Photo by Intermayer

This is one of those posts I hesitate about writing, because it's tempting to hoard an advantage like this, but sharing always seems to benefit me more in the long run. I'm able to get new users for my (in-testing, very unfinished) Facebook app for as little as $2 each using Facebook Ads. Here's my most successful ad so far:

It's short and simple, and around 0.07% of people who see it clicking. Naively I started off expecting click rates of around 1%, but since then I've talked to people with more experience in the ad world, and outside of search ads mine is actually pretty respectable. It's also cheap – I set my cost-per-click bid to 50 cents, but actually ended up paying 37 cents each.

This is only the start of my funnel, the landing page is the install dialog for my Facebook app. The only thing I have control over there is the app description and logo, and currently only 30% of the visitors click accept to install it. That means my cost per installation is around $1 per user.

After they've made it through that screen, they're finally on a page I control. Here I ask them to give me their email address, accept extended permissions and authorize me to access their Twitter account. I lose between 50% and 70% of users there, bumping my final cost per true user to between $2 and $3 each.

So what are the secrets to achieving similar results?

Land in Facebook. I have a massive advantage in that I've moved my service over to run as a Facebook app. It's low friction for users when they're staying within the same site, I doubt you could achieve the same CPC for external pages. I'm now a hostage to Facebook's whims of course, but for me the gain in user trust far outweighs the risks.

Start small. I'm still paying only $15 a day spread over several campaigns, that gives me enough data to tell what's working and refine my ads and landing pages before I ramp up to collect larger numbers of users. It's also a great way of flushing out bugs and scaling issues while annoying a relatively small number of users.

Test, test, test! I'm terrible at writing ad copy, really, really bad, and my first versions had awful click-through rates around 0.01%. I was able to use Facebook's statistics panel to tell which ads were the least-worst, and spot the patterns. In my case the shorter ones worked much better, as did the ones that focused on a single feature, which is how I ended up with the one above. I'm also constantly trying new versions of the landing page and sign-up flow to measure how I can improve the rest of the funnel.

Foreigners are cheap. There must be a lot less competition for UK and commonwealth Facebook views, because I'm able to get CPCs of 37 cents if I specify the English-speaking non-US in my targeting, versus around 60 cents each in the US. If you're in the testing phase, I would expect you could get representative data for almost half the price if you use non-Americans as guinea pigs.

I still think there's a lot of room for improvement in my funnel, so I'm hopeful I can keep driving the cost down, even if the ad market overall becomes more expensive with competition. I'm also not doing much with the targeting possibilities beyond picking countries, I think localized ads could get a strong response, and I need to run a census of my users to understand what demographics the service appeals to most and target them.