The BEST Facebook Ads Niches for Easy Profit

Summary

This video script reveals insights on the most profitable niches for Facebook ads, emphasizing businesses with high customer lifetime value (LTV). It outlines two key types of businesses that excel with Facebook ads: those with high average customer values per transaction and those with repeat purchases. The speaker shares strategies for local service businesses and subscription models, suggesting that despite challenges in scalability and competition, these can yield significant returns. The script also offers personal advice on starting a business with Facebook ads, recommending focusing on local services with a high LTV for the easiest path to success.

Takeaways

• 📊 Facebook ad success often correlates with businesses that have high lifetime customer values (LTV), making it easier to achieve high return on ad spend (ROAS).
• 💡 High LTV can be achieved either through high-priced one-time transactions or through frequent repeat purchases.
• 🏡 Local service businesses, particularly those related to home services, tend to have high LTVs due to the costliness of services provided.
• 🌟 Businesses that can generate high LTVs can afford to spend more on advertising to acquire customers, leading to higher profitability.
• 🚀 The auction system of Facebook and Instagram ads means that all advertisers pay roughly the same amount for impressions, so high LTV businesses have a competitive edge.
• 🛠️ Local service businesses often face less competition in advertising, making it easier to dominate the local market with effective ads.
• 💼 Scaling can be a challenge for local service businesses due to the complexity of delivering services, which may involve multiple people and moving parts.
• 🔄 Businesses that rely on repeat purchases for high LTV need to offer exceptional products or services to encourage customer retention and repurchase.
• 💰 Cashflow can be a concern for businesses with high LTV from repeat purchases, as initial transactions might not cover customer acquisition costs.
• 🔗 Subscription models are becoming popular as they increase customer lifetime value, making it easier to justify higher upfront advertising costs.

Q & A

What is the key characteristic that businesses successful with Facebook ads share?

The key characteristic is high lifetime customer value, which is crucial for achieving great results with Facebook ads.

Why is high lifetime customer value important for Facebook ad campaigns?

High lifetime customer value is important because it allows businesses to generate more profit and achieve higher return on ad spend numbers, making it easier to acquire customers at a low enough cost to ensure profitability.

How does Facebook's auction system for advertising affect businesses with different customer values?

In Facebook's auction system, all advertisers pay roughly the same amount to reach people. Businesses with higher customer lifetime values can afford to spend more to acquire a customer without needing to significantly increase the cost, leading to better return on ad spend.

What are the two main ways businesses achieve high lifetime customer values according to the script?

Businesses achieve high lifetime customer values either by charging a lot of money per transaction or by getting customers to buy from them many times.

Can you give an example of a business that charges a lot of money per transaction?

Home service businesses like roofers are examples where the average customer transaction can be worth thousands or tens of thousands of dollars.

What is an example of a business that gets customers to buy repeatedly over time?

Grocery stores and fast-food chains like McDonald's are examples where customers make small transactions repeatedly, accumulating to a high lifetime value.

How can businesses increase their customer lifetime value?

Businesses can increase their customer lifetime value by tweaking their offer to target a market segment that spends more, improving their product or service, adding subscription models, or using remarketing strategies.

What are the challenges faced by local service businesses when it comes to scaling?

Local service businesses face challenges in scaling due to the complexity of delivering services that require many moving parts, time, and people.

Why are businesses with high repeat purchase customer lifetime values harder to advertise?

These businesses require exceptional products or services to encourage repeat purchases, and they may face cash flow issues due to the time it takes for customers to generate enough revenue to cover the initial acquisition costs.

What niche would the speaker recommend for someone starting from scratch with Facebook ads?

The speaker would recommend starting with a local service business that has a customer lifetime value of at least $5,000, as it offers favorable economics and easier competition in advertising.

Why is getting the campaign structure right important for Facebook ad success?

Having the right campaign structure is important because it aligns with the latest changes in Facebook and Instagram ads, ensuring optimal performance and results.