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facebook advertising experiment
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Facebook Advertising Test Results

facebook advertising experimentFacebook has been receiving a lot of criticism lately for their lack of a cohesive mobile advertising strategy. I’ve been a voice in that chorus. Before their IPO, they lost General Motors – one of their largest advertisers and arguably their largest automotive client. But at least 50% of their traffic comes from desktop computer users, so for that and a variety of other reasons, I continued the modest Facebook advertising campaigns Moss Bros. Auto Group was running each month.

Metrics Do Not Measure Up

The results of those campaigns never seemed to add up. We had tried cost-per-click (CPC) campaigns, cost-per-thousand (CPM) campaigns, various geographies, and used broad as well as specific category/keyword targeting. Results were usually disappointing regardless of our parameters, generating click-through rates of less than 0.1%. Bust most importantly, Facebook’s metrics never matched the traffic we received on our website according to Dealer.com (our website provider) or Google Analytics. Here are figures from one particular campaign:

Time frame: 8/29/12 to 9/3/12

Facebook click claim: 85

Dealer.com inbound traffic count from Facebook: 30

Google Analytics inbound traffic count from Facebook: 24

Even the best case comparison has a massive discrepancy of 65%! Keep in mind, I was paying an average of $1.18 per click. That means I could have seen more than double my actual traffic if Facebook wasn’t misrepresenting its figures. It was that discrepancy -that misrepresentation- that lead me to run a test.

I had been wanting to explore the benefits of Facebook advertising for my personal blog. Could it help me capture a new audience? Could it garner some additional attention to this new online endeavor I had been working so hard to grow? This seemed like an ideal moment to test it while simultaneously learning for my employer.

Test Parameters

The setup was simple enough and I hoped to learn a few things.

  1. Determine how Facebook was obtaining their figures
  2. Did Facebook prioritize CPC campaigns over CPM – thereby earning more revenue for themselves with less “work” (server time, clutter for users, etc.)
  3. Facebook’s effectiveness at growing a blog’s audience

Here’s how I setup the test:

  • Create identical campaigns: graphic, headline, copy, geography, category targeting, date range, and budget
  • One variable: payment metric. One campaign was CPC, the other CPM
  • Analyze traffic data according to Facebook and Google Analytics.

I must humbly admit that the campaigns were failures at generating new repeat traffic for my blog. You’ll see in the screen captures below that I generated traffic and maxed out my budgets on both campaigns, but they weren’t engaged readers. Bounce rate was high and traffic has remained flat since the campaigns. Sure, that could be my fault. After all – its my blog. But let’s look at the campaigns themselves.

Facebook Advertising Test Results

Facebook Case StudyThe image to the left (click to expand) shows the results of the campaigns as well as their setup.

Obviously, Facebook did a great job prioritizing the CPC campaign over the CPM. They showed it to fewer people, fewer times, and reached the budget cap. In short – more profit for less work.

And that’s my issue. The ads were identical and so was the targeting. The results should have been the same. The ONLY thing Facebook could have done to skew the results was misrepresent the actual delivery of the ads. There is no way they were shown to the same audience, despite my instruction to do exactly that.

And that is something I want to be very clear about. I had a contract with Facebook. Specific terms were agreed upon. Furthermore, the Facebook Statement of Rights and Responsibilities and Advertising Guidelines don’t disclose that they may adjust your targeting based on payment method. In today’s digital world, advertisers have become conditioned to simply accept the “secret sauce”. We take for granted that we don’t know exactly how our results are generated, but we expect them nonetheless. This is a huge mistake for our industry and will only weaken our ability to accurately measure ROI, select the best media for our products, and hold that media accountable for a mutually beneficial relationship.

Facebook’s Response

Since this test, I have stopped all advertising on Facebook. The ads they run on the right side of the site are obviously rigged for Facebook’s benefit. That said, I have a second test planned: sponsored stories. These ads appear on desktop and mobile devices so I think its worth another foray.

I really wanted an answer from Facebook and two weeks ago I got it. A fortuitous event occurred when I attended Digital Dealer 13 and one of the keynote speakers was from…you guessed it…Facebook! He was a Client Partner for the automotive industry. In addition to the keynote speaker, another Client Partner was hosting a breakout session about Facebook advertising. After the session, I introduced myself and presented my problem. He was a very nice guy and honest in his response. It came down to two things: “priority” and “assumption”.

You see, Facebook assumes your intention by how you pay for your ads. If you want clicks, they assume you will select CPC billing. If you want to brand something, they assume you will select CPM billing. They prioritize the delivery of CPC ads because the goal is to generate clicks and they aim to provide them. I believe this is a faulty assumption. Logically, because all of their ads must include a link to something (Facebook Page, website, whatever), they should assume ALL campaigns want clicks. If I just wanted to “brand something”, I wouldn’t include a link. My ad would consist of a pretty picture and impactful text. Done.

Toward the end of his explanation, his colleague (who would later deliver the keynote) joined the conversation and concurred with the explanation I just received. Both said that Facebook is constantly tweaking its ad platform and new products will soon be introduced that I may want to look at in addition to the current “True View” system they have for measuring ad metrics. I intend to look into them all.

Conclusion

Facebook is gaming the system. I knew as much after the test. I haven’t advertised since. But is that a good idea? Along with Google, Facebook is an 800lb. gorilla. They have 1 billion users worldwide. Is that an audience that -as General Motors did- I can simply create a Page for and hope they find it? The alternative is that I now know how the Facebook advertising system works and I can probably work more effectively within it.

My jury is still out on whether or not I will use Facebook advertising again for a campaign. Thanksgiving is coming up and we always do a substantial amount of advertising for the holiday season. Facebook may not be included. Either way, I promise to keep you posted.

Your Experience

What has been your experience with Facebook advertising? Will you reconsider running ads there? Do you think I’m nuts and the test proves nothing? Okay. Tell me why in the comments below. I respond to all.

Facebook Chairs Have No Point

The new Facebook Chairs ad doesn’t tell me anything about the social media site or their one billion user milestone.

What is this spot telling me? Facebook has a place for everyone? I wasn’t aware that was a concern. “Gee, I hope Facebook has room for my account.”
The whole spot seems like a last-minute idea-by-committee concept that an Art Director approved because he liked the way it made him feel. According to the agency, Wieden + Kennedy, they were working on this for more than a year and “spent months meeting with Facebook staffers and getting to know the company”. Months of research resulted in chairs, doorbells, airplanes, and basketball games. Not a good sign.

But my problems with the spot go beyond the items used. How about knowing the difference between a chair and a bench? In their chair-oriented segment, they show a bench three times. A bench isn’t a chair. But it would have been a better analogy because benches are meant for more than one person, like a social media site. A chair is intended for one. Alone. Separated.

Facebook ChairsBy far, the most perplexing item included is “the universe“. Something so vast, empty, and unknown to us that we will can’t traverse it in the next 10 generations of humanity. I’m not sure how this makes us feel connected.

Wieden + Kennedy have made some amazing spots in the past for a variety of great clients. But Facebook Chairs should not go in the portfolio. It poorly communicates a strange message from a recently beleaguered client grasping for positive PR. There are plenty of people at the agency and Facebook who should have said, “we need to start over”.

What do you think of the new commercial? Share a comment below.

Social Media on Rubiks Cube
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6 Social Media Rules for Business

Social Media on Rubiks Cube“You’ve got to get a Facebook account!”
“Everyone’s on Twitter.”
“Pinterest is the best. It will help you spread the word.”

Ignore the social media hype

All of the above quotes are myths. Works of fiction. They could also be bad advice for a business owner. Social media isn’t for everyone. Like any tool, it is only as effective as the person who wields it. There are certain people and certain businesses who won’t reap great rewards from being on Facebook, Twitter, LinkedIn, Pinterest, Path, Google+, or the myriad of other Silicon Valley start ups.

Who should be on social media?

If you are serious about using social media instead of being on social media, then you have a wide swath of territory to cover and many benefits to be discovered. The social networks should rarely be used as individual pieces. Even Google -operators of Google+- encourage linking between sites for reasons of relevance, link building, and verification.

I still believe in the old adage that the best advertisement is positive word-of-mouth. A good referral remains the most trusted form of business advertising and this is confirmed in study after study. At its core, social media is about broadcasting word-of-mouth. Courteous service, a broken appliance, buyer’s remorse, or an easy buying process are all things we might hear from someone. But most of our friends and family aren’t experts. They’re average consumers who are sharing a story from their perspective. Seems like an odd thing to base a decision on. Shouldn’t a purchase be made after a bit of research?

Maybe not.

Opinions matter. It is the experience of others that matters more today than ever before. Those opinions no longer rely on one-to-one conversation. Every person has their own bullhorn to broadcast their opinion and potentially reach hundreds, thousands, or millions of people.

Those opinions are about you and/or your company. Every little moment can be rebroadcast through social media and live forever. This is one of the ways your business can use social media.

If you’ve made the choice to include social media in your business, make sure you tackle the fundamentals.

Rule #1 – Build and Use a Plan

Your business doesn’t succeed on luck. It takes knowledge, planning, and efficient execution of that plan. Social media is no different. You can’t create a Facebook Page and hope for people to find you. Here are some core elements of a social media strategy:

  • What do you hope to achieve?
    • Brand awareness
    • Drive website traffic
    • Build a fanbase (“Likes”)
    • Stay in touch with customers
    • Receive more leads
    • Increase e-commerce/social commerce
  • What social networks will benefit you?
  • Will you hire someone in-house or outsource to a third-party vendor?
  • Who will be responsible for your social media development in the company?
  • Other than personnel expenses, do you need to create a social media budget for promotions? How much?
  • When will you review  the plan, make adjustments, and measure success or failure?

Rule #2 – Stay Consistent and Committed

Don’t anticipate success as soon as you launch. Social media is about word-of-mouth, distributed content, and becoming a resource for your customers and potential customers. All of these things take time to work.

Your plan should have a content calendar of what will be posted and when. Stick to it. Visitors appreciate reliability and knowing when they can expect to see more of your great content. Every business will be different in their approach to meet the expectations of their fans. You may encounter a negative customer comment or a lull in user activity but none of these are reasons to quit. Let your plan develop and reach its milestones before you waive the white flag.

Rule #3 – Have Customer Conversations

One critical element is to interact with your customers. Each compliment is a new advertisement for your business and each criticism (even the dreaded public ones) are opportunities to turn a customer from angry to happy.  When you do this, it shows current and potential customers that you care about their satisfaction and work hard to earn their business. It also has the added benefit of showing you have actual human beings working in your company. A company with no emotion can turn off potential customers because they feel you don’t care.

Rule #4 – Share and Share Alike

It is tempting to view social media as a new advertising platform to blast the latest and greatest sale. This is a mistake. People have Liked your Facebook Page or Followed you on Twitter and these are special invitations into their social media experience. Don’t bore them to death with self-serving promotion.

Use social media to create a dialogue and keep the interest of your visitors. Post relevant pictures and videos about your industry. Post a joke every Monday morning. Share a motivational quote. Create a poll with an interesting question, or share a piece of corporate or industry trivia. It can also be helpful to reference pop culture or events in the news.

And remember to share content from other relevant sources. If you’re a car dealer, share cool videos from the manufacturer or a customer’s picture in their new pickup truck. Great content can come from anywhere!

Rule #5 – Make Social Media Part of your SEO

Your social networks are part of your SEO strategy. Didn’t know that? It’s true! Google, Yahoo!, and Bing all include social media sites in their results. More importantly, they are using the information you provide to verify your listings.

Make sure you list the same company name, address, and phone number (NAP) on all of your social networks and your website. This is especially true for Google because they are cross-checking your website, your Google+ Local page, and your other social networks and directory listings to ensure they are the same. It helps them verify you are real, not trying to scam people, and they will reward you with better listings in their search results.

Rule #6 – Cross Promote

People won’t know you’re on a social network unless you tell them. Make sure to include your Facebook or Twitter address in your traditional advertising. include links in your email blasts. Encourage your employees to create a LinkedIn profile and include the address on their business cards. Insert a QR code in an ad that links to one of your social media Pages. The ways to promote your social media are endless. Make it creative, relevant, and easy.

So what will this get you?

Social media should reap the rewards you’re looking for. Remember that part of your plan is to set your achievement goals at the beginning of the process. Restrain yourself from declaring victory or failure too early. If social media is right for your business and you do it effectively, you should see a unique growth and recognition difficult to achieve in any other medium.

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Facebook Sponsored Stories Are Insufficient for Mobile

Facebook onscreenFacebook (FB) was reminded last month that being a public company means others will judge your success and a large revenue report isn’t always enough to be a winner. Despite second quarter earnings meeting Wall Street expectations, investors were underwhelmed with the lack of a forecast for future quarters and -of particular interest to this ad executive- the shortsighted mobile platform strategy. The stock lost more than 8 percent the following day and shaved an additional 13 percent from there in after hours and pre-market trading. They opened that Friday with their then-lowest value since the IPO at approximately $23. They closed August 8th at $21.80.

To date, Facebook’s only mobile advertising tactic is Sponsored Stories. But they will need some sort of banner or other visual break from the News Feed if they are going to be successful. Websites today -even mobile ones- offer a variety of advertising opportunities, in part because regular visitors begin to “tune out” the ads they are accustomed to.

Approximately 57% of Facebook’s visitors (543 million out of 955 million active users each month) access the site via a mobile phone. The size of the mobile audience dictates that it must be the focal point of all revenue conversations at the company. Continuing to focus and rely on display ads for the desktop visitor will doom the company.

Are they beginning to address Wall Street’s concern?

Facebook announced last week a new prong to their mobile advertising fork in the form of mobile app ads. Developers will be able to create ads, determine targets, and set budgets, but the ads will still appear as a Sponsored Story in a new “Try These Apps” section of the platform. Even with this addition to the revenue pipeline it still doesn’t overcome the eventual evolution of Facebook users to begin to ignore the Sponsored Stories and read around them. Their fork may have more than one prong, but they have still arrived to the dinner table with only one utensil. In fairness, I believe this new app ad tool will be profitable. As Apple has shown the world, app developers make up a rapidly growing base of profit with a multi-billion dollar customer base behind them.

According to a recent SEC filing from Facebook, 15 million of their users (1.6%) spent real money on virtual goods in social games. That has translated to $378 million in the first half of 2012 for Facebook’s bottom line. But that hasn’t carried to the mobile platform for them yet. Additionally, Facebook only reaps 30% of revenue from in-game purchases. The remaining 70% goes to developers. If developers like Zynga (ZNGA) continue to suffer revenue and stock challenges, it doesn’t bode well for Facebook’s long-term revenue growth in the app market.

The year 2012 will be a success and possibly the first quarter of 2013, but revenues will begin to decline soon after they make their mobile platform more dynamic with Sponsored Stories and users begin to mentally tune them out. Facebook will need more robust yet subtle ad opportunities such as dynamically linked text, pop-ups, and video pre-roll to see genuine and sustainable growth.

Of course, in a worst-case scenario, they could start charging businesses for Pages. That would solve the GM problem.

Leave your thoughts in the comments below.

Top 5 People I Don’t Want on Social Media

There are certain people the rest of us don’t really need to see on social media. Or be followed by. I’m tired of getting their friend requests, follows, direct messages, and otherwise unsolicited content.

Multi-level Marketers

Thanks for finding me on Facebook and sending a DM with the “great news” about a way I can live “the life of my dreams” by working from home. But I’m not really interested. You’re like a missionary telling me how to get into heaven but you haven’t actually been there.

Pornstars

Sending me a spam @ message on Twitter with a bit.ly link to your hardcore slutfest filmed in Van Nuys isn’t going to entice me to subscribe to your website or make me your #1 fan.  I’ll report you to Twitter and get your account suspended.

Dating Sites

I’m sure you’ve created the next match.com and I might find my dream date on your site. But I’m not looking for hot, single cougars in the tri-county area who are just begging to have sex with me (any every other man on your site) tonight. And no, I won’t join today for ONLY $1!

Video “Producers”

Congratulations on learning how to use YouTube! You searched for a topic, found my channel, and added a useless comment to one of my videos telling me how much its just like this video you made a couple weeks ago. Good for you Mr. Spam. Now please go back to filming your cat and pining away until the moment you’re genius is discovered.

Bot Users

For the love of all things holy, stop using lame auto-content generators like “Pic of the Day” or “I answered a question about you”. There are over one trillion photos on the internet. I doubt a piece of spam software found the absolute best one. Every day. And you just had to share it with me.

So please, step away from the keyboard and stop cluttering my feed. I’d like my social media to be more about networking and learning…less about spamming. You’re blocking the MLM pornstars from sending me their dating site profiles with videos of them and their hot cat who can’t wait to answer questions about me!

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