
Brands Are Wasting Money on Facebook and Twitter, Forrester Says - selmnoo
http://blogs.wsj.com/cmo/2014/11/17/brands-are-wasting-money-on-facebook-and-twitter-forrester-says/?mod=trending_now_2
======
coenhyde
We were successfully running retargeting ads on Facebook by uploading our
customers email addresses. We were getting lots of conversions cheaply.
Initially CPM was $1.70, then a few months later it was $4, now 6 months later
it's $9. At this point it became unviable.

I spoke to our account manager at Facebook and he confirmed my suspicions.
Every time one of our customers converts though our ads, Facebook assigns a
high value to that user, since that user purchased something through a FB ad.
So now I have more competition to get in front of our existing customer from
our competition who our customer is not interested in. FUCK THAT. Moral of the
story DO NOT tell Facebook about conversions from your existing customers.
Keep that info to yourself.

~~~
spacefight
Maybe also don't leak your customers email addresses to FB at all.

~~~
netcan
Here is a catch 22. In a sufficiently competitive environment, "it's
profitable to do X" quickly becomes "It's essential to do X."

Here is a contrived example that doesn't reflect reality:

There are 10 banks in a market. The banks have a range of new online services.
Adoption of as many of these services as possible is the key to success. A
viable strategy is to retarget customers (segmented by income/family status
and other things that make certain services relevant) and tell them about
various services. This increases the adoption of value add services
substantially.

If one bank takes a moral stance, they either need to live with lower adoption
of their services or spend more via less effective advertising channels.

If Facebook advertising is good enough, that one bank would go out of
business, have its management replaced by shareholders or get bought out by
one of the others.

This probably doesn't apply to banks, but there are businesses where effective
online advertising is the difference between success and failure. All the
tourist/hotel/flight booking sites, for example.

~~~
mseebach
In that scenario, _not_ violating your users' privacy would become a
differentiator for your product, something you could market. Ever noticed how
much advertising in highly competitive businesses seem to hinge on ever more
strained explanations of how one product is different from the other?

Except, of course (and this is probably the ugly truth) - as long as Facebook
doesn't do creepy/embarrassing things or otherwise actively annoy their
customers, the vast, vast majority of customers just doesn't care. And then
there isn't really a problem.

~~~
forgottenpass
Privacy is very much a market for lemons. Lets take two scenarios and see
which is more profitable.

1\. Respect privacy.

2\. Carefully mislead the customer to believe the company respects user
privacy in a way their fuzzy morals tell them isn't a "lie," bury the truth in
the fine print. Lose the handful of customers both technically savvy,
principled and capable enough to not use the product while profiting from
abusing the privacy of their users.

------
unclebucknasty
Man, this is intuitively and empirically so true. I'm not sure who would be
surprised by this study, though some may point to specific exceptions.

But, there are a number of reasons this is obvious, not the least of which is
that people go to Facebook to socialize, not befriend companies.

So, it always felt like a ruse that brands should encourage their customers to
engage on Facebook's turf, as it always seemed that it accrued much more value
to Facebook than to the brands. Why do I want someone else owning or even
inserted between that relationship with my customers?

Yet companies (regrettably, including my own), would even hold contests, etc.,
effectively paying to get more likes from customers they already had! Then,
Facebook pulled their master-stroke of ratcheting down the reach to all of
those fans unless the company paid for it. It really was like some kind of
racket or "minor extortion".

Remarkably, they also really began to push the idea of paying them even more
to get more fans.

So, send you my current customers by converting them to fans, advertise with
you to get more fans, then pay you again to advertise to reach all of them? No
thanks. I'd rather get a good old-fashioned email address.

I look at their ad numbers and I just don't get it.

~~~
shostack
This is the root of my concern with where Facebook and Google are heading.

In the email world, you invested in building your house list, and it was
likely your most valuable marketing asset.

You...

\-- Controlled it

\-- Could associate whatever data with it you had access to

\-- You could (pending deliverability) communicate with them as frequently as
you wanted for a fixed/variable rate depending on what your send costs were.
For most ESPs (email service providers) there is typically a fixed platform
fee, and a variable volume fee

\-- Most importantly, your costs to message to your acquired audience was
relatively fixed which helped balance the variable cost of acquiring them

With Facebook, they abused the trust marketers put into them. From day one the
conversation was about building your brand's presence on Facebook with the
"understanding" you would more or less be able to communicate with your
audience freely once you invested in building the list.

I put "understanding" in quotes because there was of course nothing ever
spelled out...but that was literally how it worked at the time, so it became
understood to be how it worked.

The reality of what Facebook has done and where they are going has changed
that relationship...

\-- They want you to invest a variable (and likely ever increasing) cost to
build your list within Facebook

\-- They own the majority of the data on that list and their targeting tools
are essentially you renting that information from them

\-- They own your list, and want to charge you a variable cost via a black box
algorithm to reach said list at the scale/frequency you desire

It is this last part that is the biggest issue. Email was a space where
marketers had control over their ability to reach their opt-in audience, not
the platform or network. But fixed-price models are not always as profitable
as variable priced models run through a black box.

My broader fear is that Google has come to the same conclusion, and Inbox (and
the tabs before that) is the first manifestation that Google is working on a
serious monetization play for email beyond the horrid Gmail placements in
AdSense and whatever targeting data they may be able to indirectly monetize.

He who owns the ability to reach that contact list has a company by the balls.
End of story. Once you have that, why charge them a fixed rate when you can
maximize profit by tweaking whatever variables you want whenever it suits you
with regards to the costs (ie. the auction model)?

It remains to be seen if Google is going down that path, but it is clear
Facebook already has. There is still hope for off-site ads with them for
advertisers who know how to measure it from a conversion standpoint, and more
importantly, a cross-channel attribution perspective. Social tends to be more
of an awareness/upper-funnel driver when you can see the birds-eye attribution
picture, with some exceptions like mobile app installs that see success from a
direct response standpoint.

Smart marketers will likely focus on owning their audience data to market to
them as much on their terms and a predictable cost structure as possible.
Their continued ability to do so may be largely out of their control however
if the companies who own the ability to reach their "list" have visions of
being more than a basic fixed-price conduit.

~~~
evgen
_With Facebook, they abused the trust marketers put into them. From day one
the conversation was about building your brand 's presence on Facebook with
the "understanding" you would more or less be able to communicate with your
audience freely once you invested in building the list._

Bullshit. There was never this "understanding", just an assumption by people
who were too blinded by greed to do a little simple math. There is only so
much attention to go around and only so many items that can be put into a
persons feed before it loses any value to that person. You were only able to
communicate freely to this audience because there were so few using the
channel. Once it was shown to actually be effective you were competing with
everyone else for that small slice of attention. Welcome to the market pal,
hope you brought your wallet! If a marketer complains because everything they
post each day isn't pinned to the top of people's news feeds for free then it
seems to me that FB is doing it's job. I would much rather have my feed
curated for things that are relevant for me than for every piece of marketing
some store I once liked four years ago wants to send me.

~~~
shostack
The harsh words here are unnecessary and don't do anything for your argument.

There were actually plenty of people using the channel when advertisers still
had the ability to reach their entire fanbase. There was a long period of time
when this was simply the way it worked. Thus, I think it is reasonable for
companies to be forgiven for thinking that they would continue to be able to
reach this audience in the same manner once they invested in acquiring them.

Now, I have always thought email had more value just because of what you can
do with it, but if you tell me to invest in your ad platform to drive people
to signup for me to contact them on a page on your platform, and let me reach
them for free after the initial investment, I think it is perfectly reasonable
to feel extremely cheated when you change the terms of the deal to suddenly
double-dip. There is a reason a large part of the ad industry has erupted at
FB over this and why anyone spending serious money on social these days is
driving all that traffic offsite to places they control, and/or using their
own audience data through a DSP with FB simply serving as a "dumb" placement.

------
walterbell
[http://stratechery.com/2014/dependent-digital-
whales/](http://stratechery.com/2014/dependent-digital-whales/)

 _" These ad units are largely purchased by free-to-play game publishers such
as King (maker of Candy Crush Saga) and Big Fish Games, which leverage
Facebook’s incredible demographic data to target the small percentage of
players who will spend hundreds of dollars on in-app purchases.”

.. So to recount, Facebook is going gangbusters because of ads for free-to-
play games, developers are excited about the chance to cash in via Facebook
ads, Google and Twitter are trying to mimic Facebook’s success, and Google and
especially Apple are hanging their app store hats on the amount of revenue
generated by in-app purchases.

In other words, billions of dollars in cold hard cash, and 20x that in
valuations are ultimately dependent on a relatively small number of people who
just can’t stop playing Candy Crush Saga._"

Many of whom are women, their purchases leveraged up into Valley value. How is
that for irony?

~~~
tomp
I don't see how you reached your conclusion, and why would it be ironic if
true.

~~~
walterbell
The demographic information has been stated by King, maker of Candy Crush.
I'll let someone else explain the irony :)

~~~
spindritf
I still don't get it. Is there something in the name, a pun?

~~~
walterbell
My explanation will be less entertaining than your imagined alternatives :)

There have been recent articles and company statements on workplace diversity
in Silicon Valley, including gender diversity. And perennial debates on how to
encourage more female students to STEM courses of study.

If billions of dollars in Silicon Valley market cap (which drives startup
acquisitions and salaries) are currently dependent on ...

mobile ad revenue, of which a large portion depends on data mining to generate
likely-to-pay customers for ...

F2P games like Candy Crush, which combine time-tested casino techniques with
the ubiquity of mobile phones to addict mostly ...

 _women_ , it means there is an upside-down pyramid of leveraged technology
financing teetering on the psychology of the very subgroup that is mostly
absent from the development community.

~~~
tomp
Well, there goes the argument that SV doesn't understand women because the
engineers are all males! :)

~~~
walterbell
:) Or, how much more efficiently could machine learning algos locate
profitable F2P customers, if there were more female engineers?

Or, would more female engineers choose different mobile
manipulation/psychology models, leading to less harm and more financially
sustainable female "digital whales"?

~~~
happyscrappy
An engineering mindset would outweigh gender.

------
kumarm
Facebook mobile ads are pure crap. Here is a proof if anyone needs one:
[http://forums.makingmoneywithandroid.com/income-
reports/1635...](http://forums.makingmoneywithandroid.com/income-
reports/16351-expense-report-wordsearch-hero-5.html#post91053)

Most installs from Facebook Mobile ads never even open the app once (Yes even
Once).

If you read the post from the same guy, you will notice he actually targeted
to People who play word games on mobile.

~~~
shostack
I would caution against making broad sweeping generalizations (most installs
from FB mobile ads never even open the app once) from one incident where this
one person had an issue.

Companies like King and others have VERY competent teams of digital media and
analytics experts, as well as the engineering resources to implement VERY
advanced tracking.

They would most definitely not be spending the large sums they are if they
were not very confident in the return it gave them.

~~~
hagbardgroup
The reason why these guys are getting cleaned up is because the teams at
companies like King set it up so that they will choke out their possible
competitors with sky-high rates.

Working as intended.

~~~
shostack
Right, but the entire point is that companies like King are continuing to do
it because it is profitable.

------
snowwrestler
The idea of a "social relationship" with a brand was always pretty silly, I
think.

But Twitter is a good tool for PR (because every blogger and reporter uses
it), and Facebook can be an efficient content distribution channel.

I think brands have a hard time on social media when they have nothing
interesting to say. "Like my page" or "download my app" or "tell us how much
you love your toilet paper" are not interesting, and Facebook is doing the
right thing to hide that crap from more feeds.

But if you can create good content, you can spend money very efficiently on
social media. You just need to boost it a bit over the noise floor, and then
folks will share and comment to spread it farther.

~~~
williamcotton
You know how people want to interact with products? By using them. Not
"engaging" with them as an abstract concept on Twitter.

They don't give a crap about having a conversation with a Mt Dew
representative. They do give a crap about a YouTube video of a guy jumping out
of a plane with a wing-suit and if it happens to be covered with Mt Dew logos,
it might just help move some product.

You know what all this "social relationship" and "engagement" talk reminds me
of? Telemarketing. New buzzwords for what seems to be about as effective as
calling up someone while they're eating dinner and trying to talk about their
favorite brand of dish soap.

~~~
define
I think you're comparing apples and oranges as the 'engagemnet' you're
referring to is more 'after sales care/complaints' focused and your Mountain
Dew example is more wow-factor/mainstream branding and awareness.

I'd say the consumer would give a crap about a conversation with said
representative if they had a product complaint and bad experience with the
brand. Furthermore i'm sure they'd prefer to have said conversation on their
terms, in real time, and not after waiting on the phone to be connected with
them. And that's just pertaining to customer feedback where there is a wrong
that needs to be made right.

I also feel like your discounting the power of developing a social
relationship (as an awareness tool) by likening it to telemarketing. People
opt in (Like/follow) Facebook pages / Twitter pages and if they aren't being
provided with value, disconnecting that relationship is as easy as a tap of a
finger, on their time, be it while eating dinner or not.

Social should never be underestimated as a powerful passive branding and
awareness platform which consumers access on their time, on a medium they are
comfortable engaging with.

The difference between get a telemarketing call at dinner time and seeing a
promoted post on Facebook is the consumer psychology before the touch point is
made, i.e. "fuck off, i'm eating" and "entertain me, i'm bored" respectively.

[grammar edit]

------
photorized
That's because those companies are doing it wrong. They view social as yet
another mass marketing channel, one where you spam, convert, etc, and the use
the same Google Analytics/Google Ads type of approach to CPM and 'conversion'.

What they are missing entirely is that, unlike the traditional web marketing
world of clicks and IP addresses, social media gives you an opportunity to
understand your target audience, see what interests them, what influences them
- and lets you interact with them.

Once you truly know the audience, it opens up whole new opportunities for
marketing (subtle product placement, indirect promotion via influencers etc) -
which almost nobody is doing effectively right now.

What we see instead is the same tired web banner concept, clumsily applied to
FB or Twitter, and we're getting inundated by ads (that annoying DOMO 'are you
still using Excel for your data?' ad comes to mind) - no wonder they are not
seeing any ROI.

~~~
hagbardgroup
Which their ad platform is mostly OK at doing. This is about using the social
channels as a business like an ordinary user. Which is overall not a good move
to make.

>Once you truly know the audience, it opens up whole new opportunities for
marketing (subtle product placement, indirect promotion via influencers etc) -
which almost nobody is doing effectively right now.

'Subtle' is actually illegal, but that doesn't stop a whole lot of people...
these kinds of arrangements will deplete the trust of social channels, which I
don't care about, because I expect it to happen, but some of you people might.

>What we see instead is the same tired web banner concept, clumsily applied to
FB or Twitter, and we're getting inundated by ads (that annoying DOMO 'are you
still using Excel for your data?' ad comes to mind) - no wonder they are not
seeing any ROI.

Domo probably sees ROI, even though I agree their product is dumb.

Most banners are mediocre formats because of the way that the human eye tracks
the page. These are increasingly being replaced by in-stream or semi
randomized formats that mimic print tradition more than banner methods. The
in-stream formats used by the social networks are not like banners because

a( they're randomized b( they're within the typical user's eye-path

Those two points go after the banner blindness issue.

I think the bigger problem is that social networking is a fad that may not be
capable of really supporting advertising, just because of the value that users
expect from using them. For the same reasons we hate unsolicited marketing
that comes in by phone, many people dislike advertising that comes in by
social networking.

Girls clip out the ads in Seventeen magazine to save for later. Almost none of
them save-as the ads they see on social networks. I would not care, as an
advertiser, if all the social networks popped out of existence tomorrow and
banned advertising. I would adapt. It really doesn't matter to me whether
these companies live or die.

------
michaelbuckbee
An important distinction: the waste in this case is on "organic" non-paid
interactions with users on the social networks.

For Facebook, this means getting "Likes" on your dedicated Facebook Page (aka
[https://facebook.com/your_brand_name](https://facebook.com/your_brand_name))
for Twitter I'm presuming it's followers of @brandname.

This is separate from the actual paid advertising that the platforms offer -
which is likely far more effective, targeted and profitable than say a
magazine or newspaper ad.

Running a nail salon and want to reach women 18-45 who live in your city?
Facebook lets you target that exactly and clicks to the ads just go to your
website.

~~~
unclebucknasty
> _the waste in this case is on "organic" non-paid interactions with users_

True, but the two seem inextricably linked. Hard to imagine that the
perception of value on one front won't impact the perception on the other.

> _Facebook lets you target that exactly and clicks to the ads just go to your
> website._

This has always been the theory and it sounds really compelling--even
intuitive. But, in reality, click-rates on FB ads tend to be abysmally low. We
have experimented quite a bit and FB ads are consistently outperformed by
Adwords campaigns. This has been the case across different products/services
with different demos. Our experience seems to be common.

Interestingly, the thing we found most effective on FB was promoting our page
through FB ads. But, of course, the value of the fans we acquired is
relatively low, as is the point of the article.

I think this is in part due to the core problem that people are on FB to
socialize and "do" FB. So, they will click a like button, but they don't want
to leave FB.

But, it is ironic that the thing FB ads do best actually creates more value
for FB.

~~~
shostack
Out of curiosity, when you say that FB ads were consistently outperformed by
AdWords, can you clarify on the metrics you were using? Also, can you clarify
on whether you were looking at it from a cross-channel attribution
perspective?

In many cases, a successful conversion might require multiple touch points,
and Facebook can actually be a pretty effective tool for building awareness
and peaking initial interest. There are many marketers out there who will tell
you they have social networks as a high-volume first (or early) touch point,
and then it takes several organic clicks, display impressions, maybe some
email, paid search, etc. before someone actually converts.

Each of those touch points ads some value. Calculating exactly how much they
actually add is at the bleeding edge of problems the ad tech industry is
trying to solve as it is a staggeringly difficult puzzle to solve with any
degree of accuracy. But with the right analytics in place, it is currently
pretty easy to see where certain channels tend to impact the funnel, and if
you can control for it enough in your tests, you can try to measure the lift
they contribute. Heck, you can start looking in the multi-channel and
attribution reports in the free version of GA to get a sense. Of course the
data-driven dynamic attribution modeling capabilities are reserved for GA
Premium (or companies like Adometry, VisualIQ, Convertro, etc. which have all
been acquired by Google, AOL, etc.).

~~~
williamcotton
If a business makes spark plugs and sells them to stores it knows exactly how
much it costs to make the product and how much the stores are willing to pay.
These direct connections between inputs and outputs allow for effective price
discovery.

However with Facebook and Twitter there is no pricing mechanism between what a
user is worth and how much a user costs.

This is a general issue for any business that subsidizes operation costs with
advertisements. Television and radio rely on outside ratings firms and market
research companies to operate efficiently. TV and radio are passive
experiences and advertisements are generally effective for certain kinds of
products. The TV and radio stations are incentivized to make great content for
both their audience and their advertisers.

Google AdSense has a fully functional marketplace where advertisers bid for
keywords. This works because people use search engines to, well, search for
things. A lot of the time they're searching for things they want to buy. The
better the search results, the better the value for both the advertiser and
the user.

People don't go to Facebook or Twitter to search or to buy things. They go
there to communicate, to reference, publish and browse media, and to establish
an identity.

They're fighting their users at every step. Their only course of action is to
own their customers data and control their actions and identity. They cannot
offer privacy to their users because they need to sell that information to
marketers. They can't let 3rd parties have equal access to their users data
and identity. They've got to control and restrict 3rd party clients. They rely
on artificial scarcity.

This hurts both users and advertisers. These inefficiencies and misaligned
incentives are passed on to both parties. It makes for a less effective
marketing platform. It also makes for a worse product for users by interfering
and adding noise to their communications.

The majority of Twitter's product was developed by outsiders. Retweets and
hash tags are the result of a community of users and developers in control of
their own evolution.

However, since the only way for Twitter to make money was to "just slap some
ads on it", they had to have asymmetric read and write privileges.

That means they have to try and replicate the same kind of evolutionary
product but with a limited number of internal and very expensive designers and
developers. And again they're not incentivized to provide value for their
users. They're incentivized to extract value.

Neither Facebook nor Twitter make content. They just provide the service of
storing and organizing an ungodly amount of information. This is definitely a
very valuable service. The problem is that it is a service much like how
electricity is a service. It makes about as much sense to give out free energy
and then "just slap some ads on it" as it does for these companies to give out
free communication channels and then fill them with noise.

The store that sells spark plugs has customers. The spark plug manufacturer
has customers. Their suppliers have customers. They know who wants what, how
much they're willing to pay, and how to advertise to them.

Facebook and Twitter have users. The only customers in the equation are the
advertisers. They have no idea how much their users are willing to pay and
they have no idea how much their users are worth. They price ads based on what
must amount to voodoo projections of their operation costs and a blind
balancing act of signal-to-noise.

~~~
shostack
>"Facebook and Twitter have users. The only customers in the equation are the
advertisers. They have no idea how much their users are willing to pay and
they have no idea how much their users are worth. They price ads based on what
must amount to voodoo projections of their operation costs and a blind
balancing act of signal-to-noise."

Are you referring to advertisers or the social networks with your comment
about "voodoo projections"? For many advertisers, yes, it is very hard to pin
down a proper value for acquisition through any digital channel except in
certain direct response cases. With advanced attribution technology though, it
is increasingly possible to dial in the proper mix of channels needed to
maximize certain targets (conversion volume, revenue, efficiency, profit,
etc.).

~~~
williamcotton
I was referring to the social networks.

The fact that marketers also struggle to pin down a value means that there is
literally no price discovery mechanism for these social media products. What a
nightmare...

------
rebootthesystem
We stopped advertising on Facebook. The whole thing is a big scam. Not only do
I have to pay to get people to my pages, I have to pay again and again and
again every time I need to reach those who liked my pages. I have no way to
reach all of my page members without paying FB dearly for every single post.
Then there's the issue of FB ratcheting up your cost for those who actually
respond to your message. And, of course, then there's the lovely
fake/unresponsive likes problem. Nah, it's a big mess. Don't need them. I'll
wait until they hire some grown-ups who can relate to real people and
understand how honest and serious people do business in the real world.

~~~
mirko90
Thats because the like button is not the same as permission to spam.

I see tons of websites hiding content before you "Like" the page or nagging
users to "Like" the brand, even the big ones.

People hated Facebook previous year because there was tons "spam". Basically
every shitty page owner or marketer was thinking this is great, i can send my
marketing or "spam" message to everyone dump enough to "Like" for no cost.

Also i don't know why people thing that facebook is worse then google adwords.
In adwords you pay for every click, and lets say it converts. The next time
that same user searches for something on google you will again pay for that
click, And if you want to re market to that same user, you can do that but you
have to pay. At least with facebook you get some of that reach for free after
people liked you page.

Im not going into is it worth the money people pay, and facebook sure is
pleased that people keep poring money into its platform thinking it is
something its not.

~~~
rebootthesystem
I think you are wrong on many points.

First, if someone likes a page and later does not like the content they can
unlike it. They are not hostages of bad pages.

When a page owner publishes a post FB uses a very limited distribution (2% or
less) to pretty much force page owners to pay to boost the post. So, you
already spent thousands to get people to your page and now you have to pay
again to communicate with them. Sorry for saying it this way: That is
bullshit.

With AdWords the model is simple: Drive traffic to your site, get
registrations and then communicate with your audience on your own terms. That
is precisely what the article says brands are doing once they understand
facebook's problems.

Sure, you could use the same model with FB. Within limits. They are very aware
of the exodus they face and seem to be making moves towards limiting your
ability to take the same kind of approach you might with AdWords.

My position is simple: People who sign-up to my page/group are MY audience. I
ought to be able to communicate with 100% of my page/group members at no
additional cost.

Give users their own moderation tools. Let them decide, not FB. They already
have the ability to unlike. That's easy. Next would be a throttling control.
Let them choose what percentage of posts they want to see and maybe even set a
schedule. So, on Mondays I want 2% of my page/group content to come from the
Tesla page; on Tuesday's I want 10% from the Richard Dawkins page and 10% from
the America's Cup page, etc.

In other words, no rulings from an immature totalitarian regime. Mimic the
freedom of choice that exists on the net. If someone is hell-bent for the
Underwater Pumpkin Carving page and don't want to miss a single post it ought
to be THEIR CHOICE, not Facebook's.

Note that, as an advertiser, I am not advocating shoving my page's content to
all my members. I want to deliver value and have THEM decide if what I am
saying is worth their while.

------
PublicEnemy111
Facebook blew away earnings this summer citing "mobile ads" as the reason for
growth. Instagram had its first ad ever a few weeks prior to the earnings
release, which had hundreds of thousands of comments. I can't help but feel
Facebook was being misleading when they cited "mobile ads" for the revenue
spike. Merchants had renewed faith in the platform thus resulting in a
positive feedback cycle(merchants come back/signup -> more revenue -> revenue
jumps again -> repeat). I think a break down of their mobile ad revenue would
tell a much different story than the one they were trying to promote

~~~
jhulla
How much of mobile ad revenue is VC money recycled by startups through
facebook seeking installs of their apps? Is there a breakdown of this
somewhere?

~~~
unclebucknasty
Interesting question. Makes me wonder about the breakdown of those
astronomical numbers in general. Is it longer tail, with tons of smaller buys,
or fewer large companies with massive buys that are generating the bulk of it?

~~~
blumkvist
It's always 80/20.

------
devindotcom
Sure. If you think you're reaching half a billion people, you're deceiving
yourself (and/or falling for Facebook's deceptions, which, as an advertiser,
you ought to know better than to have done) — it's a great place to put your
information publicly and communicate with interested people instantly and
directly. Wonderful tool for that purpose and used well by savvy brands that
way today. But for actual advertising? Good god! A hole for money.

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websitescenes
Our company successfully manages multiple Facebook and Twitter campaigns. Not
only do we post on social media, but we also pull that content into website
feeds with api's. This ensures visitors to the site see the latest social
media posts. This, in conjunction with paid and targeted ads, produces a high
level of customer interaction.

Just posting on Facebook/Twitter without purchasing ads and leveraging the
content off/network won't produce favorable results.

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romain_dardour
Interested to hear the Hacker community's take on this.

We've been forecasting this for 2 years and agree with Nate Elliott : "As a
result, marketers hoping to interact with consumers online might be better off
investing in social features that exist on their own websites, or in smaller,
more niche social networks, Mr. Elliott said."

That's why we built Hull in the first place.

Now this subject is this 15min's subject. What does the Hacker community think
of this specific idea?

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billwilliams
For the record, when people talk about "Brands" on Facebook, we're not talking
about janky startups. We're talking about big old companies that blow >10
Million dollars in ad buys.

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forrestthewoods
Every mobile game dev that I know claims Facebook ads are, by far, the best
for acquiring users. <shrug> Take that data point as you will.

~~~
Romdeau
This is more specifically talking about maintaining your facebook company page
and trying to engage with your userbase/followers.

After Facebook introduced the promoted posts concept if you were a brand you
saw your engagement rapidly die off unless you were spending the money on it.

Purchased adds still work well if not better when targeted properly.

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anon4
By twitter, do they mean promoted comments? Because each time I see a promoted
comment on my twitter, I block the sender and report it as spam.

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elvis635
Do you know if there is a way to access that report? I'd be interested to read
it, but $500 is way out of my personal budget

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icedchai
well, they're also wasting money on Forrester...

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_almosnow
I found out this very early, a few years ago when their ad platform was barely
launching for everyone. I had a digital magazine and overall it seemed like a
good deal, send me people interested in music from these countries at very low
CPCs, nice. In total, I may have spent around $1200 USD over a month for a
little more than 100 subscribers; needless to say I felt scammed. When trying
to figure out what happened (w/ Google Analytics, my own event tracking code
and even a few apache logs) I found out very interesting stuff, like that 99%
of those clicks were people who didn't stay for more than a second on my
webpage, like in: they didn't even wait for the page to load completely...
weird.

Just for the record, my ads were not clickbaity and were targeted fine, and my
magazine didn't suck (IMO at least heh), so if someone clicked on my ad I
would pretty much expect it to stay in the page and have at least a look at
the cover of the current issue.

Why did I burn $1200 if the ads weren't working from the start? I wish I had
figured that out earlier and spend that money on a fancy chair or whatever
instead... The thing is that I was only looking at my daily visitors and
believed that everything was fine, it was until the end of the month (where I
always made some kind of audit thing to see if I was growing or not) where I
noticed that the number of new subscribers had remained the same even though
FB ads were active all time.

Since then, the only advice I give to friends and clients is "stay away from
Facebook ads, it's not what you think they are". And on a small side note, I
tried a lot of advertisers at that time and the best experience I had was with
StumbleUpon, their referrals converted to subscribers at an incredible ratio
(like >50%!!!) and on top of that they drove some extra organic growth even a
few months after then campaign was finished, respect for them.

~~~
archemike_
I've been acquiring SaaS users for <$10 for awhile now at around 50 cents a
click. I find the ads extremely effective if you know what you're doing and
target the right demographics. That being said, the conversion thing makes
total sense. There's lots of little tricks that have worked like make a
campaign with over $100/day on ads and you get prioritized over the little
fish and then lower it right away so you're still prioritized in their display
algo but you aren't spending at that amount. If your adspend really is 100
start it higher like 1000. Lots of little tricks you can do that will tweak
the system to your advantages. but buy paying for likes or showing ads to
people who like candy crush or "insert corporate page" you'll probably burn at
over a dollar a click to your site and most of those will bounce hence leaving
an ineffective campaign.

The thing is though even if it's slightly working it's probably cheaper then
AdWords, so for larger budgets/non personal it's a great way to get the same
amount and comparably the same targeted traffic for less capital.

Also if the ads are so horrendous please explain the numerous ad hackers that
have done TeeSpring campaigns making 100k by targeting niche at scale. Sorry
just some musings on facebook ads from someone who's seen people do it wrong,
and has made money on the network for myself and clients.

It's pragmatic, with the right intent, niche, offer, and funnel. Custom
audiences greatly increase your chances as well, and massive retargeting with
"users that aren't truly retargeted but you have their data" Probably not by
throwing generic money at it and expecting magical high value users/sales.

P.S. Agreed! re: StumbleUpon is SO HOT for their ads. I wish their were more
native advertising networks. StumbleUpon and Facebook are hot. Twitter seems
to only work for certain niches with custom cards for optins but even then it
seems it's over a dollar per click and generic web traffic or the plethora.
StumbleUpon CPM seems to be some of the best ratios out there, and clicks are
really cheap sub $1.

~~~
jonbishop
"Lots of little tricks you can do that will tweak the system to your
advantages."

Can you suggest any resources for these tricks?

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Eye_of_Mordor
Don't think Facebook offers relationships at all - just an endless stream of
adverts and selfies. Like watching TV with all the programmes removed.

Anyway, it's all going to be totally different with smartwatches...

