Shopify Ecosystem

Why SMS Is Better Than Facebook Retargeting Ads

why-sms-is-better-than-facebook-retargeting-ads

Are you still relying on Facebook retargeting ads to re-attract visitors to your store?

Even with the iOS 14 update, most merchants still spend 30-60% of their revenue on Facebook ads.

But are they still worth it?

Advertising on Facebook seemed like a golden opportunity a few years back, but in the past few years we’ve been able to notice a significant shift in its effectiveness.

First of All, Facebook Retargeting Ads Are Getting More Expensive

As of December 2021, the average CPC (cost per click) for Facebook ads is $1.12, and the advertising costs increase by 45% YoY.

With countless new online stores popping up as a result of the pandemic, we could notice an even steeper increase in this number.

Even if Facebook retargeting ads still bring in sales, with the ads getting more and more expensive, you’re losing money. Steady revenue and growing expenses equal less profit.

You could make up for the extra expense by raising your prices, but that could easily backfire. Unless your products are unique, your customers will turn to other stores for a more economical alternative.

Second: Customer Behavior Is Changing

The days when everybody was either on Facebook or dead are over. With a great deal of options to choose from, more and more Americans are turning to different channels. But these apps share one thing in common: they all work brilliantly on your smartphone.

And did you know that the average American checks their phone over 160 times a day?

Instead of relying on in-app ads, you need to be on your ideal customers’ screen right as they pick up their phone if you want to fight for a moment of their attention in the overwhelming amount of notifications, ads, and feeds.

Facebook ads do not qualify for this.

Third: Customer Expectations Are Changing

It was a big step in advertising history to start running targeted online ads to specific audiences instead of generic flyers and television ads that had to talk to the masses.

Yet, the evolution doesn’t stop there.

Customers now expect even more personalized and personal contact.

Instead of the old-school ads that mostly just talk at your customers, businesses today need to talk to their customers.

Your shoppers don’t mind your promotions, but they want to be a part of the conversation. They want to ask questions and share their opinion. They want to interact with you and make a choice on their own. The best promotions in 2022 enable two-way communication.

What channel can solve all three problems?

Replace Facebook Retargeting Ads with SMS Marketing

A better way to retarget your customers in 2022 is SMS Marketing.

Did you know that over 80% of North Americans use SMS on a daily basis? SMS is flourishing and based on recent trends, the number of users is only going to increase over the next five years.

Here’s why we believe that SMS can kick Facebook retargeting ads’ ass:

  • SMS is cheap. One text message costs $0.0099 per message in the United States

  • People will actually read it. SMS has a 98% open rate and 60% of the recipients open the text message within 5 minutes.

  • It’s unlimited. You can send as many text messages as you want, as long as you get your subscribers’ consent at the start.

  • It enables two-way communication. SMS is a direct channel and your customers can easily reply to you.

  • High click-through rate. The average CTR for SMS is 5-30%. The average CTR for Facebook ads is 0.90%. Your call.

You can certainly achieve over 30% CTR on your SMS campaigns, but let’s calculate with a basic number.

Let’s say your SMS campaigns achieve a 5% CTR on average. With one text message costing only 1 cent, your effective CPC is $0.2. This is 5.6X better than the CPC for Facebook retargeting ads. 

Final Thoughts

We’re not telling you to cut out Facebook ads completely, but we encourage you to re-evaluate how much of your revenue do you spend on them. Even a 5-10% redistribution of retargeting ad budget opens up a massive market opportunity.

Don’t spend more for higher profits: spend smarter!

And if you want to start your SMS marketing journey the best way, get in touch for a free Recart demo! 

 

Special thanks to our friends at Recart for their insights on this topic.
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