The Truth: Rebates using Facebook Advertising
5 min read | Posted On 30 Sept 2020 | Posted By Paul Harvey
TL:DR
- Why rebates using Facebook ads is so risky
- Is 'buyer quality' harming your listing?
"Judge me by what I do, not what I say"
That's my way of saying 'I am not a Facebook ads expert or marketing guru. I have made many mistakes and some of our most successful strategies were the result of many failures.... many painful failures.'
But what I can say is this:
- We have spent over $25,000 on Facebook ads this year so far on just one chatbot flow
- Launched and reranked over 100 products
All of this was using Messenger ads and chatbot flows for our ranking service, Rankster.
So I like to think Rankster is good at one thing: Ranking using chatbots
But... chatbots are useless unless you have traffic.
That's the first problem!!!!
To demonstrate that, let's jump in a time machine and go back 1 year...
It's September 2019 and you are brainstorming the upcoming Q4 madness with the team......
'Old Town Road' is only 2 months old and playing in the background..... you try your best to impress your coworkers and pull a subtle dance move that is a rare mix of Gangnam style and Miley Cyrus' Wrecking Ball....
After the laughing stops, you and your team then start brainstorming.
You are just wondering two things....
- How can I rank my products so they are in the best position for the Q4 sales rush?
- How do I leave the office without anyone knowing I just pulled my hamstring?
You and your team decide the best method is to run your own rebate chatbot flow using Facebook ads...
You advertise your product at 80% OFF using Messenger Facebook Ads and clicks are less than 5c.
Your keyword ranking shoots up and you are in the best position for the Christmas sales.
Fast forward to December and you have your best month ever... your team even clubs in to buy you a 1 hour session at the local physiotherapist to get that hamstring sorted out....life is good.
Sounds great right?
Let's move back to present day.... September 2020
You and your team are having a meeting via Zoom.....thanks Covid 😡
Your assistant asks you a question "Hey Hammy, same strategy as last year"? Seriously....will anyone forget that hamstring injury....
You agree and setup some rebate chatbot flows for your current products.
As soon as the ads start you notice a few things....
- Why do all the rebate customers have really odd names?
- The customers are offended by your 80% OFF offer.... they want 100% OFF
- Some customers asked for an Amazon gift card or immediate payment
- One customer said to make it 100% OFF or he will leave a 1 star review 🤬
And here is the worst part....
Your keyword ranking plummets and you end up with a dozen hijackers
The strategy failed and your Amazon skills feel like your hamstring....
What really happened.....
The Facebook algorithm screwed you.... it really did.
But first, we need to look at buyer quality... it's a thing.
Amazon knows their ideal customer: someone who purchases frequently on Amazon according to normal buyer behaviour. ie A mother will generally buy products for the whole household (toys, vitamins, food, etc)
But when that mother starts buying tons of different supplements, pet supplements, toys, kitchen utensils, etc at an alarming rate and then leaving reviews, it raises a flag... what is this customer doing?
To make matters worse, do all of these products and sales share something in common?
- Did they come from the same platform (website, Messenger, Instagram, Facebook, etc)?
- Are they using normal Amazon URL's or Super URL's?
- What is their average buy to review ratio?
- Is the seller using the Amazon API to automate the checking of the orders?
Now this list is based purely on my assumptions... but I I have no doubt Amazon has hundreds of data points they test. Don't fool yourself, Amazon's biggest asset is data..... Big Brother knows what you are doing.
Basically....
Low Buyer Quality & Behaviour = Footprint
Are you 'telling' Amazon that you are running rebates?
Are you saying:
"Hey Amazon, I am launching a product and a whole bunch of people will buy it but they will never spend their own money buying my product so I am paying for it"
Amazon would reply:
"Sounds great! But your product doesn't really bring any value to our marketplace or else it wouldn't need these customers. So we will help you with the launch by moving you up the keyword rankings but we will drop you once the rebates stop. Deal!"
I know that sounds ridiculous... but that's what happens and it begs the question....
Could your rebates be harming your listing?
Why Facebook screwed you....
So the Facebook algorithm is doing exactly what it is supposed to be doing: Optimising your ads so you get more results.
Think about it.... you have seen people on Facebook bragging that they paid less than 2c per message.
But what are they really bragging about?
Because Facebook is pushing low quality Amazon buyers (deal hunters, freebie seekers and yes, scammers) to your ads, because they have shown an interest in these types of ads.
Facebook is using up all your advertising budget to promote your product to the exact people you don't want.
You see Facebook cannot differentiate between High quality Amazon buyers vs Low quality Amazon buyers. (Side note: If you are a Facebook Ads expert and you have tons of lists and buyer data at hand, then yes, Facebook can tell the difference between high and low quality customers. But 99% of Amazon sellers are not Facebook Advertising experts)
Low Quality Buyers:
- The are used to the normal rebate ads and look out for anything mentioning "Amazon", "Rebate", 80-100% OFF", etc
- As they have taken a ton of rebates in the past, Facebook pushes your ad to them before your 'ideal customer'
- Generally they cost a few cents per message
High Quality Buyers:
- They are not 'groomed' for rebates and generally avoid ads that look like clickbait... Think about it.....100% OFF and FREE....yeah that's too good to be true...
- Generally, they cost $1 per ad (at least in my results)
There has been a MASSIVE shift when running Rebate Chatbot campaigns. The campaigns use to bring in high quality buyers at a fraction of the cost (why is no one talking about this?).
When I first started running Messenger ads a few years ago the ads would cost pennies and slowly started increasing.
Look at the screenshot below of the Facebook campaigns (all the products are in the same Amazon niche and 100% OFF):
- The first 3 campaigns in January and February were under £1 per message
- Fast forward 6 months and those same ads are now 200% - 800% more expensive
That's not great... it's really not and this was a random screenshot from our ads account. Ads costs are up and CPA is through the roof....
But this happens when strategies are abused in the Amazon space...... remember using discount codes?
Summary
Facebook ads generally bring in low quality buyers
Facebook Messenger ads are expensive and the costs are increasing
Are you worried? You should be
Kinda like how Amazon Ads became a lot more expensive. The same applies here, giving your stuff away for free (or almost free) will become incredibly expensive.... (side note: Why is it so damn hard to give your stuff away for free? What kind of world do we live in.....)
So what can you do?
Don't worry, I know how you feel. I really do.
I mean, I run a business that's sole focus is rebates using chatbots. Would you be worried? Yeah, I was and didn't sleep for two months.
I tried tons of different strategies and hacks. Most failed and some resulted in me losing a few Ad accounts.... it wasn't pretty.
This article was not written to scare you.... but inform you. As Facebook ads are constantly evolving, so are the audiences and strategies. Whilst this may appear quite dire.... it really isn't because if you can figure out how to run rebates with this current problem.... then you have a million dollar solution....Challenges like this is what separates us from the rest.
Tools and Services I Cannot Live Without:
