Stronger Evidence that Facebook Ads Work

I’ve commented before that my post last February about Facebook advertising effectiveness, “Do Facebook Ads Work?,” is by far the most visited post on this blog and it continues to draw traffic. I followed with one on targeting that I think is important, though it hasn’t been as popular. Every time I do some research on Facebook ads I find something that I didn’t previously understand. This time it’s “social context.” I had seen it, but I didn’t really understand its source or its value.

What started me thinking about it was recent articles on the growth in Facebook advertising. Tuesday’s eMarketer newsletter pointed to huge growth in Facebook ad revenue.
Commentary in AdAge that pointed out that, “what is surprising is the majority of revenue, 60% or $1.12 billion, was earned from smaller companies in 2010, those more likely to be using self-serve tools rather than work through a media agency. That's greater than the $740 million coming from major marketers like Coke, P&G or Match.com.” In November, ComScore figures had revealed that Facebook was now the largest online display advertising publisher, with over 23% share.

Growth, of course, only implies advertising effectiveness; it does not document it. The most compelling piece of research (full document below) goes back to April, and after I read it several times, I began to understand the “social context” issue. Nielsen has identified three kinds of ads—ads with and without social content and organic impressions. Facebook doesn’t use this terminology in any of their advertising material that I can find. Facebook simply points out that all Facebook ad formats have the Like icon at the bottom to encourage social content. This page shows a homepage ad that has no social content. It also shows a homepage ad with social content; that happens if one of your friends has “liked” the brand. The final type is what Nielsen has termed an “organic impression,” a notice on the page of a friend of a user who has liked or engaged with the brand. Facebook uses the phrase “may appear on the news feed.” I couldn’t find out what “may” means here.

This chart from the same study shows that both types of ads with social content are more effective in recall, awareness and intent. Personally, that doesn’t surprise me because I tend to find myself paying attention to the names first and only secondarily to what they liked! Isn’t it human nature that when we see names of people we know, we pay attention? The study is brief, so page through it if you need more detail.

Advertising Effectiveness: Understanding The Value of a Social Media Impression

View more documents from Victor Rodrigues.

So how do you get more people to like your brand so they can appear in these ads? (Facebook’s privacy policy seems to give implicit permission for your name to be used when you like the brand. There is supposed to be a way to disable this feature, but I don’t know anyone who knows how to do it.) That makes the strategy issue for marketers getting more people to like their brand in the first place. And the best advice seems to be the simplest—just ask them! That’s what Virgin America is doing on the ads above. Going a step further, you can create something called a “reveal tab.” That allows you to make a members-only offer—to ask people to like your brand in order to get an incentive of some kind. These are two simple strategies that can add to your fan numbers.

And the point of all this is that the more fans you have, the more likely they are to show up as social context in your ads and as items on their friends news feed pages. That gives your ads the aura of being recommended by a friend of the viewer. And it has a high probability of making your ad more effective!

And so it goes in the wonderful world of Facebook!

Targeting Your Facebook Ads

Far and away the most popular post on this blog in recent weeks has been one written back in February, “Do Facebook Ads Work?” The answer was a strong “yes,” and research since then, including interesting findings on ad formats by Nielsen, continue to confirm that. A recent article in Bloomberg Business Week recounts the interesting story of the Nike “Write the Future” ad that was huge during the World Cup and goes on to talk about the importance of Facebook friends and the “like” function to Facebook advertisers.
















To demonstrate, I wrote a hypothetical ad on Facebook; that’s Step 1. Step 2 shows the main aspects of the targeting process. The advertiser can target by location (essential; no one needs to reach all 500 million Facebook fans!) and by demographics—age and gender only. So far, not different from traditional media advertising, and it works like Google AdWords as far as the setup is concerned.

Then comes the difference! On Facebook, the advertiser can target by “Likes & Interests.” This shows Facebook’s own description of a user profile. The implication seems to be that this is all data that the user has provided on the profile page. Not exactly. Every time the user “Likes” a friend’s post new data is created. What else? It’s not entirely clear exactly what/how other data provided by users like location data is collected and used. Prof. Eben Moglen of Columbia University Law
School says Facebook is “spying for free all the time.” You can read a summary of a recent speech in which he lays out the privacy concerns, but that still begs the question of exactly where the marketing data comes from.

The richness of the data is not in question, however. Nor is the usefulness of the Estimated Reach tool. Each time the potential advertiser adjusts any one of the targeting filters, the ER changes, so the exact effect of each descriptor is known. That data alone can tell you a lot about potential market size in a given region—no cost except expenditure of your time. Farther down on the targeting page, not captured in the graphic above, is the ability to target to your page (or groups) own members and, separately to their friends. Using the ER tool on your own page can give you fascinating insights into the composition of your fan base. Do you see a new market segment representing an opportunity you were not even aware of? Or do you see that you don’t have as many people from your target segment as you wish and need to run a campaign to get more friends.

All this creates a rich stew of research and advertising opportunities. You can access all this information from the Advertising text link at the bottom of your Facebook page, whether you are an individual user or have a business page.

The final piece of good news is that you don’t even have to buy an ad to experiment with the options. Why don’t you give it a spin???

Do Facebook Ads Work?

I’ve always understood the conventional wisdom to be that ads on social networking sites like Facebook don’t work well. The reason given is that people go to social networks to network—communicate—and don’t pay attention to ads. Harry Gold of Overdrive Interactive mentioned in my class recently that they had purchased an ad on Facebook’s home page for Harley-Davidson, which has had great success on Facebook. That started me thinking. This chart makes the point that Facebook is now the third-largest site for display ads, so something is going on!

Facebook ads (except for major placements like the home page) work like Google’s AdWords. The advertiser creates ad content; selects targeting options; and sets budget, scheduling and payment parameters. The mechanics are the same; the targeting is completely different. The AdWords targeting that most of us are familiar with is by keyword (content). The basic targeting options on Facebook are demographic; everything from gender to birthday. There is a keyword filter that is based on items from the profiles of Facebook users. That’s different from the search-based keywords of Google but it’s an interesting possibility if you’re looking for, say, fans of a particular rock band. It’s self-service, so there’s a strong help page associated with the main advertising page.

Ok, it’s easy to set up a Facebook ad. Question is, do they work? The answer, of course, is partly dependent on your objectives.

It’s not arguable that a lot of people would have an opportunity to see an ad on Facebook. According to Inside Facebook’s analysis of site data for January 2010, “More than 108 million people are now using the site every month, up from nearly 103 million people before.” The absolute numbers can be disputed, but the trend has been relentlessly upward for a long time. The post has more information about the composition of the Facebook audience and growth segments. The stats are fascinating, but don’t make the mistake of thinking that Facebook is a broadcast network. The real possibility is microtargeting of ads.

Data from comScore, accessed on the Inspire Media blog, give some insights into the effectiveness question. All users were asked where they would be likely to notice advertising and User Generated Content sites ranked below both news and content sites and corporate sites. Another question, presented for the 18-34 age group, is very revealing. The type of sites that score highest by a large margin is music/ movies/ entertainment. Makes sense, doesn’t it? These Millennials want the opinions of their peers when it comes to use of their leisure time, something they find on the social networking sites, including Facebook. That should make them more receptive to advertising there for leisure activities. Note that consumer electronics, travel, and apparel also score relatively high on the “likely to notice” metric; I hypothesize that the reason is the same.

Noticing is nice—do they take action? Click Through Rates (CTR) are not high anywhere. One well-known marketer gives the average for Facebook as 0.01 – 0.05%. Search ‘Facebook CTR’ for a lot of anecdotal evidence that CTRs are low but can be impacted by strategy.

You also see the occasional story about finding motivated buyers on Facebook. Those are super-anecdotal, but you might find this case history on the Facebook advertising page instructive. Think about the product category and the ability to target, both by age and relationship. Again, it makes sense, but it’s also clear the Facebook ad was supported by an active lead management program.

So I’m back to my point about microtargeting. In a lead generation campaign (and that’s one of the obvious marketing objectives), the quality of the leads is more important than the quantity.

Reaching the right people with the right message is always important. Does Facebook advertising make sense for your product/service? Here are some links that may help you think about that question for businesses (1, 2), for small businesses, or for non-profits.

More recent posts on Facebook ad effectiveness:
Targeting Your Facebook Ads
Stronger Evidence that Facebook Ads Work

Digital Moms on the Move

Every so often I get energized to write a post on moms on the web. I’ve done Mommy bloggers—who they are, how to reach them, and the importance of transparency. The latter was before the FTC proposed regulations and guidelines.

Moms have always been purchasing agents for their households; now they have digital tools to do it. The chart from the Razorfish/Café Mom study shows the digital channels moms use, categorized by mainstream channels used by over 50% of moms, mainstream used by about 1/3 of them, and emerging used by less than 25%. eMarketer adds to this picture by pointing out that moms are using their smartphones to do things like searching for recipes online. Think of the opportunities for reaching them in the course of such activities, but also note that the best way is not advertising in many channels, especially mobile. The second chart suggests that ads on social nets get a rather small amount of attention and even less action. Awareness? Maybe.


What made the subject top of mind was a headline in Marketing Charts a couple of days ago: “Retailers Can Lure Moms with Social Media, Free Stuff.” That’s not exactly a surprise, but the chart on what promotions moms find most influential is interesting. It’s also interesting that moms are more influenced by everything than are adults in general—the purchasing agent effect in operation. What interests me even more when I look at this chart is the ways in which marketers can reach moms with the promos they care about. Just a few examples:

• Notify moms of Product Samples In-store on their social networks (message your fans, advertise to others) and by reaching out to the ecosphere of mommy bloggers
Actually, that advice hold true for most of the items on this list.
• Use the database from Store Loyalty Cards to reach moms with permission email and mobile coupons based on behavioral data.
• In-Store Events and Parking Lot Events can be Tweeted to build excitement and momentum.

Think about it: what promotional techniques should you be using? How can you notify moms that they are available?

Ponder this quote from the RAMA study that produced the promotion data:

“Retailers who aren’t engaging customers through social media could be missing the boat,” said Mike Gatti, Executive Director for RAMA. “Twitter, Facebook and blogs are becoming increasingly popular with moms as they search for coupons or deals and keep in touch with loved ones. The web provides efficient, convenient ways for brands to stay in front of their most loyal shoppers and attract new ones.”

He’s being tactful! Unless your women customers are all over 80, you need to be actively pursuing social media strategies—listening and engaging, not advertising. Otherwise, the boat goes without you!

Facebook, Advertising and Revenue

You may have read the article in Ad Age on Tuesday that talked about Facebook’s continuing quest for ad revenue. It touted a number of types of “engagement” ads. I decided to do an inventory of my own page, groups, etc. to see what I could find.

First, I simply looked at Facebook’s advertising page. All that is offered on the public self-service page is Facebook Ads, small text or image ads with targeting options. There’s an interesting feature though—you can add “social actions” to your ad. That brings it into the social sphere, but I’m not sure how the URL of the DIY blog connected to Meredith or the Dave Matthews band, neither of whom I have any known connection with. Nor do I know how this aspect of the ad would change over time. But it is social!

Events. Because of the nature of my Facebook Friends, I get event invitations all the time. An interesting one is from C.C. Chapman who is drawing attention to a Charity:Water event. It’s a Twestival; if you can’t figure that one out, visit the website. When you do, notice that there’s a Connect to Facebook app on the Twestival page. Good connectivity.

Become a fan. I don’t do much of this, but it’s obvious why products, services, organizations, etc. would want you to become a fan so they can communicate with you, right?


Comment on a video. I didn’t really expect any videos with comments on my page; it’s just not the sort of thing I do. However, I checked my inbox and found that Sheldon Muddle, who has a site called Carib Life Central, had sent me a message about a video, on which I can comment. Check it out, but be sure your volume is down low.


Send virtual gifts. I don’t do this either, but it was pretty easy to find. Interestingly enough, it was the first fee-based service I found. At $1 per 100 credits, it doesn’t look as if Facebook is going to get rich on this app fast.

Poll within ad. Career Builder, as part of its Super Bowl program, invited viewers to vote on who would win the game and see the results on Facebook. The Cheezhead blog does a good job of explaining the process and points out that Facebook could make this one self-service if it becomes popular.

That’s Ad Age’s list of the “engagement ads.” I found another example or different type, I don’t know which, on my own—not very active—page that I would add to the list. It’s the Sponsored ad by Dell which encourages me to Wiggle into Social Media by “fanning” Dell’s Social Media for Small Business blog. That’s at least interactive—I’d call the way Dell is using it engaging. I got two different versions of the Dell ad while I was going back and forth and a different ad later appeared.

If you look back over this list of sever different ad formats for Facebook, only 3 of them Ads, Sponsored, and Gifts give Facebook a revenue stream. The others are essentially apps, free to corporate or individual users.

I long ago described Facebook as a metaphor for Web 2.0. Both its successes and its struggles mirror what’s going on around the world of social media. Monetization is one, but certainly not the only, issue.

It seems to me that Facebook is a good place to see a lot of things that are going on in social media. Have you made your Facebook page yet? Are you seeing other marketers doing interesting and potentially useful things there?