The Facebook Ads dashboard, diagrammed by The Lost Agency (PDF)
In the old days, advertising was sold based on size and demographics. If you put an ad in the New York Times it would reach a lot of people, if you placed an ad in Rolling Stone you’d reach people interested in music. That model, however, is inefficient and expensive. Facebook skips the publication altogether and just delivers the people.
Let’s say you want to target people living India. According to Facebook Ads, that’s 27,706,920 people. Perhaps too much. Let’s narrow it down to Indians that like Disco. That’s 10,660 people, a more manageable market. If you want to be more serious, you can target people by the brands they like, the school they went to or where they work. You can also target by age and relationship status, not bad for wedding planners.
Facebook Ads is so effective that you could conceivably target a single person. Kinda awesome, kinda creepy.
The fun part of Facebook Ads is watching the ads go live. In the old days you’d pick up your copy of the Times and wait for the phone to ring. Now you can watch the people come in through a dashboard, which is actually a huge waste of time that you should be spending on your business. It’s just a bit hypnotic to watch advertising work.
First off, Facebook doesn’t count impressions and clicks. That Google model is beginning to look as old as print. Facebook counts people. You can track the number of people that view your ads, how many times each person sees them (I’ve seen that number go up to 85, which must be annoying) and how many likes and clicks you get.
You don’t get a name and face (which would be disturbing), but you do get pretty detailed demographics. If you do some basic Excel on the reports you can segment the customers by location, age, sex, whatever. On one campaign I found that people over 35 accounted for about 80% of clicks, so this helps you better target your ads, and provide better reports for your boss.
Now the money question, how much do they cost? Facebook Ads are cheap. It depends what you’re looking for, but in my experience they’re not that expensive. Facebook Ads rarely cost more than $1 per click and you can run a good campaign for $20 a day. It depends on the people you want to reach.
I ran one campaign that reached 45,000 people and got over 300 clicks for about $200. I’m running another that reaches less than a thousand and has cost less than a dollar for six clicks (so far). Sometimes the product moves and sometimes it doesn’t, and it’s not necessarily the medium’s fault. That’s marketing.
So, what’s wrong with Facebook Ads? Well, AdWeek recently said ‘the performance of the average Facebook ad is abysmal’.
I wouldn’t go that far, at all. I think that AdWeek is simply measuring the wrong performance. They highlight the click-thru rate of 0.051%, which is low. However, that’s just one metric, and it’s not the right one for Facebook. Facebook isn’t really selling impressions or clicks, they’re selling people. That sounds a bit weird, but bear with me.
What’s the click-thru rate on a newspaper ad? Zero. You can’t click a newspaper, a TV ad, or an event. You can’t click a loyal customer either. They still have value. So do Facebook Ads.
First off, Facebook Ads measure people that connect with your brand or recommend it to a friend. That means they’re listening to you, and they’re talking about you. Once a person is on your page you can keep reaching them with new content, for free. Once they ‘like’ you that promotes you to all of their friends, again for free. That’s not measured by a click-thru rate, but it’s definitely valuable. It’s a connection to a human being.
Second, Facebook ads are better at promoting some things than others. According to an excellent WebTrends report (PDF), the ads work best for media companies and blogs, people ‘selling’ content or ideas. If you’re selling a one-time product, Facebook often isn’t the best thing, but it is good at building an audience. Again, this isn’t measured by a click.
Finally, some clicks are worth more than others. I’ve used Facebook for recruiting and the client has been willing to put up with a low click-thru rate as long as they get in front of the best candidates. You can increase the click-thru rate by changing the targeting, but that’s besides the point. The point is to let the business strategy drive advertising, not vice versa.
There are some serious issues with Facebook Ads. For one thing, the ads are just text and a thumbnail. No banners or video and not much scope for design. The best page real estate isn’t even for sale. Overall, however, Facebook Ads are anything but abysmal. I’d actually call them awesome. They’re cheap, they reach people, and if you’re social, they deliver great results.