Yes, Facebook Ads Do Sell Wine
I am used to being met with skepticism and incredulity. Thanks to dishonest practitioners, digital advertisers seem to be viewed as snake oil salesmen and rightly so if they sell a bag a black magic. The truth is, if you hire a team of expert digital marketers you can sell a lot of wine with Facebook ads. If you choose to still try to do it yourself, you will waste lots of money on ineffective ads and be convinced it doesn’t work.
Running effective ads on Facebook is not black magic. In fact, quite the opposite. The #1 reason I see wineries have poor results is because they try to manage the ads themselves and their budget is too small. Facebook advertising takes lots of strategy, skill, and education. The goal of this post is not to teach you how to run Facebook ads as there is no way to do so in a short blog. However, I want to explain to you why and how Facebook advertising works for wine and why you should strongly consider hiring an expert.
Value Expertise
As a small business owner myself, I understand the scrappy mentality of trying to do everything yourself to save money. I started my DTC wine marketing agency Highway 29 Creative exactly three years ago by myself and operated that way for the first year. However, I quickly realized I was limiting my business’s growth. I did not have time to become an expert accountant, graphic designer, web coder, and digital marketer overnight. Fast forward to today and I no longer do my own accounting and have a team of eight to support our clients. The lesson I learned was to value subject matter expertise.
Facebook advertising is not something you can stick a toe into the water for. Sure, you can open up Facebook and build an ad yourself, but this is the equivalent of a customer walking into your winery, thieving a few barrels, and making a blend on the spot. You don’t trust your customer to make your wine blend, so why do you trust yourself to do something others spend their entire careers studying and perfecting?
How Do Facebook Ads Work?
Facebook is incentivized to help you sell wine online. The more success you have as an advertiser, the more money you will spend on their platform. So while the politics of Facebook are up for debate, when it comes to advertising, trust their algorithm. Facebook may be “big tech,” but that means their job is to know everything about their users and help find you potential customers.
To create a Facebook campaign, there are three key things to consider. The first key is the audience. Are we targeting new customers or engaging existing ones? A new customer and a long time buyer are going to react very differently to the same ad which is why it's best to avoid a one size fits all approach to advertising. We divide our ad campaigns based on which stage of the customer journey we are targeting. New customers, called top of the funnel, should be shown ads introducing the brand. Existing customers know who you are and respond better to new releases, special offers, and direct sales messaging. Through advanced targeting settings within Facebook, we can decide who should see your ads. You’d be amazed how effective it is to target your existing customers with ads.
Second, the content is arguably the most important part of the ad. The biggest mistake we see wineries make when they try to run ads themselves is creating one ad, giving it a try, deciding it failed, and then decreeing that Facebook ads are useless. We are constantly testing different content for our clients to decide which performs best. When we start a new campaign, we test anywhere from 3-10 combinations of photos, copy, and calls to action. We use a method called “rapid fire testing” which allows us to quickly test using minimal budget to determine the winner. Once we find the best performing ads, we double down on it and turn off the least effective ads. We are humble enough to admit no one really knows what will be the best performer and the only way to get the results is to test. However, our experience has taught us that generally speaking photos and video of people perform way better than just bottle shots.
The third key to a successful ad is the landing page. I cannot tell you how many ads I click on from wineries where it takes me to the homepage. Your ad’s success is only as good as the landing page and a homepage is the wrong place to send a customer. If your ad is talking about a new Chardonnay that is 10% off and the first thing a customer sees when they click the link is a history lesson about your winery, you will see poor results. The landing page must echo the exact message of the ad itself, be easy to navigate, and provide a clear call to action. We could spend $1 million on Facebook ads, but if your landing pages stinks, then it won’t be a successful campaign. The best practice is to build one-off landing pages for each ad you run and building those properly is a skill unto itself.
You Have to Spend Money to Make Money
The number one question we get asked is, “how much should I spend on digital ads?” There is no one size fits all answer, but the answer usually is as much as you can. Budgeting $500 a month is a waste of your time and money. You will never see measurable results that are truly worthwhile with such a small budget. I’d suggest a minimum of $2,500 a month and prefer starting budgets of $5,000 or more per month. We have some clients that spend $10,000 and $20,000 each month on Facebook ads.
You might be thinking to yourself, “I cannot afford to spend that much money each month,” but this means you are thinking about it the wrong way. Digital marketing is not a cost, it's an investment and like any other investment, you should be able to show a clear return on investment.
The way to measure the success of your digital ads is to measure the “Return On Ad Spend” or ROAS. This simply means, how much revenue did the ads generate compared to how much you spent. So hypothetically if you spent $5,000 a month on ads and you generated $10,000 in wine sales your return on ad spend would be 2x. We never can guarantee the exact return each month, but in general we aim to average 2x-3x each month if not more. And, to let you in on a secret, our clients that spend the most see the biggest return.
Facebook charges you based on how many people engage with your ad. So for example if it costs you $1.50 per click on your ad and your budget is only $500 a month, then Facebook will stop showing your ad after 333 people click on your ad. Now of those people only 1-2% will actually make a purchase if they are first time customers. So in this example with a $500 budget we expect to see 3 wine orders placed. Mind you, I’m not saying that if you 10x your budget you will see 10x results because scaling is tricky to do without lots of expertise. The point I want to drive home is that you cannot expect to spend $500 a month and magically sell $10,000 worth of wine. I have yet to see this occur.
Real World Examples of Success
We take client confidentiality very seriously, so we will not name our clients. However, I want to generally speak to some of the great successes we have seen without naming names.
For one client, we have spent $76,452 on Facebook ads over the past six months. That ad spend has generated them:
$140,090 in wine sales
722 orders placed on their website
40 wine club sign ups
331 reservations booked
24,841 mailing list sign ups
For another client, a new winery, their focus was growing their allocation list. In the last 6 months we spent $14,470 on Facebook ads and generated them:
1,109 new allocation members
This means we spent $13.04 per new member. The great success came when we recently released a brand new wine with them and it sold out in two weeks. Nobody has ever tried this wine, there were no scores or reviews of it, this is a brand new winery with no tasting room, and this was a very expensive bottle. Yet, with all these factors against this client, we sold out their wine to a wine club built on Facebook ads.
During their release, we tried a new approach to communicate with members. Typically wineries send only emails or snail mail alerting customers that their allocation is ready for purchase. If you rely solely on email then you are limiting your growth. At best, your open rate on emails to highly engaged club members will be 50%. This means at least half of your members never read the email and know it's time to purchase!
To combat this big issue, we decided to run Facebook ads targeted specifically at members of the allocation list. We started these 3 days after the first email announcing the release went out and filtered out anyone that had already purchased. Our thought is that that first email always generates the most sales and why pay for a Facebook ad if one email can do most of the heavy lifting.
Overall we spent only $1,289 on these ads and generated an extra 18 allocation orders for an extra $13,520 in revenue for the client. This was a 10.49x return on ad spend which is incredibly high and way above industry average. It’s a no brainer, these ads do work!
Stay a Skeptic if You Like, But You are Limiting Your Growth
So if you have read this far and are still skeptical, then I’m not sure what else could sway you that Facebook ads do work. The pandemic forced wineries to double down on digital marketing and e-commerce and I see so many more winery ads now. It will become harder and harder to stand out and elevate your brand above the noise. The key is to have a really compelling story to pitch and a clear digital strategy.
You can continue to sit on the sidelines, be a skeptic, and think you are too good for digital advertising. I constantly hear folks say they don’t want to come off as “pushing sales.” There is a way to run ads that feel authentic and on brand and to be honest this feels like a poor excuse. If you are in the wine business, then you are in sales, like it or not. Your job is to sell wine and should you choose to sit out of digital marketing, just be prepared for little or no growth.
Start Running Digital Ads For Your Winery
For those that now understand the importance and effectiveness of digital advertising, it's time to get started! Your job is to run your winery, not become an expert digital marketer overnight. Whether you choose to work with our agency Highway 29 Creative or any of the other great agencies out there, understand the importance of hiring a team of experts that have your back.
At our agency, our commitment to our clients is that we will spend your money as if it is our own. We understand the importance of every dollar and that our job is to generate the biggest return possible for you. Likewise, it is your right as the client to have clear and accessible data that shows how every dollar is being spent and what the results are. Without data and analytics to back it up, all advertising can feel like black magic and you deserve better than that.
Interested in working together and discussing how you can grow your wine business through digital advertising? At Highway 29 Creative our sole focus is DTC wine marketing and we have a team of experts that will have your back.
Simon Solis-Cohen is the founder of Highway 29 Creative, a leading digital and creative agency serving the wine industry. He challenges clients to think about the future and constantly innovate. The agency chases data, not fads, and provides one-stop shopping for wineries looking to enter or jolt their direct to consumer sales. Their approach starts by designing and building a website focused on conversion (wine sales, club sign ups & tasting room reservations) and then dives into each digital channel with consistent and effective content and messaging. What to learn more or looking for advice? Shoot Simon a message at simon@hwy29creative.com.