Advertisers are spending a lot of money on facebook ads, but they could be missing an important feature, the ability to test market products and prices.
A bike supplier had an idea for a great new product, but was unsure if he had set the right price as he wanted to maximize his profit. We developed two price scenarios, one with a list price of $19.95 and one with a list price of $14.95. We ran two ads on facebook for the products targeting bike users, but ensured the ads didn’t overlap audiences using other parameters. Much to our surprise the $19.95 product outsold the $14.95 even though we ran the ad for $14.95 a couple of weeks longer. Thank you facebook.
If you are a high user or facebook you’re going to run, sooner or later, into the so called “kickstarter” projects, but the problem with these products is that they often don’t ship for 4-6 months or longer and today consumers are all about instant gratification.
Using facebook to test market a product is a great way to gain insights into your product’s positioning and pricing. It’s also a great way to gain distribution with retailers. Shortly after our test market, we had several bicycle retailers ask about selling the product in their stores including a national chain. We were able to present the retailer with metrics from facebook which clearly showed a very high level of interest.
While a lot of people, including me, are talking about the demise of social media marketing, social media can be effective for ads if done well. The key is to define your audience as finely as possible and well beyond plain demographics. The ads I see on my facebook feed are more miss than hit, but every once in awhile a smart marketer hits a home run which leads to an order as I am an avid cyclist.
There is nothing worse than setting a price of a new product too low even though you researched the hell out of it. In reality, consumers today are willing to pay more for innovative products and brands that provide a high level of service. Facebook is a great platform to test market your product.
