How to Determine Facebook Ad Spend by Country

Advertisers are split into three primary camps when it comes to geo-targeting and Facebook ad spend by country:

  1. Worldwide: Just target everyone on the planet in the same ad set
  2. Country Clustering: Throw your primary countries that work best into the same ad set
  3. Segmentation: Create a separate ad set for each country or similar groups of countries

There are additional variations and areas of gray, but these are the primary approaches.

Let me first say that there is a time and place for each of these things. For example, I will use Worldwide targeting on occasion — but I do so selectively. I’ll use it when reaching a very warm (and small) group of highly engaged people.

But there are many times when you should strongly consider approaches 2 and 3. However, you can’t simply guess which countries to use. It needs to be intelligently based on your customer data.

Let’s take a quick step back and then plow through…

Why Separate Ad Spend by Country?

So, why should we consider separating ad spend by country in the first place? There are three primary reasons…

1. Similar audience optimization. Facebook’s optimization is quirky. It’s complicated and mysterious. But what Facebook does, essentially, is reach people most likely to perform your desired action within the audience you’re targeting.

How they do that is where the mysterious part comes. But the thought is that it helps to group audiences of similar people to assist Facebook’s optimization. This isn’t something I buy into strongly, but it is one of the strategic lines of thought.

To that point, it would help to have people grouped by location. Not only might these people be more similar due to geography, but Facebook’s optimization and delivery can remain more consistent in terms of timing due to time zones.

2. Reach those likely to buy. If you’re a local business and you can’t service those outside of your area or country, there’s no reason to target globally. But even if you can have customers anywhere, there’s reason to limit the countries you reach.

I’ve personally seen that I may get a high level of engagement in certain countries, but that I NEVER get a paying customer from those locations. Or the ratio is so small that it’s not worth spending on people there.

As a result, I’ll often run either one ad set with all of my “primary” customer countries in it or create separate ad sets for each country.

3. Distribution control. My paying customers dating back to the beginning of 2017 are from 90 different countries. It’s pretty crazy! However, the percentage of customers from each country is a good starting point for determining how much I should spend on that group.

For example: Customers from the United States make up 52% of my revenue dating back to the beginning of 2017. The other countries represented most are the United Kingdom (8%), Australia (8%), and Canada (5%). Every other country represents fewer than 2% of my revenue.

If I were to group my top four countries in the same ad set, how will Facebook distribute my budget? For reasons I am about to discuss below, it’s quite likely that users within the United States will not account for half of my budget.

So, let’s say that I want to spend $100 per day targeting only these four countries. I’d then create a separate ad set for each country with the following budgets:

  • United States: $71
  • United Kingdom: $11
  • Australia: $11
  • Canada: $7

(NOTE: I’m not using $52 for the United States because it actually makes up 71% of my “primary country” revenue).

Let’s talk further about why optimization forces us to do this…

How Optimization Creates a Problem

Facebook’s primary goal, by default, is to get me the most actions (conversions, clicks, etc.) for the lowest price. If I am driving traffic to a blog post or building my email list with a lead magnet, this definition creates a problem.

You see, clicking a link or providing an email address aren’t revenue. I know, they can lead to revenue, but by themselves, they are not revenue equivalent. Proof of that can be found when targeting worldwide.

Some countries are MUCH cheaper to reach than others. The most expensive, of course, tend to be my primary countries. The main reason for this is the competition within those countries.

While I may not get revenue from certain countries, I may get clicks, engagement, and even registrations. In fact, I may get far more clicks, engagement, and registrations from third world countries. This is due first because of the low cost to reach these people. It can also be attributed to bots and low-quality engagement.

The problem is that if you optimize for clicks, traffic, or leads, Facebook doesn’t care whether or not these people lead to revenue. They are cheap to reach. They will give you a ton of “results.” Those results just aren’t likely to lead to much.

But Which Countries?

This is the difficult part. Most advertisers are quick to list the same four countries (United States, United Kingdom, Australia, and Canada) as being “high quality” for business. But they aren’t the only countries that can lead to revenue.

As I mentioned earlier, I have a list of 90 countries that have led to revenue in less than two years! Of course, most of these 90 represent a very small piece of the total pie. But should they be ignored?

First, be careful about assumptions. India gets a reputation for low-quality traffic. That said, I have 64 paying customers since the start of 2017 from India. That’s not nothing (double negatives are fun!).

Still, India is a country to be careful about because it is so cheap to reach users there. So you shouldn’t, for example, have an ad set that includes the United States, United Kingdom, Australia, Canada, and India — at least, for the purpose of leads or traffic. If you do, Facebook will send the bulk of your impressions to India (at least, in theory).

I’ll talk more about how exactly I handle this in a minute…

Considerations Based on Audience Size and Budget

This is all great, but let’s not get crazy. If you have a $5 per day budget, there’s very little reason to micromanage this. And in all likelihood, you won’t need a separate ad set for a single, small country.

For example, I have 18 paying customers out of Norway, making up .5% of my revenue. While there are 3.6 Million Facebook users in Norway, only a small percentage of them would care about my products. According to Google Analytics, only about 5,000 Norwegians have visited my site since the start of 2017.

I’m not going to spend .5% of my budget for a campaign to create a single ad set for Norway. Instead, I’ll add similar (at least in impact) countries to create an audience large enough to spend more.

Once again, we’ll look at how I handle this in a moment…

Find Customers and Revenue by Country

Okay, so the first thing you need to do is find out how many paying customers you have from each country. I use Infusionsoft, and I’m able to create a report of my customers, including a column for country and revenue.

Here’s how the top 24 break out in terms of total customers and percentage of total revenue:

  1. United States – 2,185 (51.6%)
  2. United Kingdom – 396 (8.3%)
  3. Australia – 357 (8.0%)
  4. Canada – 255 (5.0%)
  5. Netherlands – 65 (1.9%)
  6. Germany – 73 (1.4%)
  7. Denmark – 64 (1.3%)
  8. New Zealand – 56 (1.3%)
  9. Belgium – 49 (1.1%)
  10. Singapore – 52 (1.1%)
  11. Italy – 54 (1.0%)
  12. Israel – 42 (1.0%)
  13. India – 64 (0.9%)
  14. Thailand – 40 (0.9%)
  15. Malaysia – 33 (0.8%)
  16. Spain – 36 (0.8%)
  17. Mexico – 25 (0.7%)
  18. Ireland – 42 (0.7%)
  19. France – 31 (0.6%)
  20. Brazil – 31 (0.6%)
  21. Sweden – 24 (0.6%)
  22. Norway – 18 (0.5%)
  23. South Africa – 26 (0.5%)
  24. Greece – 25 (0.5%)

I cut this off at 24 only because every other country accounted for less than .5% of my revenue. It’s an arbitrary cutoff, but you have to start somewhere.

Apply What You Learned by Ad Set

I’ll use a campaign for my free webinar as an example of how I’m splitting up my budget by campaign.

I’m spending $53 per day (random, I know) on this particular campaign. First, I created a separate ad set for each of my “tier 1” countries:

  • United States: $30
  • United Kingdom: $5
  • Australia: $5
  • Canada: $3

Then, I created an ad set for my next five “tier 2” countries and assigned a daily budget of $4 (applying the ratio of revenue for those countries).

Finally, I included all of the remaining 15 “tier 3” countries and assigned a daily budget of $6.

Note, we could have done some things differently if I wanted to micromanage or spend more money. With a higher budget, I could have looked to create individual ad sets by country for my top 24 countries. I may have even gone beyond the top 24.

But I like to stay sane and limit micromanagement when possible. There are times when I may only target my top four countries. In this case, I’ve expanded my spending, but I’ve made sure that I’m spending an amount that is in line with the likelihood for return revenue.

Your Turn

How do you go about handling this? Do you create separate ad sets for each country? Do you group countries together in the same ad set? And how do you determine your budgets?

Let me know in the comments below!

The post How to Determine Facebook Ad Spend by Country appeared first on Jon Loomer Digital.

How to Determine Facebook Ad Spend by Country