Is Facebook Advertising Worth The Investment?

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December 11, 2012
Adam Marquardt Adam Marquardt

Earlier this year, BBC tested Facebook ads for a fictitious small business called VirtualBagel. For one week, BBC set up display ads to boost fan page likes. The conclusion? Facebook ads are a waste of money.

“The BBC’s tech correspondent Rory Cellan-Jones spent a whole $10 on Facebook ads to promote the page, adding a little targeting to each to reach a potential audience of ‘112 million customers’ and garnered 1,600 likes within 24 hours,” Mike Butcher wrote for Techcrunch. “VirtualBagel turned out to be popular in Egypt, Indonesia, and the Philippines, but not in the UK or U.S. where bagels are more typical fare. However, most of the people who liked the page appeared to have fake profiles which had also liked a bunch of other random pages.”

Bad news for marketers and small business owners, right? Not necessarily, and here’s why.

High-Yield Campaigns Need Smarter Designs

BBC’s study design was flawed in the sense that it misused one of Facebook’s core value propositions – robust demographic targeting. Businesses do regularly find success on the platform. If your business is based in U.S. or the UK, then why would you target other international customers?

Consider the case of Tough Mudder, for instance. 

“By combining geographic data with all other metrics, [Tough Mudder’s Media Team] has determined that for every dollar spent on Facebook ads, the return is $5 to $10,” Issie Lapowsky wrote for Inc. “That’s a figure sometimes echoed by larger advertisers, too. The Wall Street Journal explained that by using geotargeting data to track Unilever’s ad spend on Suave beauty products, Unilever got an $8.41 return on every dollar, according to Facebook.”

Success with Facebook advertising relies on efficiency and precision. You cannot simply jump in blind and expect instant returns.

Rich & Multifaceted Social Targeting Features Are Key

On Facebook, marketers have access to a robust set of targeting tools that include geotargeting, age segmentation, gender targeting, interest segmentation, and community connections. There are even advanced targeting features that let you reach audiences based on relationship status, language spoken, education, and employment. All of these targeting features are available at the ad level.

If you’re not leveraging a mix of these targeting features, you’re not fully utilizing the platform tools available.

You need to ask yourself some core questions --

  • What are your advertising goals?
  • What audiences do you want to reach?
  • Are Facebook’s targeting features an effective way for you to reach your objectives?

Develop a strong end goal of achievement prior to your campaign. And check with an experienced marketer to see if Facebook is truly the correct advertising medium to reach your end goal. If you're looking to build an audience and community interested in your products or services, Facebook may be the correct option. If you're looking to encourage a whitepaper download to collect lead information, then search engine PPC campaigns may be a better bet.

Display Ads Are Designed Help to Promote Brand Awareness and Engagement

Facebook display ads enable marketers to create visually appealing ad campaigns. With a small thumbnail image, you can showcase your product or an otherwise attention-grabbing photo – something that you simply cannot do via Google PPC. And typically, photos encourage more engagement all around.

You can also choose which pricing model – CPM vs. CPC — makes the most sense for the campaign that you’re running. For instance, if your goal is to purely expand your brand reach, you may want to buy ads on a CPM basis only. If your goal is more quantitative, CPC will usually be a better choice.

Residual Organic Connections

If you’re thinking about advertising on Facebook, don’t forget about the platform’s social component. The ads that you run – especially when pointing prospects to your fan page – will generate residual organic connections. This effect is ingrained within the social nature of Facebook’s social platform.

When your mom sees that you’ve liked a page, she may go check it out too. Same with your spouse – and best friends. You are constantly fueling each other’s momentum to discover new products and brands. From an advertising standpoint, these residual organic connections lower your per-user acquisition costs.

Final Thoughts: Know What Fits

Facebook won’t work for everyone – that’s why you need to know why and how you’re using the platform before you spend your first dollars. Some initiatives will be a mismatch for Facebook’s social platform. For instance, you don’t want to be running direct response ads to an ecommerce site – people are on Facebook to be social, not to shop. A branding campaign on the other hand may be a better solution.

Also, it’s tough to ignore click fraud issues, but to be honest, this is a problem with virtually every ad network out there. When running ads, watch your returns with a skeptical eye, and if you see something that you don’t like – talk to your account manager. You need to be as proactive as possible.

Not sure where you want to send new prospects – to a landing page on your website or to your Facebook community? Only you can decide where the strongest returns will be and remember that there is no cookie cutter ‘right’ answer. In order for Facebook advertising to really work, you need to pursue what fits. If you’re not sure where to start, just jump in. Run a test. See what works. Or, call us.

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