What is Facebook's secret?
When we launched Viddyoze in 2015 we pretty much used Facebook advertising from day one.
We’re the world’s first and only 100 per cent automated video animation service and count the likes of Tesla, Sony and PwC among our customers.
Facebook advertising works on the same principle as all advertising in that it sends someone to somewhere – but with a twist. The difference with Facebook is it allows you to micro target your audience so you’re getting your advert in front of the right people.
Look at the numbers. Facebook has more than 2 billion users. If you decide you want to target females aged between 36-40 who are interested in Pilates you can. It’s that precise and probably more so.
Facebook allows you to use your data to essentially build a new target audience and Viddyoze is just one example of a company that uses it.
Our technology allows people to create and use their own video animation in three simple clicks at a fraction of the cost.
We know that is costs us $35 to get a new customer and that’s something we can track on a daily basis. Our LTV (lifetime value) of our customers is around $500. Any business wants to know what they’re spending and what they’re getting in return.
If we’re going to generate $500 over the lifetime of the customer and it’s going to cost us $35 to acquire them then we’re doing pretty well. However, let’s say we’re spending $35 to acquire a customer, and we’re making $0 in month one we might have a cashflow problem especially if we’re doing that at scale.
That’s why it’s so important you know your numbers and when the payback is. You might make your money in month two for example. We’re in the fortunate position of getting paid back immediately. If we’re spending $5,000 a day on Facebook advertising we’re generating somewhere between $8,000-$10,000 on the same day.
We predict our revenue for Viddyoze will be £10m ($12.9m) this year but will grow to £25m ($32m) by 2022 and Facebook advertising is an important part of our growth strategy.
If Facebook allowed it we’d probably spend $100k a day but you have to work your way up to bigger spending thresholds. It’s very easy to get your account suspended so you need to grow in the right way.
The other thing that Facebook advertising does is it enables you to monitor how your adverts are performing against each other. At Viddyoze we have more than 1,300 templates to choose from and we want to know which ones perform the best.
Last week a lot of the larger Eurozone countries weren’t responding to us so we ripped them out and now we’re targeting the smaller European countries and Asia where we’re getting more traction. It gives you an insight and an immediacy you don’t get from traditional advertising platforms.
Facebook advertising won’t be for every business but for a fast-growing tech firm like Viddyoze it’s the perfect partner.
- David Chamberlain co-founded Preston-based Viddyoze in 2015 with founders Jamie Garside and Joey Xoto.