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Facebook Advertising Excels for Certain Categories

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The effectiveness of Facebook advertising has been the subject of many debates among online marketers.

Some say it’s effective and others say it’s just too expensive.

It appears that the truth depends as much as anything on the type of business doing the ad campaign.

I have managed enough Facebook advertising to realize that some businesses should advertise on this massive social media site. Others should not waste their money. Experimentation will reveal the right answer for each business.

A Brief Look at How It Works

Log into Facebook and look at the ads in the middle of the page in the news feed and on the right side of each page. News feed ads disappear when the user scrolls, while the right side ads usually lock into place.

The center ads are largest and usually have “Suggested Post” and a link at the top to the advertiser’s Facebook page followed by text, a large image and more text. The text at the bottom may have a link to an external site if that is the campaign goal.

Ads on the right column are smaller and also have an image. But they have less text.

The advertiser uses the Ad Manager to create the ad and target an audience based on geography, demographics and subject interests.

The campaign report shows several useful metrics including:

  • The number of Likes acquired by the campaign
  • The reach in impressions
  • Frequency of impressions per person
  • Number of clicks
  • Click-through rate
  • Cost per page Like

It Starts with a Goal

One common benefit of a Facebook page lies in getting visitors to click on a link on the page and go to the core website of the business.

The ratio of page Likes to site visitors is the first step in determining whether or not it makes sense to advertise on Facebook.

Some sites will get five visits per month for every Like on Facebook. Others will be lucky to get one visit for every 100 Likes.

Again, the type of business is an important factor in that ratio. Some news sites achieve a 5:1 ratio every month, meaning five visits for every Like. This astonishing ratio is the result of repeat visits to the news site Facebook page. People have a strong interest in tracking news on a regular basis.

Health, retail, travel and other categories may struggle to reach even a 1:100 ratio. Many Facebook users simply don’t have a need to visit a travel page multiple times in a single month.

The higher the ratio, the the lower the cost per acquisition in a social media ad campaign. The lower the CPA, the higher the odds of getting a good return on investment for the advertising budget.

The Landing Page Matters

To be fair, other factors play into those ratios, including:

  1. The frequency and quality of page posts
  2. The amount of competition from other pages
  3. The size of audience interested in the topic
  4. The shares, likes, comments and other factors that widen the distribution of the posts.

Those factors also influence the results of a Facebook advertising campaign. But it appears that the business category carries as much if not more weight.

The key advertising metric in the case of a campaign to increase page Likes is Cost Per Like. It’s a Facebook measurement of how much money is spent to acquire that page Like.

A high quality page in the right category will have a low Cost Per Like. A poor quality page or pages in certain categories will have a high Cost Per Like.

There are other risks worth mentioning:

  • The Like never returns to the page or turns off the feed.
  • The Like unlikes the page.
  • The Like stops using or reduces the usage of Facebook.

But these risks are limited by a low Cost Per Like. So do the calculations before taking the step, then watch the results carefully.

Site Visit Value

Some campaigns try to send visitors to a website to view advertising, make a purchase or take other actions that result in value to the business running the campaign.

If a website gets an average of five visits a month from one Facebook Like, that’s 60 visits a year.

If the site generates revenue at an average of 5 cents per visit, and the cost of the page Like is 15 cents, the advertising campaign pays for itself after just three visits. That’s a high return on investment.

But if the cost per click to the site is $1.50, the campaign doesn’t pay for itself until 30 visits.

Whether a Facebook advertising campaign has a goal of attracting Likes, getting site visits or some other purpose, the campaign needs thoughtful goals and metrics.

If a small test campaign produces good numbers, the business has reasons to expand the budget. If not, the money is better spent elsewhere.

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