Mike Hanbery March 5, 2014

Facebook Advertising: More Necessary than Ever

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Last month, Internet science celebrity savant Derek Muller brilliantly uncovered a controversy surrounding Facebook advertising.

Two weeks ago, I attended a conference at which keynote speaker David Sable, Global Chief Executive Officer for advertising agency Young & Rubicam, called Facebook likes, “The worst thing to ever happen to the world.”

Sable lamented the metric. He’s right, of course. Every old school CMO is tasking some poor sap on his staff with inventing or discovering a formula to answer, “What’s the value of a Facebook ‘like’?”

What is a Facebook ‘like’ worth?

Here’s why the question sucks: The “like” in and of itself is worth nothing. I recently spoke with dozens of independent flooring contractors and other construction-oriented businesses. They raved about the quality of leads they get from Angie’s List. To consume content or research companies on Angie’s List, a person must pay American dollars to the directory and take time to interact within it. These people are vested in using this network. They are, as we all enjoy saying, “in.” Contrast that to a Facebook “like.” It’s a click. It takes less than a second and is forgotten as soon as it’s done. What could possibly be more transactional? In and of itself, an individual Facebook ‘like’ is worth nothing or worse. Much like the email addresses you collect for your opt-in burst email, the worth of a like depends on what you can and will do with it and its owner’s ability to purchase.

But likes are an easy metric to understand, so that’s where the market has gone. While it is woefully incomplete, it has relevancy. As Muller notes, Facebook likes connote perceived popularity. Facebook likes also serve as the denominator in Facebook algorithm calculations that purportedly influence how much organic visibility any Facebook post gets.

The numerators in those equations have to do with engagement. Facebook assumes quality content generates comments and shares. Facebook has an interest in proliferating quality content. A large number of likes with little engagement, therefore, is detrimental to the content producer. And that’s what happened to Muller. He put money behind his content, set a goal for page post engagement and ended up with a bunch of likes from fake profiles from which his page would never gain an iota of engagement.

Facebook Advertising by the Numbers

We have experienced this, too. In fact, it’s only one of the negative anomalies we’ve found with Facebook advertising. Here’s another:

Facebook advertising metrics consistently boast high click rates at prices per click that are nil compared to, say, Google AdWords. However, analytics on the conversion end never match up with Facebook’s data. For example, when a Facebook advertising campaign drives clicks to a landing page on a website on which Google Analytics are used, the inbound traffic from Facebook calculated by Google Analytics will invariably be significantly lower than the number of clicks Facebook reports. Okay, each analytics program has its own measurement nuances, but even if we look past the statistically significant discrepancy (We shouldn’t.) and drill down into Facebook’s own numbers, we find Facebook’s own math doesn’t come together. Facebook advertising metrics are useful for A/B testing for offers, images and messaging but results from such campaigns should only be tallied from the conversion end.

Muller’s campaign and the campaign I mention above had different goals. His goal was to drive engagement within the Internet social network. We do that, too, but in this example we ran display ads on the Internet social network with the goal of driving interested prospects into the purchase path, i.e. the client’s website.

That said, even though our campaign was not designed to drive traffic to our client’s Facebook page, we experienced similar results. We tested running ads through the Facebook advertising platform and through boosted posts. The latter generated hundreds of likes from fake profiles.

Here’s what the two campaigns had in common: Geographic targeting. Specifically, our client targeted entire countries, including India. There are sound business reasons for doing so. Now, there are sound business reasons for excluding India and other places in the world from Facebook advertising.

Why fake profiles? Because fools purchase them to make themselves look more popular than they are. Remember in high school when kids invented girlfriends or boyfriends who lived far away or who were never seen and they turned out to be phantoms? Buying likes is the equivalent of that. (And hopefully, those folks got counseling before marrying.) This practice has been around for as long as Facebook and Twitter have been making their way into the mainstream. Yes, you can also buy Twitter followers. If you’re under 21, you can also get a fake ID and get into disreputable drinking establishments. Both are bad ideas.

We’ve run far more campaigns with varying goals that did not produce likes from fake profiles. What do they have in common? Limited geographic targeting. Our consistent experience running Facebook ad campaigns targeting metropolitan areas or even a long list of zip codes throughout a wide swath of US states experience this at a marginal, fractional level, or not at all.

Why Advertising on Facebook is a Must

In any medium, marketers must always strategize and strive to increase reach and visibility. In social media, this means getting content seen. Anymore, on Facebook, this means advertising is as necessary a component as the use of offline, non-opt-in channels and incentives.

Acquisition Marketing: The vast majority of any Internet community—an estimated 90 to 99 percent—will consume content but not engage with it. Depending on the ten percent or, arguably, one percent of your audience to make your content “go viral” is a low-reward strategy for most businesses.

Retention Marketing: In the fourth quarter of 2013, Facebook metrics wonks documented a 40 percent decrease in Facebook page post proliferation to people who already like those pages. The estimates vary from 7.5 percent of current likes seeing page post content through organic means to 17 percent. That’s a lot left on the table for any business.

For both purposes, to use social media to attract new followers and to maintain relationships and generate referrals through existing contacts, advertising presents the most cost-effective means to do so within Internet social networks.

How to use this Information:

It’s important to crack this nut because right now and going forward, advertising on social networks is a necessity. Companies operating within the medium and without the established brand power of a Victoria’s Secret, Starbucks, McDonald’s, Coca-Cola…you get the idea…are generating content being seen by an extremely low percentage of the audience they have already acquired and by no one outside their existing sales funnel.

The opportunity and necessity of including advertising spend in social media marketing strategy is not limited to Facebook. Twitter now provides affordable Sponsored Tweets and Sponsored Accounts, which are more efficient at growing reach on that internet social network than the just-as-transactional but less efficient reciprocal follower culture and, if properly targeted, more likely to reach people with sincere interest in the subject matter. LinkedIn continues to adjust its advertising model to make it easier and more effective and, simultaneously, incentivize users to sample paid accounts by introducing new limitations to free accounts. Google monetized YouTube last year. These were inevitable developments.

What happens next: The medium gets more competitive and barriers to entry, i.e. the cost of advertising, rise. Businesses should learn lessons and hone their strategies while the learning is cheap.


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