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Business, Client Solutions, Facebook, Marketing, Marketing Strategy, Social Media, Social Media Marketing, Target Market

Do Facebook Ads Really Work?

I wish I had a dollar for every time someone asked me that question. I’d have enough money to place an awesome Facebook ad campaign! But then, of course, I’d be asking myself, is this a good use of my new-found income? Am I going to see that elusive return on my investment (ROI)?

Time to put my research hat on and find out some answers. Just to give you all a mental picture, my research hat looks a lot like Gandolf’s the wizard from The Lord of the Rings series. Mostly because I’m a huge fan of the movies and if it can make Gandolf look wise, I can only imagine how I could rock a pointy hat to make me think I’ve gained some knowledge.

By now, most of us have heard of or have even placed a Google Adword campaign. We know the difference between a Google ‘organic’ search and one down the right side that’s been paid for to generate clicks to a company’s website. Like Google, Facebook has different types of ads that include the typical display ads (which appear to look like Google ads) and a new type of ad called Sponsored Stories where the Facebook users generate the ad’s content.

With over 800-gazillion people on Facebook, you’d think that this would be enough to convince everyone to work the concept of Facebook ads into their marketing budgets. My cool-looking inspired Gandolf hat research told me otherwise. While it’s a pretty basic program to setup your Facebook campaign, the click-through-results (CTR) results seem to be less clicks for more money then what you’d get from a Google campaign.

An independent analysis from Webtrends on more than 11,000 Facebook campaigns showed the average CTR for Facebook ads in 2010 was 0.051%. I learned this number is about half of the industry standard CTR of 0.1 percent. If a high CTR is one of your benchmarks for an ad campaign, then your company may want to make sure you’re using this type of marketing in conjunction with other Facebook strategies like contests and creating engaging content with a strong call-to-action.

Many of the Facebook ad success stories I found where due to the effectiveness of content of the ad (like the addition of images and the way the text was worded) combined with relevant and entertaining posts on their fan pages. The end result for most of these success stories were an increase in likes and traffic to their websites. Most people admitted it was hard to determine whether an increase in their sales came directly from the Facebook ads or if these folks were already fans on their Facebook pages.

While there were some similarities with the Google Adwords, I found there were also many significant differences. The costs of your ads on Facebook are built on a marketplace system like they are on the Google program. You pay based on either the number of times people see the ad or the number of times people actually click on it. The majority of people tended to choose the latter as it appeared to be more cost effective.

The biggest difference I found was how to target your ads. While Google appears to be mostly geo-location based, you were able to narrowly define your target with your Facebook ads. Facebook lets you pick and choose which groups to reach by creating a niche target. You can specify who you want to reach based on a user’s profile information, such as age, gender, location, relationship status and interests (the fan pages they like). You’re able to target people who are fans of your company’s Facebook page or friends of your fans. You can also advertise only to Facebook users who mention certain words in their profiles or status messages. Now we’re cooking with gas!

The takeaway from my research was the incredible information your company could gain from running a few Facebook ad campaigns. While I can’t guarantee your company will increase your sales just from the use of these ads, you will gain significant results from the targeting information you compile as you work through the process. Who wouldn’t want to get CTR results to help them clearly define their target market down to the age, gender and interests of their customers?

Now I’m off to do some more research … I’m really digging the hat and I need an excuse to keep it on for a few more hours.

Have you used Facebook ads for your company or for a clients? What were your results?

Photo credit: Gandalf the Grey



4 thoughts on “Do Facebook Ads Really Work?

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  1. Pingback: Is Your Company Marketing to the Millennials? « Fox Interactive Consultants - 04/12/2012

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