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Facebook Clicks Fade as CPC Rises



1,500 Advertising Campaigns

11,200 Individual Ads

2.2 Million Clicks

0 Happy Marketers

“Facebook Advertising Performance Benchmarks & Insights” is the latest whitepaper from Webtrends and it brings some sobering news. In short, Facebook ads aren’t turning out to be the gift to marketing we’d hoped and maybe Eric Schmidt was right, Google has nothing to worry about.

The most telling piece of information is contained in this chart. Basically, it shows that clicks have declined and prices have risen.

A big part of the problem is ad burnout. Because Facebook serves ads based on interest, the same ad is served to the same person multiple times over a few days. The study saw that people began to ignore the ad after only a few viewings. They counter this with Google search ads which only appear when someone is searching for that information, thus reducing the number of times the ad is seen, and thus, ad burnout.

Facebook’s one saving grace is the addition of the friended ad. Ads that have been “liked” by a friend received more clicks and they lasted three times longer before burning out. The problem with this is obvious, as a marketer, you have no control over who “likes” your ad. The best you can do is present a product or ad that is engaging enough to grab the audience — but isn’t that always the goal?

What categories of ads perform best on Facebook? Webtrends has a chart for that and it shows that media, entertainment, tabloids and blogs get the most bang for their buck. Travel and cars also fared well. On the downside, healthcare, financial services and oddly internet and software suppliers would have been better off taking their business elsewhere.

The takeaway from all of this is that Facebook isn’t the miracle marketing vehicle many were hoping for. For those in the entertainment arena, who have compelling ads that people like, it could be more profitable than the same dollars spent on Google.

It seems to me that comparing Facebook to Google ads is something we shouldn’t even be doing. Facebook is a completely different animal, so shouldn’t they have a completely different way of handling advertising? By allowing folks to “like” an ad, they’re on their way to putting the social in social marketing but they still have a ways to go. The future has to hold something more than alphabet soup (CPM, CPC, CPA, CTR, ABC and OMG).

What do you think?

  • http://www.lourceyphoto.com Larry Lourcey

    I’ve never had a whole lot of success with FB advertising – in fact, I’ve had friends outside of my target demographic see my ads come up on their FB pages.

    Anyone here have a history of success with FB advertising?

    Larry
    plano portrait photographer
    Twitter: @larryphoto

    • http://www.facebook.com/pages/The-Griswold-Inn/117806418240407?v=photos&ref=ts Geoffrey Paul

      I am the co-owner of a historic America Inn in Connecticut called the Griswold Inn. I have had the opposite experience….we ran our first Facebook ads in Dec and immediately went from 1500 fans to more than 6500!! Furthermore, more than 20,000 people checked out our website. What you fail to factor in is that once these folks are our ‘fans’ we communicate with them for free!! And they have proactively decided they WANT our communication. This has immediately resulted in increased room revenue and will, I am sure, result in more revenue over the course of the year. This blows Goole away in my opinion.

      • Cynthia Boris

        Good to know it’s working for you. But from the sound of it, your success isn’t typical. I do agree about the captive audience factor. That really is the saving grace of Facebook advertising. I didn’t address it because there was nothing in the study about factoring that in, but it’s a valid point.

  • http://www.dailymauiphoto.com Kris

    I had some initial success with my Maui fan page last year, but I have seen things drop off as of late.

    Early on, I noticed that I was still scoring clicks with super low bids while the suggested bid was relatively high.

    I’ve also started playing with the demographic targets more, too. I notice that if I include the Philippines as a target country (they like Maui, too, you know) I hit my daily budget without a problem. If I drop just that one country out of my list of Pac Rim targets, FB doesn’t take my money.

    Who knows what the rhyme or reason is behind it, but it is curious.

  • http://www.orbitalalliance.com Simon Yohe

    I’ve run a geo-targeted campaign that was tied into a Wildfire App Sweeps promotion and the banner ads for sweeps really helped it be a success…We were running a CPC campaign, so although our CTR was low, it didn’t effect our overall costs/budget.

    • http://www.wildfireapp.com Maya

      Hey Simon! So glad to hear that ads for your sweepstakes went so well! Have you already seen some of the great tips we post about effective Facebook ads, especially as they relate to promotions? You should check them out on our blog, I think you will like them! blog.wildfireapp.com

  • rmw26

    Somehow I feel this article is more of a testimonial

    I felt that if you actually had loyalty, hope, unbias opinion, anything for Facebook you might’ve angled this article like “Hey Facebook, use those big bucks you just scored to fix THIS” (their ads)

    Or you didn’t know they just got huge investment money?

    Or I am totally unaware that they spent it already?