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As you can see, this is the latest sponsored ads by New On Kickstarter fanpage. I am not one of the fan for this page, but I can still see the ads. This is because whenever we create ads on fb, we can choose to target our audience by minimizing the audience and target those who already liked one of our pages. In this case, while I am never liked the "New On Kickstarter" page, I am connected to it through "My Top Kickstarter Projects".
So, the numbers is :
My Top Kickstarter Projects : 176,204 likes at the moment
New On Kickstarter : 26,511 likes at the moment
Looking at this number we can conclude that FT (Funded Today) realizes that their old page with more likes does not have good response to their ads anymore. So they created another page, targeting the past audience, to minimize their losses. Now, why is that? Let us break down the numbers. This is going to be fun.
Imagine spending $100 to 176,000 people.
Now imagine spending $100 to 26,000 people.
What we understand is the larger audience will get less money on them compared to small one.
Now, this is not the case.
The real system should be, they spend equally on both audience. For example if the recommended settings for fb ads was $0.20 per person, $100.00 should buy them the group focus of as much as 500 people.
Now, spending $100 on both target audience separately, meaning they will manage to reach up to 500 people from both audience.
Which on will be more profitable? The small one of course. Because when they made the new page, they target the audience related with the old page as I mentioned before. So from the 176k people, those who usually responds to the ad and pledge a project on Kickstarter was around 26,000 (the numbers on the newer page).
At first, the money spent on it will be considered a bad investment. Since considering they spent $0.20 per person, reaching to 176,000 people will cost them roughly $35,200.
BUT, now they manage to minimize the target audience to 26k. Benefits? Of course this 26k people are the one who responding to their ads which means they have higher conversion rate than before now! So what is the new number? $0.20 per person for 26k = $5,200
So if you minus them with the average money they usually spend to reach the larger audience which LOWER response rate, they actually save at least $30,000 for every ads made and not to mention a new target audience with much much higher response rate! This is because the $30k was before spent to the wrong people who never respond to such ads anymore.
So how will all this information helps you. First of all, there is nothing new to this. But the absence of good example, or the connection between your understanding of these formula and systems with marketing, or maybe you are just too lazy to learn new things are the reason why you dont come up with such idea for your own crowdfunding project.
Create an audience. Connect. So you have limited funds? Or you want to be more efficient on spending your hard earned money? Minimize, target the latest audience, not a penny will go to waste. It will all be well spent. See how much you can learn by doing enough research? Goodluck everybody.
