Lowering Customer Acquisition Cost on Facebook
FarmLogs is the leading farm management software in the United States offering products in the operational, agronomy and marketing areas of running a farm. I joined FarmLogs in 2016, about 4 years after the company was founded, where they roughly already had 150k users on the platform.
The challenge was to grow their Facebook customer acquisition channel while lowering the CAC (Customer Acquisition Cost) lower than $20. This was a challenge because they had spent over $1M in this channel and targetted the farming audience for a few years already on a regular basis. It is safe to say that if you were a row crop farmer in the United States and had a Facebook account you would have seen a FarmLogs ad at some point. You can imagine, as a growth person, the challenge this represents.
Platforms and Tools Used
- AdEspresso - 3rd party Facebook ad management platform
- Facebook Ad Manager - Facebook's advertising portal
- Facebook Analytics SDK - Native mobile analytics for user reporting back to ads
- Segment - Data aggregator and distributor
- Google Data Studio - Visualization of our campaign performance
To set the stage FarmLogs is an app that runs on desktop, mobile, and native mobile apps. So acquiring customers can be done through desktop or native mobile ads. So if you know anything about recent years with the proliferation of Facebook ads the premium on the web as increased tremendously. The reason being, there are more advertisers (competitors) and fewer users on Facebook web (inventory). So in principle, this is a supply and demand issue to advertise on the web in the Facebook newsfeed. More competition and lower inventory.
With this reality, I decided that we needed to switch from the web ads to try and acquire customers through native mobile. This brought forth a few new challenges we needed to address:
- We didn't have the Facebook Analytics SDK installed on our mobile apps
- Getting people to download an app is more cumbersome than signing up for an account online
- FarmLogs had never run mobile ads before, so this was a new acquisition model for us
After several rounds of testing various ad sets, imagery, copy, targeting and so forth I narrowed down the key driver in being effective for these mobile ads. Within Facebook ads you can target users based on their network type. So I excluded all users from getting our ads unless they were on a Wi-Fi network. I found users didn't want to download apps off Wi-Fi, due to data usage concerns. After I found this our CAC dropped immediately and our CAC dropped below $10!