The Nike Approach Doesn't Work for Local Businesses

Dennis started by drawing a clear line between enterprise advertising and local business marketing. When Starbucks gives you 17 million dollars to launch Frappuccino across the whole United States, or when Nike promotes a new shoe for the Olympics, there's a certain level of professional, world-class creative that you expect to see from those companies.

But here's the thing. If you're a pest control company, people don't expect that level of production from you. And if you try to be Nike when you're actually a local plumber or pest control operator, it's not going to work.

Dennis sees a lot of companies thinking that advertising on Facebook requires them to come up with this Mad Men style, really crazy, amazing singing and dancing professional video production. But that's completely wrong for local businesses.

He told me, "If I'm trying to grow my pest control business in Portland, I should be showing everyday stuff like here's what's going on with this kind of bug and here's one of my technicians and we just got a new van and man it's really foggy today but I can still see Mount Hood."

Those kinds of things, those everyday authentic moments, that's what Facebook advertising is there for when you're a local business. It's there to deepen the existing authentic relationships and experience that you have with your community.

Dennis has known this since May of 2007, which is when he spent his first dollar on Facebook ads. He's run campaigns for Rosetta Stone, Domino's Pizza, Allstate Insurance, and all kinds of companies with many locations. But those guys are playing in TV land, in Super Bowl commercial territory.

What about the business that has one location and they're not doing something sexy? They're not launching a lightweight shoe that helped break the marathon world record. They don't have cool, exciting, singing, dancing, celebrity stuff.

Then you merely look at what's been working organically on Facebook.

The Biggest Mistake That Kills Facebook Ad Campaigns

Dennis gave me an example from one of his friends who runs Pure Plumbing in Vegas. They're celebrating that one of their people just had a wedding anniversary, or someone did something in town, or things that just show how human they are.

The things that have done the best organically, the posts that got the most engagement and interaction, those are what you want to use ads to amplify.

Dennis told me the single biggest mistake he sees of people trying to run ads on Facebook: "They don't start with the signal of what has worked best organically."

If you can boost posts that already performed well organically, you can turn them into ads, you can generate phone calls, you can get people to visit you. There's all kinds of things you can do if that initial organic signal is there.

But if that organic signal is not there, if it's just a coupon for $25 off your first service or whatever, that might drive leads and phone calls and form fills, but that's not the right way to do Facebook.

Because most people get that one thing wrong, it doesn't matter who does your ads or how good the video is or how complex the campaign structure is. It doesn't matter. Increasingly, if you don't have the content right, nothing else matters.

Dennis has seen huge companies with whole creative agencies working on their content. He's run campaigns for Nike where they had entire agencies creating the content and then they'd give it to Dennis to run the ads and do the analytics. He would never be able to touch that kind of creative quality.

But here's the good news: you don't have to either.

The Ten Percent Rule That Predicts Ad Success

Dennis introduced me to something he calls the 10 percent rule, and this is incredibly practical for anyone running Facebook ads.

He used the example of Rhys, a plumbing apprentice who works for Roger. They were celebrating something that had nothing to do with plumbing necessarily, and that post did really well because people were congratulating him. They grew up in Dallas, all these things happened, and people engaged.

What Dennis looks for is the 10 percent rule. If you reach 100 people, he wants to see at least 10 people liking, sharing, commenting, doing some kind of engagement.

Go back through all of your posts, even from years ago. If you're over 10 percent engagement, that's a candidate for boosting or turning into an ad or repurposing or doing something else with that content.

And if you don't hit that 10 percent, no amount of advertising is going to be able to overcome that failure.

This completely reframes how you should think about Facebook advertising. You're not creating ads from scratch and hoping they work. You're identifying what already works organically and then amplifying it with ad spend.

Why Bottom of Funnel Ads Alone Don't Work

I asked Dennis about something I see all the time with local businesses running Facebook ads. They're usually running bottom of funnel campaigns. It's super direct: call now, we want you as a customer, here's a discount, here's an offer.

Should companies also be running top of funnel and middle of funnel ads?

Dennis gave me one of the best analogies I've heard. He said, "Imagine you're a girl and I come up to you and I say hey would you like to marry me? You've never met me. That's the very first thing you hear."

If you proposition people the first time without building relationships, without saying hello, without figuring out mutual friends or what they like or going on a date, but just asking them to get married, that's what most local businesses are doing with Facebook ads.

That used to work on Facebook 15 years ago. But today, what works is you have to build the three stages in the funnel, and those are called awareness, consideration, and conversion.

There's a reason why those are the same stages across every platform. Google calls it awareness, consideration, conversion. Twitter calls it awareness, consideration, conversion. LinkedIn calls it awareness, consideration, conversion.

Why? Because you have to build that initial awareness of who you are, what you stand for. Just that people see you several times. Then something about the experience, maybe about a deeper meaning, about a neighbor you helped, about different things that happen in your city.

Maybe you take the little league team out and pay for pizza, whatever it might be. Things that show you're a part of the community. This is what you do.

When you stack these different pieces and allow Facebook to figure out what content to show, that's the whole point of the news feed. Let Facebook determine that. Don't try to force it.

Then when it's time to sell, when there's a broken air conditioner, when there's a problem with ants, when whatever the issue is, people view you as a local celebrity.

The Sixty Touch Rule You Need to Know

Dennis and Facebook did some research together, and he asked me if I knew how many touches it takes, how many times people have to see you across social media before they buy.

I remembered from our previous conversations. It's 60.

Sixty times.

You might remember from traditional advertising the rule of six, where you have to hit people six times on TV or direct mail them six times. Some people think that applies to digital.

It's 60 now.

So do you have 60 pieces of content showing what you've done? If you're a local service business, the odds are you're fixing toilets and you're still fixing toilets. That doesn't really change. The stories are evergreen.

Stack those stories at the top, middle, and bottom of the funnel. When you do that, you're going to get a lower cost per call, lower cost per lead, lower cost per engagement.

If you don't do that and you do what everyone else is doing, look at what your average CPM is. Dennis bet me it's above $80, and some businesses are paying over $100.

CPM is cost per thousand impressions (M is thousand in Latin). If you're paying north of $50, Facebook is saying you are flooring your car's accelerator with the e-brake on. They're actively telling you your engagement rate is so low and people don't like your content, but if you're willing to just force your way through and pay, they're happy to take your money.

Dennis sees averages of probably $15 to $20 CPMs for campaigns that are doing it right. Obviously the cost per call and cost per lead, getting customers, is the most important thing. But the diagnostic metric is what are you paying for that traffic, because that's a signal Facebook is telling you about whether you're engaging people or just forcing ads at them.

How Facebook Takes Your Money Even When Ads Don't Work

This was one of the most mind-blowing things Dennis told me. It used to be that Facebook and Google, which were like Coke and Pepsi and had 70 percent of the market, would shut down your ads if the quality was too low.

Facebook would just say nope, the ads were so bad, the engagement was so low, the negative feedback was so high that your ad would just get shut down. People would complain that they spent money on ads and then the ads weren't showing anymore, and that's because the quality score was too low.

Now they'll still show your ad, but for whatever amount of money you're paying, you'll only get maybe one tenth as many people seeing your ad. Then people come back and say Facebook ads don't work.

Well yeah, you boosted a post or you ran an ad for $1,000 and it was already dead after the first $20. It just continued to spend and Facebook happily took your money.

Dennis explained it like this: "Facebook already determined that the ad doesn't work, but you put a $1,000 budget so they're going to spend your money."

Facebook isn't going to tell you to stop. They're going to keep spending your budget even though they know your quality score sucks and your ads aren't performing.

The Facebook equivalent of Google's quality score is called relevance score. Dennis was one of the engineers who worked on quality score at Google, so he knows exactly how these systems work.

What Actually Goes Into Quality Score

If you want to succeed in Facebook advertising and not upset the algorithm, you need to understand quality score and how it fits into relevance score.

Dennis explained it simply. If you're Google and someone's giving you money to run ads, you're trying to determine how much of a fit there is between the ad and the person seeing it, on a scale of 1 to 10.

The number one factor is clickthrough rate, because clickthrough rate is basically the general sign of engagement. If people are engaging positively or negatively, that's a sign that there's some kind of relevance or immediacy or something that got their attention.

The whole news feed and the same thing for Google's algorithm on showing search results are based on the same thing. Recent data leaks from Google confirmed that click-based data is more important than things like backlinks.

If Google is looking at these same signals which drive the same advertising system that Facebook has, and Facebook just calls it relevance score instead of quality score, then how do you ensure that your ads aren't being penalized by Facebook?

You're looking at the engagement rate. You're looking at the quality of engagement. If you have a video, you're looking at how long they watch, which is based on a three-second play and a 15-second-plus video view.

If those things are true on the organic side, then on the paid side you're throwing fuel on the fire.

But if you're running something as an ad like "call us now if you've got a bug problem," you're not going to get high engagement. Facebook's trying to show it to whoever is most likely to engage, but Facebook doesn't really know if someone has a bug problem. Maybe if they talk about bugs, but there are Pixar films about bugs. The AI is not quite that smart yet.

What you have to do is get above 10 percent in that engagement. If Dennis can get at least one in 10 people engaging, which sounds really high (that means 90 percent of people don't care), then he's found a winner.

Go back through all your content from the last few years. You're going to find a pattern of what has gotten at least 10 percent engagement. Figure out what it is about those posts.

Is it celebrating someone who had a kid? Is it talking about congratulations to someone who just passed their certification? Is it talking about a particular infestation? Is it your favorite place to get coffee in the morning?

Whatever it is, it doesn't even have to do with pest control, because people on Facebook are keeping up with their friends. You're trying to build that connection.

That's on you. You can't hire an agency to do that. That's you, that's your people. Put that content in a bucket, whether it's Google Drive or Dropbox or whatever.

If you have those components and you're building connections and you do good work and you get great reviews, Facebook ads will be fantastic for you.

Should This Run on Your Personal Brand or Company Page

I asked Dennis whether this content should go on the founder's personal brand or on the company account, and his answer depends on how big the company is.

If you're a small company doing less than $50,000 a month and it's mainly you as the founder who answers the phone and goes out and sprays the bugs and manages the website and the books, then yeah, you're a small business and you are that personal brand.

You're the person clients see, and you actually have an advantage if you're small compared to a big company like Orkin where they just send some guy out. When clients see you in person and talk to you and they've seen you on Facebook and your family and all this stuff, it creates this instant local celebrity effect.

Dennis has heard from thousands of business owners that have run the dollar a day strategy he teaches. It's easy to do, and when you knock on that person's door, they open it and they think you're a celebrity. They feel like they know you.

All you did was run ads targeting that neighborhood, but they believe you are a celebrity. Everything just does better. It's like inbound marketing or warm leads or doing stuff with a friend who trusts you. All that know, like, trust stuff kicks into gear because you have stacked the different levels of the funnel.

When you do run your conversion ads, Facebook has more data, trust levels are higher, signals are much stronger because of the higher engagement. You find winners that work well and you allow them to run forever.

Dennis has posts from years ago that are still running. For some reason one post did well, and he just continues to put a dollar a day against it, maybe $5 a day. You really can't go above $10 a day per post unless it's Manhattan or something.

Everything on Facebook is really around storytelling. When you see stories of people that you know, when you see locations that are mentioned (the mall, that Costco you go to all the time), when the elements in the story are things that your potential clients and customers see, they feel closer to you.

Using Location to Make Ads Hyper Relevant

One of my favorite strategies that Dennis and I discussed is using location in your videos. Mention the location in the actual video where the person is saying it, mention it in the caption, and then geo-target that area.

It's incredibly relevant. It doesn't even matter what the content is about. It could be "do you have a bug problem" or a story about how you started the company or how you fixed someone's problem. It doesn't have to be relevant to the viewer in any other way except location, and it will still perform.

When people see "wait, you're in Glenview too?" or "you're in Hillsboro too?" they feel like it's calling them out specifically.

Dennis gave me an example from a friend of his, Brady Sicker, who runs a seven-figure agency serving churches. He also has an eight-figure agency serving chiropractors.

The initial screen on the video says something like "Neck pain in Branson, Missouri" in huge letters. People scrolling in Branson, Missouri see that and think "oh, that's me."

For churches, it might be "Looking for a new church home in Orange County, California." In that first frame, like setting a thumbnail on YouTube, you have huge letters. Do the same thing on TikTok and Facebook.

Then you literally say the same thing in the first three seconds. "Hey, did you have an ant problem in Newport Beach?" And then you show some clips or you introduce yourself.

"Hey, I'm Dan and I run Newport Beach Pest Control and we have seen everything. Don't be afraid if your house is dirty with cockroaches and all that. We'll come in and take care of it. This is my number. I've been in business 23 years. Call me. When you click on that button, you're going to talk to me or one of my people because I care."

Then you tell the story about how you started the business, your family, what you do, and you'd love to connect and see if you can help.

The Number One Question for Auditing Facebook Ads

I asked Dennis how a company owner or their assistant can check to see if their Facebook ads are actually doing well and delivering ROI.

Dennis told me the first question he asks: "How many calls over one minute am I getting from my Facebook ads?"

The most common answer when he's asked hundreds of times? It's not even zero. It's "we don't know."

Why? Because they didn't tie their call tracking system (CallRail, Service Titan, whatever they're using) to the Facebook ads. This is what Dennis calls digital plumbing, tying all the data together.

There are companies like LeadsBridge (Dennis is involved in these companies, full disclosure) that specialize just in connecting Facebook lead data with your CRM. Maybe it's HubSpot or some plugin on WordPress or House Call Pro, whatever it is.

You have to connect the Facebook data to the CRM. There's this technical thing called the Conversion API which Facebook will use to pass data back to the CRM and vice versa.

When you pass the CRM data to Facebook and you run ads, now Facebook can see: of the people who engaged (maybe it was some random post like "so and so just got married"), two or three months later that person became a client.

Even if they didn't see another Facebook ad but they later became a client, pass that signal back to Facebook. Do you think Facebook can do a better job with their advertising if you're passing back the data of who's becoming a customer? Of course.

This includes uploading your custom audiences, which are existing customers, people who didn't come through Facebook but your existing CRM. Pass through your last five years of customers to Facebook saying "these are my customers, find other people just like that."

Now you're connecting the data with the content and the engagement, and the system is working on your behalf.

If you don't connect the data, then Facebook's just in the dark. They'll just show whatever goes most viral. Oh, you posted a picture of puppies. Well that got high engagement. Did it get you any pest control clients?

The number one question is how many calls am I getting through Facebook. Sort of question zero is did you even connect the data to see whether that was possible.

Dennis told me 90 percent of agencies say "well, we do social media. We're not there for whatever happens with the phone. If it turns into a customer or not, that's not on us. We're here to sing and dance and post on your Twitter five times a day."

But last Dennis checked, you are a local service business owner, not a social media celebrity. You're not trying to go for 100,000 followers. You're trying to make the phone ring.

So why don't you take the phone ringing signal and pass that to Google and Facebook and LinkedIn and Twitter? Pass it all over to them and say "I'm going to put money in your machine and content. I'm tying my data together. Now system, work on my behalf."

Where to Start With Tracking

Dennis simplified something that sounds incredibly complicated. He told me to follow the money.

Forget edge rank and clickthrough rate and hashtags and views and backlinks and all this weird technical stuff. Start with where you are making the money.

What is the system you log into where you see customers? Phone calls that get turned into quotes, scheduled jobs, the thing that makes you money. Your CRM.

Start there. If you're using one of the major systems (not something you built yourself), if you're using one of the major CRM systems, it's on that system to build the connections back to your website (which should be WordPress), to Google, to Facebook, to Twitter.

Most of the major systems probably have integrations already built. But your social media person has no idea these things exist. Your website person doesn't know because they just build websites. Your agency is doing whatever they're doing, but 99 percent of the time they don't get into the nitty-gritty of connecting this data.

This whole thing is called digital plumbing. Dennis sees people who are SEO experts or Facebook ads experts or Google PPC experts. They say "I just focus on Facebook ads. I don't worry about this CRM stuff. That's all this integration technical stuff. I just post on your Twitter three times a week."

As long as they check the box saying they made posts, they think they did their job.

No. You only do your job if you make the phone ring. That's it. It's very easy to measure: is my phone ringing and can I clearly tie it back to the activities that all these people are doing?

Dennis likes Service Titan and Salesforce for companies that are over $10 million, but those come with pros and cons. All of these CRMs are basically the same thing. There's a call that goes through potentially different levels of qualification, that turns into a quote and/or a job, and a customer paying.

The majority of CRMs are all kind of about the same. It's fractured because every industry has a couple of CRMs specific to them, but the concept is exactly the same. The data model behind it is exactly the same.

Therefore, passing that data back to Facebook and Google is actually the same thing across all industries.

My Main Takeaway

1. The biggest thing I learned from Dennis is that the single biggest mistake local businesses make with Facebook ads is not starting with what's already worked organically. You cannot hire an agency to create amazing content from scratch and expect it to work just because you're spending money on it. The content has to resonate with your community first, and the only way to know if it resonates is to look at organic engagement. Dennis's 10 percent rule is the diagnostic: if you reach 100 people and at least 10 people are liking, sharing, commenting, or engaging in some way, that content is a candidate for turning into an ad. If you don't hit 10 percent engagement organically, no amount of advertising budget is going to overcome that failure. This completely reframes Facebook advertising from "create ads and hope they work" to "identify what already works and amplify it with ad spend." Go back through all your posts from the last few years and find the pattern of what got at least 10 percent engagement, then figure out what those posts have in common and create more content like that.

2. The second takeaway is that you need all three stages of the funnel (awareness, consideration, conversion), and it takes 60 touches before someone buys from you. Most local businesses only run bottom-of-funnel conversion ads asking people to call now or book now, which is like proposing marriage to someone you just met. That used to work on Facebook 15 years ago, but today you have to build awareness first by showing who you are and what you stand for, then consideration by sharing deeper stories about neighbors you helped or your involvement in the community, and only then conversion when they actually need your service. The research Dennis did with Facebook shows it takes 60 times of seeing you across social media before people buy, which is 10 times more than the traditional rule of six from TV and direct mail advertising. This means you need at least 60 pieces of evergreen content stacked at the top, middle, and bottom of the funnel so Facebook can show the right content to people at the right stage of their customer journey.

3. The third insight is about CPM as a diagnostic metric for whether Facebook thinks your ads are good or garbage. CPM stands for cost per thousand impressions, and if you're paying north of $50 (and Dennis bets most local businesses are paying above $80 or even over $100), Facebook is actively telling you that your engagement rate is so low and people don't like your content, but they're happy to take your money anyway. Dennis sees averages of $15 to $20 CPMs for campaigns that are doing it right. What changed is that Facebook and Google used to just shut down your ads if the quality score or relevance score was too low, but now they'll keep showing your ad and spending your budget, you'll just get maybe one-tenth as many people seeing it. So your $1,000 ad campaign might have been dead after the first $20, but Facebook will happily spend the remaining $980 showing your ad to almost nobody because you set that budget. This is why tracking engagement and CPM is critical, it tells you whether the algorithm is working with you or against you.

4. The fourth major takeaway is the importance of digital plumbing, which is connecting your CRM data back to Facebook so the algorithm can optimize for actual customers, not just engagement. The number one question Dennis asks when auditing Facebook ads is "how many calls over one minute am I getting from my Facebook ads?" and the most common answer is not zero, it's "we don't know" because they never connected their call tracking system to Facebook. When you connect your CRM to Facebook using tools like LeadsBridge or the Conversion API, you can pass data back to Facebook showing which people who engaged with your content eventually became customers, even if they didn't become a customer immediately from clicking an ad. You can also upload your last five years of existing customers as a custom audience and tell Facebook "these are my customers, find other people just like that." When you connect the data with the content and the engagement, the system works on your behalf. If you don't connect the data, Facebook is just showing whatever gets engagement without any idea whether that's actually driving business.

5. The fifth and final insight is that you should focus on storytelling with local elements, and you don't need professional Mad Men level creative to succeed with Facebook ads for local businesses. When you try to be Nike as a pest control company, it doesn't work because people don't expect that from you and it's not authentic to who you are. What works is showing everyday stuff like your technicians, your new van, celebrating a team member's wedding anniversary, or just talking about the weather and your town. The elements in your stories should be things your potential customers recognize, like specific neighborhoods or locations within your city. When people see locations they know or situations they identify with, they feel closer to you. When you combine authentic stories with specific local references and then geo-target those exact areas, you create what Dennis calls the local celebrity effect where people feel like they know you before they ever meet you. You can run these ads for as little as $1 to $5 per day per post, and Dennis has posts from years ago that are still running and performing well because the stories are evergreen.

Where to Find Dennis Yu

You can connect with Dennis Yu and learn more about his dollar-a-day strategy and local business marketing approach through his training programs and content. Dennis has been teaching local service businesses how to leverage Facebook advertising and digital plumbing for over a decade, and he regularly shares insights from his work with both enterprise clients and small local businesses.

Dennis emphasizes that if your business is struggling, if you have bad reviews, if you're brand new, if your technicians don't do a good job, if you don't answer the phone, don't invest in marketing until you fix those fundamental issues first. Do great work, get great reviews, build authentic content showing your involvement in your community, and then amplify that with advertising.