Unless you’ve been on the moon for the last two weeks, you’ll know that Facebook has just announced its IPO (stock market listing), and naturally, the investment case largely rests on the ability of the social network to provide advertisers with a suitable platform for converting its massive audience into business.
But does Facebook deserve your marketing pennies, dollars or sheckles over the plethora of other marketing avenues out there?
The main opportunity here is pay-per-click advertising (PPC) through ‘Facebook Adverts’. I’m a huge fan of PPC because it can be incredibly labour-saving and efficient (in fact to learn why I think in many ways it’s the holy grail of marketing read my recent blog post), and Facebook can offer some very neat targeting options.
Remember all that stuff you said you ‘liked’ on Facebook? Well, advertisers can target you on the basis of those things, so in theory Pepsi could target everyone on Facebook who ‘likes’ Coke.
Combined with more traditional demographic filters, the combination should be a pretty powerful means of reaching your ideal customer. You can steer a respondent to a URL of your choice, or get them to ‘like’ your business page with one click. And, unlike Google’s basic AdWords offering, Facebook Adverts also requires you to include an image in your ad, to help catch the eye (though by the same token this is one more variable to worry about).
With 850 million users worldwide, and the average user visiting 40 times per month for a whopping 23 minutes each time, this should all be adding up to a fairly compelling advertising solution, no?
Well, not in my book.
On Google AdWords (the most obvious competitor), you can expect a clickthrough rate (CTR) of 3% plus if you work on your ads and go for suitable keywords. Getting clicks isn’t generally a problem, even if – as I do – you like to operate at around the £0.04 per click rate.
On Facebook, using ads I’d already refined over on AdWords, guess what my clickthrough rate was? A poor 0.055%, making my AdWords CTRs at least 50 times better. Still – bar the waiting – I guess in a sense it doesn’t matter as you only pay for the clicks you DO get, right? Well, that’s on the basis of £0.13 a click too.
The acid test is conversion, of course. But I haven’t seen a better ultimate conversion rate that would balance the aforementioned negatives out (although, as a caveat, there’s one strategy that I found effective with Facebook Adverts and that’s for email list building. What you should do is set your ad up aiming for ‘likes’ of your business page, and then ensure that the first page that new ‘likes’ see is your email opt-in form, integrated from e.g. AWeber, which you can do with a bit of knowhow. Over 16% of my new ‘likes’ converted to email newsletter subscribers with this method – which is very respectable.)
The upshot is that right now, Facebook just doesn’t compete with AdWords (or even Bing and Microsoft adCenter) on volumes, CTRs or CPCs (cost per click).
Ultimately, I suspect the obvious issue Facebook Adverts has is that users are in a fundamentally different frame of mind when they hit Facebook as opposed to Google.
On Facebook you’re looking for fun, relaxation and engagement with friends. You may have ‘liked’ donuts six months ago but it doesn’t follow that you’re particularly likely to respond to a Krispy Kreme ad right now.
Contrast that with Google. You do a Google search for almost diametrically opposed reasons – because you have a problem that needs solving right now, and that’s when you see targeted ads, the best of which hold out an appropriate solution.
It’s pretty obvious which is the better platform for posting an ad.
I have to say too that Facebook has compounded its shortcomings with customer service that is absolutely diabolical: this should genuinely be an embarrassment to a multi-billion dollar corporation.
They’re not alone in this – Google AdWords also employs a one-size-fits-all, highly officious interpretation of ‘service’-via-brusque-automated-boilerplate-email for smaller customers – but I’m afraid to say Facebook takes the biscuit for dreadful service.
I had a voucher entitling me to free advertising credit, but Facebook charged me real money instead. I’m far from inexperienced with PPC platforms, but it took me ages (via Facebook’s complicated online query system, which I’m sure does all it can to avoid having you actually get in touch) to eventually log my complaint, only to receive an automated email which said:
“Thank you for contacting the Facebook Ads team with your question. We’ve included answers to advertisers’ most common questions below, and links to more information about Facebook Ads. Visit our Help Center for everything Facebook Ads related!
[series of links]
If your question was not answered with the resources above, please respond to this email and we’ll be happy to provide you with more information.
Thanks for advertising with Facebook!”
In effect, this response says ‘we think you must be an idiot – are you sure your query isn’t covered by any of the following links? If not, then despite the fact you’ve already lodged a complaint, the onus is again on you to contact us back.’
Would you believe that two emails to this address later, and having now lodged a total of three complaints, I still haven’t had any response 18 days later?
Having just put down Gary Vaynerchuk’s essential ‘The Thank You Economy’, this kind of thing is enough to make you weep – or more to the point not place any more business with Facebook and badmouth it in blog posts read by potential customers like this. It isn’t as though Facebook can afford to rest on its laurels – Google’s PPC business is all-conquering and prising any of that away will be extremely tough. At least when Avis were number 2, they tried harder!
Contrast that with nascent PPC competitor Amazon’s high level of service (which to my mind doesn’t suffer through being automated) and it’s clear to me that if Facebook is to have any hope of making IPO investors happy then it needs to up its game.
I for one would not be a buyer of the shares – and I don’t need to wade through an IPO prospectus to make that call. All the evidence I need is in the customer experience I get as an advertiser.Website owner? Google+ is a complete no-brainer for you. Connect with me there now...