Adwords grew explosively, but relative to the expectations of Facebook, Google looks patient. Adwords didn't start off with ten million customers with endless budgets. They started off letting people buy $20 worth of ads at 5¢-50¢ per click. Some people figured out ways of selling ebooks or whatnot at a profit and figured out things like split testing, conversion tracking and such. They were then qualified to be consultants and go door to door to electricians or removalists who got a good ROI and eventually allowed the consultants to spend an extra $350 per month. Then they hired an in house 'PPC Specialist' who spend their week figuring out new ways to profitably send Google more money. A lot of the campaigns set up 5 years ago are still active. I worked as a consultant back in 2007 and most of the campaigns I set up are still running.
It took some time to figure out that Adwords works for dentists but not for burgers or detergents. That wasn't immediately obvious. Burgers and detergents were the big spenders of the advertising world and a platform that didn't work for them was a toy.
There were a lot of ultimately stupid campaigns started. Half the initial customers tried to get a better CPM (cost per 1000 impressions) by optimizing for a low click through rate, benefiting no one. Google killed this off by creating adrank. The other stupid advertisers were eventually outcompeted by those who could turn their click into revenue more efficiently.
My point here is that Google put a tool out there. It took time before users (advertisers) were good enough at using it to put pressure on the bids and bring up prices. Someone figured out how to sell car insurance. Comparison sites were created. They signed deals with insurance companies. Ecosystems developed.
Facebook ads aren't useless. They just work for some stuff. The advertisers just need time to figure out what works. If you are having a town fete and want parents with small children to know you have a petting zoo, Facebook ads will get you customers physically driving to you for cents. Incredible value.
Facebook is just impatient. They keep moving the posts in an attempt to find a formula rather than making good tools, leaving them out there and letting advertisers find the formulas.
First, you could easily get likes and share with them.
Then, you had to essentially buy likes to speak to everyone.
Now, you have to buy likes and then buy the right to speak to everyone.
It's not right, and it's a horrible experience, both as a user and an advertiser. When I like a page, it means I want to see everything they send me unless I click to hide it or content like it.
As an advertiser, the double taxation is brutally distasteful. Stock might be up, but I'm with the OP.
But I agree with you. They encouraged advertisers to get likes by advertising and let them believe that is valuable. Then they devalued the likes (this happened almost naturally, people like too many things). So, they did screw their customers around.
I disagree. They have been rapidly improving their tools (which in the past were absolutely useless). The improvements are the main thing driving the change, and they are using what they hear from advertisers to inform their changes. The difference between Facebook and Google is that the intent piece of Google made building an ads product that is essentially native and noninvasive to the users much simpler than Facebook. The WSJ piece from recently spelled it out, but the leadership of Facebook only recently started thinking about putting its best people on the ads product.
It's only a matter of time before they realize they can't beat google and the sad reality hits, they can't monetize. There's no way to monetize hundred millions of people around the world who don't have wallet or credit card. Likes is a good example of this. Even if people who use facebook have a credit card they are probably not in the buying mood. Friend tells me a product is good, one still uses Google to verify, unless he's a real bro and I trust his tastes. Likes is a good example of people 'paying' their useless attention which has no price. It's free anyone can give out 'likes' as many or as senselessly as they want. Instead of credit card, you get people's clicking action that supposedly builds you street cred but like this article highlights, it's mostly comprised of no significant value to the advertiser.
Second, a big part of being native is letting the right advertisers find you. This is what I mean about being patient. It may be hard to picture now, 10 years later but Google initially had the same problem. The real advertising budgets were looking to replace/augment their TV & poster campaigns. Advertisers were FMCGs (detergents, coca cola), cars, movies, etc. Local pilates instructors & 2 man shop insurance resellers didn't have advertising budgets. No one was searching for "what is the most refreshing drink?" so any ad for coca cola would be "non-ative" (BTW I really like this description here - thanks the_watcher).
BTW, buying is not a huge part of adwords. In fact, it's pretty hard to get a positive ROI on a "product" purchase campaign.
To give you an example, if you want to run a one off event that's good for parents with kids, Facebook is awesome. It would probably also work well for showing film trailers, showing stand up or theatre "trailers." etc.
If I understand you correctly you are talking about how adwords link to marketing landing pages that _give away_ something valuable to the user like an ebook in exchange for your email address. In this way they convert you by slowly giving away more value, building trust, and upselling premium offerings, etc.
People don't drive on the freeway to see billboards.
This argument that advertising must be like google "advertise people looking for things" is not the value Facebook is offering advertisers. It's offering something significantly different and in many ways bigger. "Advertise people when not looking for things"
The laundry detergent on TV is the famous laundry detergent, just like the actor on TV is the famous one. Branding is really trying to turn the thing you're selling into a cultural icon.
People don't goto football games to watch the Goodyear blimp.
People never ask to be advertised to but..,
Where people go in mass, advertisers want to reach them.
There is no place people go consistently more than Facebook and they have the best mechanism for targeting so many niche sets of users.
And to argue facebook isn't culturally relevant vs TV. I'm a little bit lost with that one. Memes and videos everyone must watch are a cultural phenomenon heavily driven by Facebook.
The fact that Facebook advertising targets you so well (or not) is something that is a common conversation just like talking about the annoying (or not) commercials that exist on TV.
The Super Bowl is a notable exception.
I think that is debatable. Sure, BMW could target young Asian kids with rich parents on facebook, but there's already a rather big demographic targetting with the likes of Youtube and Google's data on a user. Google's reach of your demographic and browsing history paints a far more clearer picture for a potential advertiser, as you are more likely to notice an ad campaign when it's displayed before a youtube video or a blog you read. Facebook would be great for someone showing off their purchase not necessarily for buying products through poorly placed ads that your brain is trained to ignore.
The Facebook data is worth a lot, though. Google knows what you're looking for, and Facebook knows what you're already into. For best results, an advertising network would have both pieces of data.
I can't rationalize playing FB's game anymore. With the recent decrease in page reach, you're basically paying double time for FB. Once to "get" the fans and then again to "reach" them.
Sure, we saw an increase in site activity, but it was debatable whether or not that actually increased revenue. I'd rather put my money towards users who are searching for our products explicitly or building up our own email list that we can "reach" anytime we want.
The best results we got for FB were through adroll or perfect audience that were utilizing facebook retargeting.
If your page views went up but your conversion rate dropped by the same amount, that would be worthless traffic.
This is an honest question as why should we believe anything you say if you're not even doing the basic maths? Did you measure anything?
I would assume these individuals know very little about advertising. This is unfortunate because it masks valid criticism about Facebook's platform.
The Facebook "game" is to purchase likes, and then use that as a base to target advertising. At minimum it acts as a filter so that your advertising is reaching people who are active Facebook users (they click like), if done correctly they are both active and have some passion for the topic they are "liking."
One of my friends is a consultant who has done extensive work with Facebook advertising and has to clean up accounts that are basically fucked because a previous employee/vendor/consultant purchased a bunch of un-targeted foreign likes. Once those off topic likes are purchased (someone in Pakistan "liking" Las Vegas) the subsequent ad campaign is ruined.
If you bother to measure your ROI you can make a logical choice as to whether Facebook makes any sense at all to advertise on. Perhaps the ROI is negative, but close to breaking even. You can then take a very tactical approach not just your Facebook campaign, but your site or app, to tailor to those Facebook visits, and get a positive ROI.
Some markets are so competitive, or peculiar, you just will not get a positive ROI. That is not a Facebook unique issue. It applies to all channels.
The discussion so far is one of, this makes me angry, and this doesn't make sense, completely devoid of a analytical approach to the issue. Whether or not I want to personally use Facebook is another matter.
It was debatable whether or not it increased revenue enough to justify the costs (both time & monetary) involved. What it came down to was that it wasn't profitable enough to justify the opportunity costs of executing FB instead of other avenues.
I now just challenge anything without numbers, it's frustrating to read wooly posts about SEO or online advertising that aren't explicit. You always wonder if they actually know what they're talking about or just one of those useless 'theory' guys.
If you don't pay for it, posts have to be "engaging," which is why link bait titles from BuzzFeed and Business insider always make it onto my news feed, but not posts from cool projects that I care about.
You can help Facebook serve your feed better by marking posts as irrelevant, uninteresting, as spam, hiding stories from certain people/sources, etc., as well as trying to interact more often with those posts you find interesting (also, share them more). One of Facebook's core competencies is aggregation and analysis of the massive volumes of highly specific data they generate. Improve your inputs and their outputs will improve as well.
Then again, Facebook ads give advertisers much less of an "in your face, brainwashing you against your will" impact than TV commercials do.
This might just be a case of a revenue model that simply doesn't fit the platform. It may be that Facebook is going to have to figure out another way to justify its high P/E ratio.
>> Yet, over time, get exposed to enough of those ads, and when it's time to buy, your hand instinctively goes for the one your brain is bombarded with ads for all day.
I don't really think that has anything to do with it. At work we having both Coke and Pepsi vending machines. Most people prefer the taste of one or the other, to the point where if a place only serves Coke and they prefer Pepsi, they won't order it. Not unlike beer in America (Bud Light vs Miller Lite, etc)
Soft drink choices come down to availability most of the time. Chances are if you are at an event such as a sports game or concert, they've already made the choice for you. Same goes for a restaurant, McDonald's has Coke and Taco Bell has Pepsi.
Coca Coca spends about $3 billion a year on advertising.  I couldn't find a breakdown for how much is brand-building versus other goals, but I think we can agree it's a lot.
That suggests two hypotheses: A) People in charge of a $3 billion budget for an incredibly profitable and long-lived company know what they're doing, or B) An anonymous non-expert on the Internet has correctly realized that advertisers are just fooling themselves, and he (and everybody else) is above being manipulated by brand advertising.
No offense, but I'm going with A.
On a personal note, I grew up drinking Coke (because my dad preferred it), and I generally prefer the taste of Coke most likely because it's what I grew up drinking. I've seen Coke ads, and I've seen Pepsi ads, and neither one makes me want to drink one or the other or go buy one or the other. About the only thing it might do is influence me to go get a Coke if I was already feeling a bit thirsty although even if it was a Pepsi ad it would probably still make me want to get a Coke. In this case it would be a win for Soda vs. some other kind of drink like say a Starbucks coffee, not specifically Coke vs. Pepsi.
See the first reply to the first post:
> Holy fuck. You're right. I bought a car recently, and while the TV spots had nothing to do with my decision, now when I see them, I sing along with the song and cheer at the TV and shit.
It turns people who bought your product in to people who are fans of your product, which makes them more likely to become repeat purchasers (and less likely to seriously consider other brands when it's time to purchase).
This is the famous Budweiser beer. We know of no brand produced by any other brewer which costs so much to brew and age. Our exclusive Beechwood Aging produces a taste, a smoothness, and a drinkability you will find in no other beer at any price. Brewed by our original all natural process using the choicest Hops, Rice and Best Barley Malt.
Read it carefully. The beer achieves the self-described rating of... drinkable. That's not very high marks!
But I'm just one of those beer snobs who really likes drinking a good brew, not one that talks about "camel overtones" or other stuff or whatever that means. Reading beer reviews makes me angry.
Please don't insult American beer by reducing it down to the very bottom of the barrel.
And the venue / restaurant is going to choose what they think people like, so smart brands would still advertise to the end consumer.
What does happen is the cumulative effect of those ads put your brand (coke) top of mind. Later when somebody is searching for "snacks" on google and paid search ad comes up, that person is more likely to chose Coke than RC Cola.
You need to look at effect your "brand" advertising is having on your paid search conversion rates. The industry is trying to solve this with "attribution" schemes ie figure out which ads every converted person has seen. (shameless-plug) But my company, Optimine has a much cooler and simpler approach using incremental modeling.
Here is a white paper that I think does a decent job of explaining.
Disclaimer: I'm 31, block all ads online, and don't own a TV. I haven't seen a TV commercial in years.
You are influenced by your friends and culture. Brands try to penetrate both. You have just offloaded some of your choice/reference to friends and internet when your ready to look. They they get you.
Not so much. I have few friends, and their opinions don't influence my buying decisions. I could care less about brands. Show me the money (cheapest option of greatest quality, based on independent research usually wins).
I understand I'm an outlier. I'm just looking at it as an older millennial who doesn't use the radio or TV (paid pandora, video is all consumed online through mediums with no ads) and who is phasing out the use of Facebook (and rarely, if ever, logs into Twitter).
Which isn't to say that you're not the exception, just that generally speaking everybody thinks they're the exception. So how you think you buy things doesn't mean much; you'd have to have someone outside your own head look at your purchasing patterns to know for sure.
So, I went ahead and created a page, whereupon FB immediately began pushing me to buy likes (as I call it) or promote my page (as they call it). It felt extraordinarily scammy, especially given that I would then have to pay even more to reach those same people later.
But, I pushed through and tried it. The results were abysmal. Less than 100 likes, very little engagement, and a couple of conversions. Probably cost me about $1K.
Now, it can be argued that it was our message, service, etc. But, this story repeats itself all too often. I think the value of an FB like is highly overrated, even for "validation" purposes. People are increasingly turning a deaf ear to what their friends like and/or what shows up in their feeds. In fact, the very proliferation of like activity that FB and other companies push has diminished the value of likes over time until they are now completely meaningless or nearly so.
It should probably read, "We stopped advertising for likes on Facebook". To which we'd probably just nod or shrug.
Not to mention that Facebook has drastically throttled updates pushed from pages to a users timeline, making the whole concept pretty useless unless you pay them (I know, I know, capitalism at its finest).
About a year or two ago, each update that came from our page (auto update from an rss feed) would be seen by 100 - 300 people, now we're lucky if 30 people see an update, usually its more like 7 - 15.
Whats the point?
Facebook has released a wealth of tools via their advertising platform in the last 12 months that make serving ads to the users you want to reach a much easier prospect. You don't need a super-large 2 million user base Page in order to get the word about your product out. Granted, you do have to pay for distribution now, instead of a few years ago when it was free, but the tools that are available (ad units, targeting, etc) are vastly better than what was available 2-3 years ago.
So, the article is correct in it's denouncing the value of a "like" on FB, but that value was always due to drop. Having more fans early on in the days of Pages was the main indicator of the success that a brand was having on FB. Those days are long gone, and [FB] marketers have to be more intelligent and deliberate about their strategies, and they have to be willing to put their money where their mouth is.
Doing internal FB advertising only really makes sense if you have a strong FB presence (i.e. Facebook game or if you push lots of sharable content via your FB page).
NOTE: If you have less than 1000 likes, you should pay for likes until you get up to that number, as it unlocks some advertiser features.
Facebook Ads are amazing. Nothing else has come close for us both for direct conversion and likes. Likes are far cheaper to acquire and can be extremely performant if used in the right ways.
Facebook has a huge learning curve though. As with all things, if your FB page doesn't have "page/audience fit" before the ad campaign, it won't after the ad campaign either.
In the last 3-6 months many of the Co's I've been working with
have greatly expanded their FB advertising with CPA's on par or better than Adwords Search. It's very important to separate branded and non branded search terms on Adwords when evaluating a campaign. Non branded is what matters for evaluating effectivess of Search campaigns.
FB has a huge advantage in demographic targeting. There are only so many relevant queries on Adwords and once you have covered your bases with relevant KW's, its hard to profitably scale past that stage. You can endlessly optimize but the gains are incremental.
I agree that buying likes on FB is not great, the exception is if your super targeted by demo and location, and then do friends of friends lead campaigns on top of the newly acquired likes, that can work, but it takes patience and a bit of budget.
FB's rising stock price is a direct result of their expanding share of advertising budgets.
I would use it as a sales funnel, but anything beyond that would belong into "Brand Recognition" which is really impossible to measure anyway and only the biggest brands who target general population should do it.
CPL via FB is about $1 (we're in India) and the CPL via Adwords is about 80 cents. Conversions: FB is basically garbage, less than .5%, while Adwords does way better and gives a positive ROI.
I have used Adwords retargeting but not FB retargeting, has it been beneficial to anyone?
Facebook encourages programs like this because they make money off of them. But they're a sucker's game; internet marketing is still internet marketing and people who are good at it know how to assess the value of an online marketing campaign with cold numerical efficiency.
Google's advertising system is still far superior to Facebook's because it's built in such a way that Google makes more money when their advertisers make more money. Facebook still has yet to find a way to show real ROI in the way that Google does. I think they will eventually, but right now their mantra is that social marketing is different than online marketing.
A bit unrelated but if Facebook wants to make truckloads of money... I am still trying to figure out what the holdup is for an Adsense competitor -- I'd definitely try it on some of my content sites.
Most people browse the web logged into FB, so it doesn't seem THAT problematic from a technical standpoint. It also wouldn't be that out of place for me to start expecting ads based off of profile data.
Could you imagine how targeted the offsite ads could be? The marketer in me is already salivating over the concept.
I feel like I'm missing something incredibly obvious here.
The problem here is that promoted posts from your page isn't the best way to use Facebook. Use it occasionally, but Facebook is much more similar to TV or print advertising than search ads. Think about it: Google, you use keywords to judge intent. Facebook, you use demographic information to introduce yourself to those in the demographic you thrive in.
This is maybe the third or fourth post I've read along the same lines: a lot of people aren't seeing ROI and engagement. FB isn't right for everyone, but there ARE people making money on it. Aside from having the right product and service offerings that do work on FB, you need to make sure you have the right campaign with clear goals and smart targeting. Without auditing their targeting options I can't say whether they got any of this right, but their Facebook content and profile aren't really set up for a liking campaign's ROI either.
As for Facebook for advertising your products i.e links to your product pages or website, the ROI is worse. But I keep using it however, because in my market, using Adwords is no more affordable, I roughly pay $0.03 for a Facebook ad click, while the same costs me $0.25 on adwords. That's why I had to give up on Adwords.
I myself have discovered many pages, articles and even bought products online based on what Facebook suggests I should like. Like the shoes I'm wearing now. It really does work even though there isn't an easy way to track it. Don't underestimate what a Like can do.
So the decision of whether to purchase "Likes" on Facebook is now much more of a no-brainer. You're not going to see the same ROI on ad spend as you once did (and even then, the ROI was tentative at best).
FB, for some industries, has great targeting. Tech business, probably not so much.
PS they target demographics, not getting likes
Yes, if your only objective is to get Facebook likes don't do that.
And by the way they don't seem to get Facebook. Or Social Media Advertising.
But I hand to them that 'like' has become a random thing.
However this is not about "getting" (and bragging) this is about "not getting"
But you're right, if the person is bragging this is usually a red flag.
It's like someone bragging about "How they know how to write stories with Word" or how they can totally "Do calculation with Excel"
The targeted users become victim, though.
Using Facebook's own PPC channels we are getting fraudulent clicks and fake profiles come via Facebook as a legitimate cost.
'Fraudulent' being the most important word.
Unless the customer was duped into spending (free trials)