Facebook 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.
- Determine how Facebook was obtaining their figures
- Did Facebook prioritize CPC campaigns over CPM – thereby earning more revenue for themselves with less “work” (server time, clutter for users, etc.)
- 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
The 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.
Great article, Nathan. While not with as much analysis as you did, I experienced similar disappointing results with Facebook ads in regards to my blog when I tested it as well. I dont see many “successful” FB ad campaigns nor do I hear about many unless its coming from FB themselves.
Thanks, Arnold. Now that you mention it, I think the only success stories I hear come from Facebook. Not that it makes them less genuine, but they seem to be more exception than rule.
Good point.
For your ads, were you promoting a particular post or the blog in general?
Interesting results…I run ads for automotive clients and other industries and find them to be “successful” in my opinion. However, I use them only to gain new targeted followers and promote posts to current fans to generate engagement and never to “advertise” per se.
I used to work with the Facebook Auto Outreach Team when I was with ADP/Cobalt and they gave me some great tips to improve ad click thru’s. One thing I can see off the bat from your ad above is that your image doesn’t have a bright colored border and the image isn’t close up enough. They told me to improve CTR that I should choose pics of close up faces with really bright borders, which was key to drawing the eye to the ad. Plus you don’t have a call to action, which would be fine for a CPM brading model, but for CPC you’re not going to get anywhere with it unless you have something like “Click “LIKE” for info” or something like that.
Not trying to be critical of your ads by any means, but in my experience after learning these tips directly from the guys at Facebook I found that my CTR was much higher than industry standard (FYI it’s only .04% for auto-related ads according to FB). I will continue to buy Facebook ads for my clients since I truly find value in them in terms of fan acquisition and engagement.
Cheers,
Jessica
Thanks for commenting! And for future reference, don’t worry about criticizing me. I’ll be the first to imperfectly tell you I’m not perfect.
Due to the size of my company, I was fortunate enough to get some one-on-one consultation with Facebook ad experts and they gave me the same advice they gave you. Faces, borders, little to no text, etc. After that conversation, we built an ad campaign using their recommendations and did, indeed, see a slight uptick in CTR.
However, as much as I would have loved more traffic, the main goal of the test was to ascertain if Facebook was misrepresenting their targeting (or click measurement) system and it seems obvious to me that they are. Putting Megan Fox’s photo in a red border wouldn’t have skewed those particular results.
It is interesting that you bring up using FB ads for “Like” campaigns. After growing tired of the URL-targeted ads, we created a “Like” campaign and the CTR did MUCH better. But in a way, this reinforces my point. Facebook prioritizes the things that benefit Facebook. Can you imagine if Google PPC/Display ads only took you somewhere on Google+? Sure it would be great for Google, but horrible for the user.
Thanks again for the feedback. I would love to keep in touch and have further discussions about Facebook advertising.
Thanks for the insight Nathan, very interesting reading.. We at Caliber had considered targeting this field as well, and seriously, after reading the information contained in your blog, I think we’ll wait and try another avenue.
Look forward to hearing how all your further testing goes and Thank You again.
Mary Fiore
Caliber Automotive Liquidators
I hope to have an update soon. We have an SEM vendor who has a partnership with Facebook and I’ll be working with them on our next campaign. They have access to more detailed metrics as well as targeting capabilities. Will certainly keep you posted.
Thanks for commenting and please share this with anyone you know in the business. I’m looking for as much feedback as possible.
What’s happening Nathan?! Great article my friend. I think that “Success or Failure” in Facebook is all about perspective. Your goal was to figure out how they were prioritizing and delivering ads, you found out, that is a success. It’s not what you had hoped for, that’s a failure. However, I think that FB should really be look at as an advertising medium. Look at it, not only compared to Google, but look at it compared to other advertising mediums….TV, Radio, Print, Direct Mail, etc….Then define what makes for an effective advertising medium. 1. Reach. 2. Target-ability, 3. low cost. – Facebook is very effective. I think that you are sooo in the right mindset. I wish more businesses looked into Facebook. I know that you’re seeing the future, and your provocativeness and willingness to dig into it are admirable. Keep in mind that they’ve only just started to get into this game. Think about all the problems that Google had early on (and currently if you look into other products such as Plus Local, etc) – Give them boys some time. I think that if you step back and think of Facebook as the new, modern day Radio, it starts to make a lot more sense. Keep up the research my man, I’m subscribing to this blog!
Great article Nate, now I wish the street would aknowledge this problem a bit more. I’m curious if other companies will come to this realization over time, maybe we’ll see a transition to more of a CPM platform than the CPC? If this is the case it’d seem to be detrimental to their (facebook) business model. Then again, a CPC campaign seems more targeted to small business than say Coca Cola. Very curious as to how this will all play out.
Again, great article.
Steve.
Thanks for the compliments, Steven. Your check is in the mail! 😉
I, too, am curious why this topic isn’t more vigorously addressed. It seems to be such a glaring manipulation that Fortune 500s should have figured it out years ago.
Regarding the CPC/CPM model, I think both have powerful uses for large companies like Coca-Cola. They can utilize CPM (branding) campaigns for logo, tagline, or endorsement awareness. But CPC (direct response) campaigns can be very helpful in driving traffic to a microsite, contest entry form, 3rd party partner site (i.e. American Idol), etc.
General Motors very publicly exposed the con but even now, Facebook’s revenues continue to grow in the opposite direction of its stock price. Could they really be capturing that many new clients to make up for lower retention?