
Facebook marketing? Don't bother, says new report - codegeek
http://www.cnbc.com/id/101151565
======
jccooper
We found Facebook PPC ads to be about twice as expensive as they are worth,
and well under-performing Google. We shut it down. But that was based on
direct conversions; I guess if you're doing branding you might have a
different calculus.

But I'm not surprised to find that other companies don't find it worthwhile
either. I'm not putting much effort into the "free" art of FB marketing
either.

~~~
thomasd
Hmm, this is interesting. What we've found is the direct opposite. Facebook is
4 times cheaper than Google for us. But I suppose the nature of our companies
are different. We're in the movie industry and Google search on movies that
were released a couple of months ago are almost always queries looking for
pirated sources.

~~~
jccooper
Interesting. I can imagine how ads on such searches would do poorly!

We sell custom bottle caps, and usually people searching for terms in that
area are looking for something like us (or us in particular) and are ready to
buy. So search advertising is good for us; but even targeted to home brewers
we didn't get much traction off Facebook, where people aren't usually looking
to buy. It was worth a try, but not a good fit for us. I do think it has some
general branding/awareness use, but that's hard to quantify, and we don't
really need that right now, certainly at FB's prices.

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wyck
The big take from this is not the effectiveness of Facebook for marketing,
since it can and is done successfully, but rather a rant by marketers on the
amount of exposure Facebook's algorithm gives them.

The situation is that brands small and large spent lots of money building up a
following, but when they post something it only gets exposed to a fraction of
the followers. The argument is, why should I spend money getting 100k
followers if you only show my posts to 15k (or less) of them at any given
time.

On one side, more brand exposure degrades the Facebook experience from ad
inundation, on the other side marketers are not seeing the value for
time/money invested.

This has always been the thorn in the side of not just Facebook, but most ad
driven revenue models. Since Facebook is a social experience it's a challenge
that's tricky to navigate, they can't exactly bend over to marketing products
and services, that would be a disaster, but the tools and feedback for
marketers leaves a lot to be desired.

~~~
jonnathanson
Indeed. There's nothing wrong with Facebook as an advertising channel, when
used effectively and with expectations properly calibrated.

There's a _lot_ wrong with blindly throwing money at a Facebook "fan page" and
an ostensible following, expecting miracles to happen and any of those
followers to care. (There's also a problem involved in paying for the fans,
then reaching a fraction of them with each update -- but that's the nature of
how Facebook works, and that shouldn't have been a mystery to most marketers
for quite some time now.)

What we're experiencing right now _isn 't_ a "revolution" in advertising, as
the article suggests. But then again, it's the marketers' fault for expecting
there to have been one in the first place. They bought, traded, and sold the
hype. Big brands made relatively blind, multi-million-dollar commitments to
Facebook and other social channels before stopping to think about what,
exactly, they were hoping to achieve.

What those brands are learning today: there's no such thing as a magic bullet.
There's no such thing as a free lunch. There's no such thing as a "revolution"
in marketing. Nothing will allow you to grow a fanbase, increase engagement,
and sell more products without an ounce of forethought and hard work.

Facebook is a channel, like any other. It can be a very effective channel. But
like any channel, it needs to be thought through, analyzed, and used properly.
The blind honeymoon is over. The platform's usefulness remains.

~~~
the_watcher
>> There's a lot wrong with blindly throwing money at a Facebook "fan page"
and an ostensible following, expecting miracles to happen and any of those
followers to care.

This has actually been by far the worst way of making money off of Facebook in
my experience - and I do this full time.

~~~
jonnathanson
Agreed. The whole "fan page" thing can be a total money pit unless a marketer
knows exactly what he's trying to get from the investment.

Conversely, I've had _fantastic_ results from targeted ad buys on Facebook. In
particular, mobile app install buys. Great results, decent tracking, easy to
analyze from an ROI and LTV standpoint.

Just because you can target people by #anything doesn't mean they'll care
about your content. Your content has to _fit_ what you're targeting and whom
you're targeting. I feel as though a lot of brand marketers -- ordinarily
extremely smart people -- lost their senses about this when they first jumped
on the Facebook bandwagon. I've seen some very sophisticated AdWords buyers
treat Facebook like a Magic 8 Ball, for instance. It blows my mind.

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morganb180
A few things:

1) Facebook allows you to do some ridiculous targeting, that when combined
with retargeting can create some powerful stuff. Check out Marty Weintraub and
your head will explode.

2) Our Facebook ads (esp. retargeting w/perfect audience in the news feed)
work far better than Google and Goog retargeting.

3) We've found Facebook ads to be great re-engagement tools. People who
created an account but have been in-active or didn't complete setup are re-
engaging via Facebook ads, leading to more active users.

YMMV of course, and being dumb with any ad dollars is always a bad
idea—regardless of platform.

~~~
thomasd
Yes, exactly! I'll like to add a few more points.

\- The approval process for FB ads is dead simple. Ads are usually approved in
minutes vs Google day(s) long wait. The longest it'll probably take is a 1 to
2 hours (usually as a result of a new image upload). This makes it very easy
to iterate and improve upon your result

\- FB gives pricing flexibility. You can choose whether the objective is for
branding (CPM) or if you're looking for conversion (CPC, CPA). The ad units
lets you focus on your objective

~~~
morganb180
Agreed. I also like the bulk uploader and power editor. It's easy to launch
200 variations of ads in a matter of minutes.

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ameister14
Their argument that their targeting creates massive value is only correct so
long as their competitors don't catch up. Linkedin, though, is building out
its advertising tools and API and allows for really good targeting based on
more accurate job positions than Facebook can provide, which is often more
useful.

If a company pays for their facebook likes through advertising, why should
they then need to pay again to advertise to this same group of people with a
sponsored post? It really changes the ROI of a facebook like.

~~~
duaneb
Google Ads target people who can't tell the difference between search results
and ads.

LinkedIn succeeds because they have ads people actually want to
click—virtually everyone needs employment, and generally jobs are far more
valuable than anything else advertised online. Any given ad for employment
will be many, many, many times more interesting to any given person than any
given ad on the internet will be.

Facebook has very little worth selling to a young audience that will never
click online ads. Who goes to Facebook to find ways to spend money? It's a
social network with little relevance to commercial interests (for end users).

Market-specific businesses will almost always beat out the special
interests—facebook would probably get more money selling users to specialized
advertising customers on demand, or even getting users to pay to make
ads/stupid "features" (Games! Anything involving microtransactions! Bugging me
to like things I have no desire to like!) go away.

Speaking of which, how is the model of pay-to-remove-ads not more prevalent?
Surely it wouldn't REDUCE profits.

~~~
c0ur7n3y
Well, I think Facebook would have a hard time making the transition from
advertisers being their customers to users being their customers. They'd have
to listen to their users if they did that. That sounds expensive.

~~~
duaneb
> They'd have to listen to their users if they did that. That sounds
> expensive.

You know what else is expensive? When everyone hates your brand.

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_nate_
Facebook pay per click remains a mystery to me. We are huge PPC media buyers,
but we gave up on Facebook a long time ago. We’ve experimented with it over
the last year or so when new features were implemented, but in general, it’s
at the very bottom of our marketing budget as well. I used to think it was
something we were doing wrong, but this report suggests a lot of people aren’t
finding value there as well.

It really seems that when people are on Facebook, the one and only thing they
pay attention to is their friends and personal interests, and it’s very
difficult for ads to convert that interest.

~~~
patmcguire
What industry are you in?

~~~
_nate_
We think it has a lot to do with our demographic. We’re a research and
publishing company and our customers are for the most part consumers over the
age of 35. With that being said, I find it hard to believe our demographic
should be a hindrance, considering FB is massive and now spans the general
population. Furthermore, there are tons of options and means to target our
specific demographics. Yet FB leads have the lowest conversion rates seen
anywhere and in general every attempt at using the system fails. (once again,
we are highly experienced PPC buyers)

Either way, we’re fine spending our budgets elsewhere and understand that FB
is working miracles for others. We’ve just always been vexed by the FB
advertising hype and this report helps to validate for us that not all markets
work for everyone.

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affmkter
Ha.

I've been an affiliate marketeer for quite some time now, doing FB ads and I
can tell you, FB ads DO work: both for the affiliate and the advertiser.

Last month I generated around 50K rev in comisions (around 60% profit) and the
advertiser even increased my payout because the leads are converting to paying
users.

Of course this is not always the case, but in general they do work and quite
good I might say.

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the_watcher
This report is so wrong it's painful. "Likes" are great, but that's not the
most valuable ad type on Facebook. In fact, in our most successful ads, I
intentionally exclude people who have liked us (why would I pay to reach
people who already know who we are?). Facebook ads have been the single
biggest win for us of the past year, as we are seeing 80% of our Facebook
customers are new to us.

A useful framework I have used to explain to people the value of Facebook
advertising is to imagine the internet as a hardware store. Someone goes to
the hardware store because they need a hammer. Google would be the aisles with
signs and directions to get there. Once they are there, and waiting to check
out, they see things like gum, or energy drinks, or keys, etc., that they
needed to be reminded that they wanted. Facebook is more like the checkout
stand, as it can remind or introduce impulse purchases that the intent
leveraged by Google intentionally excludes.

Facebook is also much more similar to hyper-targeted television ads.

------
mehuldesai
Im going to comment on the model for Facebook and how it seems unnatural and
forced. With Google, the user has indicated intent via a search or visiting
some site of interest. Google associates ads based on the content which is
based on the users intent to find information.

Facebook for their newsfeed and ads on the right seemed to inject ads right
into content and force some portion of its users to see them. The user likely
never wanted or had any intent on seeing anything but friends posts. Thus its
not surprising many users may not participate with clicks. Its interesting
from the article on bus insider that the click thru rate is high for news
feeds. I suspect that forcing ads in the middle of a friend to friend
conversation gets the users attention and some clicks. However, is it what a
user really wanted to do in the news feed. The user wants friend-to-friend
information. Facebook for the news feed ad inclusion reminds me of TV
infomercial or tv ads but on a channel that the user themselves value. A bad
experience overall.

What can drive real conversions is user intent. A user wants to find
information or opts in to an ad channel, then you'll get very good click thrus
and conversions. Thats why i like Google's model so much. However, google
suffers from a hit or miss approach on actual content and its value. however,
as we know, the page rank/etc... tries to make computers get a good match.

i think if we can have a social fabric that is truely social and valuable and
not polluted by injected ads that may be very very valuable. I think Facebook
could suffer a demise more and more for this ad strategy they have. Ads,
promotions, attractions should be a fun and willing experience not a forced
one. Perhaps this is an idealist view. comments ?

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steveplace
Yes. Facebook marketing is dead. You shouldn't even try it and just go to
other places. It's literally impossible to get a positive ROI there so just
move along, nothing to see here.

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jayzalowitz
Hiring people that have no idea how to market: Dont bother says me.

I know people cleaning house marketing there. Groupon is doing an exceptional
job for example.

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littlemerman
The difference between the top and bottom result in the survey is 0.3 on a
scale of 5. Given the small sample size of most survey research my hunch is
that these differences are directional only.

Here is the original report:

[http://blogs.forrester.com/nate_elliott/13-10-28-an_open_let...](http://blogs.forrester.com/nate_elliott/13-10-28-an_open_letter_to_mark_zuckerberg)

------
the_watcher
One problem I see with people bashing Facebook ads is that it is definitely
easy to burn money quickly on Facebook chasing things that seem profitable.
For example, we found some very small targeting groups that generated
extremely good CPAs initially, but they were so small that once we saturated
them, our overall CPA skyrocketed. Once we established what was risky and what
was less risky, we've been able to keep our numbers strong - mainly by using
Custom Audiences, lookalike audiences, and competitor segments. Facebook also
takes much more active management in terms of turning ads on and off than SEM
ads. However, a huge pain point for those of us in places where we seem to
have come close to maxing out growth from search. Facebook has helped us
address this, since it seems like there is a substantial portion of Facebook
users who simply haven't heard of us, and Facebook is way cheaper than TV ads.

------
tomgruner
Facebook marketing is great for some things and horrible for others. It is
good for building up a brand that has a cool image. Here is an easy test,
would the thing you are advertising interest somebody at a party, or would you
promote it to your friends as something interesting or valuable without
receiving any payment in return? Is it something that has intrinsic social
value, or is it just a product that you are trying to spam people with? I have
seen real results in FB advertising for building up artists and musicians and
growing their own fan base. But, for selling products it has not worked out
for me to be a good ROI.

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rebel
As someone with an array of absolutely massive fan pages (> 3 million fans on
some), that are completely legitimate, I'm getting a viewing percent of < 1%.
Unpaid marketing on Facebook is useless. It feels similar to extortion that
I've built up so many people who have specifically asked to receive
information about my websites/products via Facebook and Facebook wants to
charge me over $5,000 PER status update just to reach MOST of my fans. I've
learned my lesson on investing into the Facebook platform

------
janj
Is Facebook vulnerable to people not taking Facebook and its 'likes' seriously
anymore? I've started liking every page that is 'suggested' by Facebook only
because I've grown bored with Facebook and was curious what result this would
have. I started thinking about the implications of this becoming a trend and
it seems Facebook would lose most of its value to brands and companies if
Facebook 'likes' stopped corresponding to real world 'likes'.

------
kposehn
"Everyone who clicks the 'like' button on a brand's Facebook page volunteers
to receive that brand's messages — but on average, (Facebook) only shows each
brand's posts to 16 percent of its fans,"

This is due to the way EdgeRank works - you get low exposure if you make page
posts that do not get viral uptake. I know people that routinely get over 70%
engagement because they make content that people, you know, _like_.

~~~
thomasd
There is a problem with a focus on getting "likes". It doesn't convert.
Neither does it increase sales. It's a vanity metric. I just wrote a post to
explain how small of a mileage like actually brings for the effort exerted.
[http://thomasdiong.com/post/65443615643/social-media-
vanity-...](http://thomasdiong.com/post/65443615643/social-media-vanity-
metrics)

~~~
kposehn
I've never pushed for a focus on getting likes; instead, it is just one stage
in the conversion funnel.

I consider them akin to email addresses, just with a much more variable ROI.
You do have to manage your fan base, cultivate it and engage it as you would a
large mailing list. They are definitely not a direct revenue driver though.

As an affiliate I've not used FB pages to profit, but I've got a few friends
in the industry that have pages with massive followings. They are very skilled
at monetizing their followers, but it is also an extremely tough thing to do.
It is definitely not for the faint of heart - or wallet :)

------
SimpleXYZ
The problem is user commercial intent: "I need to spent $3600 on a new thing
for my thing. I'd better search the web with Google to find it." "I need to
find out what my ex-girl friend did last Saturday. I'd better go to Facebook."

The average Facebook cost per click is about $0.80. I would be a buyer at
$0.04 cost per click.

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oddthink
I would be shocked if those survey results were statistically different from
"the same." The spread from the top (YouTube) to the bottom (Facebook) is 0.11
on a 1-5 scale, with a sample size of 395.

If I assume a std deviation of 1 (which seems low), that's 2-sigma, total,
top-to-bottom.

------
nhangen
Facebook retargeting and general CPM advertising works well, but don't bother
trying to build your fan page likes/numbers.

FWIW, we spend about $40/month getting to 1k+ likes, and only 35-50 people, on
average, see our non-boosted posts.

To be frank, it really pisses me off.

------
patmcguire
Shameless plug, my employer has done pretty well with direct marketing on
Facebook, which from this thread seems to be way more common here than it is
elsewhere (I guess branding's more corporate?) So if you're curious shoot me
an email (it's on my profile).

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chrisgd
There is no point to making a forecast unless you either say the "sky is
falling" or "utopia ahead" since no one will remember your prediction
otherwise. Nuanced predictions are only for those not selling something.

------
brandnewlow
This is silly. At Perfect Audience, we have thousands of customers making
anywhere from $5-15 for every $1 they spend retargeting on Facebook. Yes, it
takes work and some testing. But to say "don't bother" is silly.

~~~
FireBeyond
At the risk of “citation required”... Really, you can show “thousands of
customers” who generate up to $15 of income for every dollar spent with you?

~~~
brandnewlow
I won't, but I can, sure. Check out this post on our blog about a guitar
teacher using us to sell online lessons through a combination of Facebook ads
and banner ads: [http://blog.perfectaudience.com/2013/10/24/retargeting-
micro...](http://blog.perfectaudience.com/2013/10/24/retargeting-
micropreneurs-online-guitar-teacher-makes-13-every-1-spent-perfect-audience/)

We track sales and conversions for our customers pretty carefully to make sure
we're producing results.

Also, I said $5-15 in sales. That's a big spread :)

------
droob
"Give us $499 to substantiate these inflammatory headlines," says new report

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jliptzin
Our experience has been that FB ads for a particular service/site work well
for about a week, and then the cost quickly rises to the point where it's no
longer worth advertising there.

~~~
the_watcher
That's about right. Their ads do have an insanely short shelf life relative to
other paid ads. You have to be aware of this and plan for it. However, an
engaging ad will continue serving long after you stop paying for it, which
helps mitigate this.

