different topics in front of the glacier. Other things that are similar to the thing that works.

Larry Kim calls it Unicorn Children. You have a winner try to make something similar, usually the variants are going to be in the video. Most people that are PPC minded are all are constantly thinking about changing the target. No, it’s usually the video, you probably have the right target. Facebook’s doing the targeting for you. If you’re using lookalike audiences and broad audiences where they get a sub target based on conversion, usually the issue is you got to make better content. A Dollar A Day helps you figure out that right content. It’s just a matter of having the VAs do the tuning because I don’t want to be in there and tune. It’s fun to produce the content, shoot a video on your phone is fun, post something like a meme. Some people call it a quote card, it’s a quote with some inspirational picture. The optimization, which is 90% of the work, I don’t want to go on there and do that. I’d like to make a mess and have other people clean up the dishes. The VAs will do that for you, provided you have one that’s trained in your system.

Or you can hire a team to implement the Dollar A Day strategy for you?

That’s what a lot of people do, but either way we’re happy. You can get our guides and train your VAs on them and manage your VAs. If you’re an agency, you probably want to have your own team, you start with one or two VAs until you have an army of them. People are like, “I just see all the stuff that you’re doing.” You mark it up, you’re charging somebody $5,000 a month, your cost might be $2,000. You don’t want to rip them off, you want to deliver the results, but then you don’t have to be the one doing it because your time is obviously way more expensive.

If somebody wanted to white label your services and offer a Facebook branch of their business, let’s say they are some sort of agency or they do billboards, do you do that as well or do you just work with clients?

We love working with other agencies, but it’s not the thing where we can partner together because they have to be competent in our process and the six-phase process. Otherwise it’s like, “Let’s partner together. Every time I have a call, let’s get on the phone and you joined the call. You give us a free hour of consulting every time and help close the deal.” That’s not how it works, you have to get qualified in understanding the strategy. We’ll do the tactical execution, the implementation, but you must be able to talk about the strategy competently. You’ve got to get trained and be a certified agency to be able to white label.

Most agencies they would rather partner with us because then they can say, “We’re a Blitz-certified and we partner with Blitz.” Blitz typically works with the bigger companies, but we’ve created special processes and integrate what we’re already doing. We’re already doing AdWords with you and we’re just adding in the Facebook component. We’re already building websites, we’re already a video production agency, we do all the creatives and we’re partnered up on the paid side. You have one seamless process, we like that because we don’t want to do account management, we want to lead agencies do that. We want to do implementation. Young adults usually suck when it comes to client management.

What’s the average age of one of your team members?

Maybe 23, we have some people in their 40s. We have a mix, but most of them are 18 to 25.

I’ve got one more question for you. It’s a two-part. First part’s easy, are you Facebook-verified? What’s the process to get Facebook verified?

I shudder when people ask that question. I know I’m Facebook-verified, which is a blue check mark. You can get a grey check mark, which is for local businesses, which is easy to get. A blue check mark, it’s where other people may want to copy you. There was somebody who made another Dennis Yu profile, they actually made it as female, and they started friend requesting all the people that are in. They got up to fifteen friends of mine and the more mutual friends that this fake Dennis you profile had, the more other people would say, it must be legit. It copied my profile picture.

It’s the same thing as Wikipedia to be notable. I don’t think there’s even a form anymore, maybe there is where you can go and apply for this, but you’ve got to contact Facebook through your account manager if you’re spending a lot of money. There’s also another group where it’s called Facebook Media Partners. We’re one of them and you can make requests on behalf of your clients, but they’ve got to be a client. It’s the same process for requesting Instagram verification, which a lot of people who want to be influencers, but the real thing, it’s a boasting. It’s a mark of pride where people just want to have it among their peers, but it doesn’t generate business unless you’re a speaker, author, coach, then it looks more prestigious. For the average consumer, they don’t know what that means. I don’t think it’s worth chasing.

On Twitter, there are some benefits with getting Twitter-verified that are pretty cool, but that’s a totally different direction.

MS 149 | Facebook Advertising Strategy
You’ve got to contact Facebook through your account manager if you’re spending a lot of money.

Facebook does give you access to specific tools. I think Facebook Creator might be available to non-verified now too, I’m not sure.

Isn’t there like a Mentions App for verified people?

If you’re verified, you can choose to have the blue check mark on either your profile or your public figure page. Facebook recommends your public figure page. You have 5,000 friends as your limit, but if you’re a legit celebrity then you want to have your blue check mark on your public figure page, which is a business page that has your name. It has your picture, it looks like a profile.

Where would folks go if they wanted to work with your company or learn from you through your online courses or some of your information products?

The best way to find me is not on Facebook. Go to LinkedIn and look for me. You can connect with me there. I think I had 15,000 connections, you max out at 30, I still have plenty of room.

If they just wanted to work with your agency, what would they go to? BlitzMetrics.com?

Yes. They can hit us up on our Facebook page, on LinkedIn. Hit us on any channels, we reply. Twitter is noisy, but we’ll still reply to messages.

Thank you, Dennis. Everyone, I hope you will take advantage of this wealth of knowledge information that you just got from this episode and make some money with it.

Important Links:

Your Checklist of Actions to Take

☑ Create a protocol or checklist of strategies. Use this as a universal guide of tried and tested tactics that serve different types of clients.

☑ Determine the right Facebook ads strategy for different types of clients. Digital marketing is not a one-size-fits-all industry. Make sure that my strategies are well-tailored to suit my client’s needs.

☑ Find the right target audience size. My Facebook ads audience should not be too narrow or too broad. Focus on specific people who are the most likely to respond to ads.

☑ Don’t create too many ads. The Facebook algorithm needs to fully understand my campaigns in order to optimize them.

☑ Test a couple of different campaigns and see what works best in terms of cost per click and conversions. Keep repeating the best ad for as long as it gets results.

☑ Use the Facebook pixel on my website to get a more comprehensive view of my website visitors. The more information I have, the better ads I can create.

☑ Utilize video in my ads. Square, 15-second videos get more views and engagement from viewers.

☑ Spot a lighthouse client that can be good for my agency. Their authority will help me expand my reach when it comes to networks and potential clients.

☑ Ask my clients if they want to be a part of one of my agency’s case studies. Case studies are great for showing others what my agency is capable of.

☑ Get a copy of the course, Social Amplification Engine, and start amplifying my Facebook ads skills today.

About Dennis Yu

MS 149 | Facebook Advertising Strategy

Dennis Yu is the Chief Technology Officer of BlitzMetrics, a digital marketing company which partners with schools to train young adults. Dennis’s program centers around mentorship, helping students grow their expertise to manage social campaigns for enterprise clients like the Golden State Warriors, Nike, and Rosetta Stone. He’s an internationally recognized lecturer in Facebook Marketing and has spoken in 17 countries, spanning 5 continents, including keynotes at L2E, Gultaggen, and Marketo Summit.

One thought on “The Past, Present, and Future of Facebook Advertising with Dennis Yu

  1. Hey Dennis, Great post. Really helpful for me, as a newly started real estate firm we are currently doing social media marketing in Sunshine Coast region to promote our brand in our location. Here I got great understanding on Facebook advertising which we can implement in our marketing. Thanks for sharing.

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