

Facebook is alleged to be a Ponzi scheme. What is your ROI? - tomrod

I found this text interesting: http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme<p>I thought it would be beneficial to discuss ROI from facebook ads. What are you seeing for your business ROI from Facebook ads?<p>I recognize there is a selection issue with this data; however, I suspect the average HN reader knows more concerning successful advertising campaigns than many.<p>So what are you seeing? Putting more money in than getting out?
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cd34
Original article needs some basic education in economics. It certainly isn't a
Ponzi scheme, but, that is a different discussion that already happened - and
appears to be dead or searchyc doesn't find it.

I ran 2 campaigns this week for a hobby project. Decided I would throw $100
into the wind and see what came of it. This is the ad that played from their
preview, I didn't think to screenshot it from the profile view:

<http://cd34.com/hr.png>

Targeting

    
    
        * who live in one of the countries: United States, Canada or United KingdomSee More
        * age 18 and older
        * who like apollo 13, nasa, space shuttle or space shuttle program
    

First run, 46849 impressions, 28 clicks, cpc $.34, Spent $9.56, resulted in 1
confirmed action, 1 that possibly bookmarked. Ad was paid based on $.50/cpm

Second run, 41890 impressions, 28 clicks, cpc $.80, Spent $22.40, resulted in
1 confirmed action. Ad was paid at $.80/click.

So, from that minor test, we can conclude absolutely nothing. In order to have
any chance of valid data, we need two or more confirmed actions. So, what we
did conclude is that it appears paying facebook by the impression for a non-
branding ad is a little more cost effective in this case. Until we get a 2nd
confirmed action, we really have no idea. What if the next view generated a
click, our ratio would be halved.

What I think I can conclude from the first two tests is that the landing page
(the twitter account) was an extremely horrible place to drop someone off. I
ran out of time to get a nicer landing page which I will probably do before
Apollo 13.

Key points, I'm not selling a product, I make no money from the project, but,
was interested in testing a few things as a precursor to something else. It
wasn't worth $30 to me for 2 followers on a twitter account. I do believe a
better designed landing page rather than tossing someone to twitter would
increase conversions substantially. There is still residual traffic from it,
and it has gotten two more followers, but, I cannot attribute those to
facebook.

Now, that is data collected this week. Historically, I can say that the ROI is
marginal, but, most of the items I've advertised are not impulse purchases.
Getting a person to contact us and the requisite followups close the sale. As
far as lead generation, I would say that it is not a bad deal, but not great.
Because of the way the pricing works, once you can figure out your ROI, you
bid what it is worth to you, the people outbidding you eventually figure out
they are paying too much, and the bid prices get regulated.

I would bet that 90% of the people complaining about their ROI on any
advertising, aren't tracking enough metrics to even know why their advertising
isn't working.

