How does Facebook Advertising work?

The Basics of Facebook Advertising

Targeted Ads in the Right Rail – Facebook allows businesses to promote themselves to a specific set of Facebook users.  You can choose to show your ad to specific people based on their location, age, gender, education level, relationship status, specific interests, etc. etc.  You can easily create an ad by scrolling to the bottom of any page on Facebook and clicking on “Advertising“.

Ad Components – Each ad has four elements:

1. Headline (25 characters)
2. Description (135 characters)
3. Image (thumbnail size)
4. A Link – You can send traffic to a specific Facebook page for which you are an administrator or your own website/landing page.

So How Much? – Ads can be run on a cost per click (CPC) or cost per impression basis (CPM).  Typical cost per click rates vary from about 35¢  to $1.65 depending on the level of competition.  You can choose to limit your budget on a daily basis (e.g. $50 per day) to control spending.

Think Banners, Not AdWords – No one is actually searching for the information these advertisements provide like they would in Google, Bing or other popular search engines.  Seth Godin calls this, “interruption marketing.”  A click through rate (CTR) of 0.05% is actually pretty standard for Facebook Ads.  Please note, that is not 1 click in 200 ad impressions.  It’s 1 click in 2,000 impressions.

And Why Should I Use Them? – If your goal is to create awareness, bring in more Fans or to promote a specific event or deal, Facebook advertising should be considered as a component of your plan.  You may also consider focusing on providing amazing content on your Facebook page, enlisting current customer contacts from an email database or those who frequent your site, or even promoting your Facebook presence with other mediums.

Now that you’ve got the basics, here are some tips to help you best utilize Facebook advertising.

1. Choose Selects Carefully – Despite the fact that typical click through rates are so low, people will click.  It’s important to make your campaign as narrow-focused as possible to get a good result.  Do you have two or more primary audiences you are looking to target?  OK. Create two or more ads.

2. Adhere to the Guidelines – This tip really goes without saying, but here’s a quick primer on some of the guidelines that truly matter.  You cannot offer incentives in exchange for providing customer contact information or clicking on the ad.  No ads for tobacco, guns, gambling, drugs, adult toys/videos, hate speech and ring tones.  Ring tones have to be the most incorrigible from that list. Ads for dating services or sites must be targeted at Single people.  Sorry, Ashley Madison.  Anything related to alcohol must be targeted to people over the age of 21.

3. Run Multiple Ads in One Campaign – This is important not only for targeting purposes but also for testing.  You have the ability to run multiple ads in single campaign all pulling from the same daily spend.  Test different audiences, different messages, different graphics, different offers, different pricing models (CPC vs. CPM) and bids, etc.  Find out what works and then test again.

4. Refresh Ads Often – Unlike dealing with Google Adwords’ quality score in which campaigns must gaini a certain level of impressions, clicks and “trust” before they rise in paid search rankings no matter the bid, Facebook ads spark and fizzle quickly.  Ads are given great momentum to start and then the level of impressions an ad is given slowly falls off.  Modify your ads at least once per week to get the best results.  Big companies running campaigns with huge budgets (upwards of $1,000 per week) should alter their ads every day.

5. Check Out Connections Targeting – Recently released by Facebook in November ’09, Connections targeting allows advertisers to target people who are connected to a page, event, group or application.  One caveat is that you must be the administrator/owner of the page, group, app, etc. Connections helps save from wasted clicks if you are trying to target people who are not already Fans  of your page.  You can also target friends of your Fans, which may be beneficial considering friends likely share similar interests.

This entry was posted on 9. January 2012 at 18:40 and is filed under Marketing, Managing Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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