Keys to Facebook Advertising Glory: Monitor Stats, Reinforce Success

July 19th, 2010

“Never reinforce failure” — an old military adage that’s equally applicable in the world of Facebook advertising. Why? Because Facebook wants it that way.

Here’s the deal: Facebook charges for advertising on a sliding scale, with the cost going down as ads perform better (i.e., higher click rate = cheaper ads). As an example, we’ve been running ads lately for an NMS client and keep finding that creativity actually hurts — the “clever” ads under-perform their more pedestrian colleagues, with real financial results. Two ads we tried recently had relatively low click rates, for instance, and Facebook penalized us by charging more per response, in the 50-60 cents-per-click range. By contrast, our more generic, more successful and longer-running ad cost only 13-14 cents over the same time period, meaning that we got FIVE TIMES as much value from the same expenditure.

The obvious implication is that Facebook advertisers need to watch the statistics and shift resources away from failing ads in favor of more successful alternatives. From our experience and from chats with a couple of folks in the field, the threshold seems to be a click rate of around .04%, and for reference our generic/successful ad for the campaign above has averaged around .12%.

Of course, this bias in the system doesn’t mean that you have to throw creativity completely out the window, since advertisers need to come up with a solid array of potential messages and targeting strategies to find the ones that resonate with the Facebook audience. But Facebook clearly skews its system in favor of ads that perform well, and smart advertisers will watch the numbers closely. At least, until the company changes its ad model.

cpd

Bookmark and Share

2 Comments Add your own

  • 1. Why popularity matters…&hellip  |  July 23rd, 2010 at 11:27 am

    [...] a recent post on e.politics, Colin Delaney outlines a potential pitfall in Facebook’s ad model that some advertisers may [...]

  • 2. e.politics: online advoca&hellip  |  January 24th, 2011 at 12:28 am

    [...] as low as a few tens of cents. Note that the cost is highly variable, and that at least for now, Facebook’s price structure rewards success: the higher the rate at which a particular ad run is clicked, the lower the cost moves over time. [...]

Help build e.politics

Make a comment, correct my errors, suggest more tools and tactics, leave a case study, or otherwise make this page a better resource.

Required

Required, hidden

Some HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Trackback this post  |  Subscribe to the comments via RSS Feed


Bookmark and Share

Follow Epolitics.com

Follow Epolitics.com on Twitter    Follow Epolitics.com on Facebook     Follow Epolitics.com on Twitter

Email updates (enter address)


SEARCH EPOLITICS.COM


Epolitics.com EBooks

NEW!

Download Winning in 2012 Ebook Download Learning from Obama

Recent Highlights

Epolitics.com Classics

Calendar

July 2010
S M T W T F S
« Jun   Aug »
 123
45678910
11121314151617
18192021222324
25262728293031

Most Recent Posts

home about contact colin delany put e.politics to work