Pizza Delicious Bought An Ad On Facebook. How'd They Do?
npr.org
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1. They target people who like Italian food. They don't target people who like Pizza. 15,440 people in New Orleans have liked Pizza on Facebook.
2. They don't target people who like other Pizza Outlets. Or other local restaurants. If a resident likes one local outlet, he is more prone to like other local establishments too.
3. They disregard targeting friends of people who already like Pizza Delicious. And by doing so - they don't use the most powerful feature Facebook has to offer: social proof.
4. That they do any kind of targeting beyond geographic targeting at all is probably erroneous for their type of business. Seriously - if they were running ads offline, would they run an ad in a magazine about Italy? Or would they run it in their daily local newspaper? Pizza is something that has a wide interest. There is no need to restrict based on any kinds of interest.
5. There is no benefit in Liking Pizza Delicious on Facebook. No special Facebook offers. Or discount coupons. And yet they were expecting people to like their page and come visit their place right away. Their call to action is weak. You can't expect facebook likes to convert into orders straight away - when you don't even ask for an order.
6. Their measurement method is very inaccurate. Asking people where they found out about you has been proven to be very very inaccurate. Instead, give them a coupon and track based on that.
7. There was a total mismatch with their online and offline metrics. Do you ever like a page on facebook without knowing about that brand from before? Yet, they are tracking the number of Likes online. But asking people how they found out about them offline.
And as a side note -- thank you for mentioning social proof. I'm constantly stunned at just how often this powerful concept is ignored or disregarded in marketing!
And lets face it, things don't look good if both GM and an independent business don't have enough of a clue to do a successful FB marketing campaign at this late date.
> 1. They target people who like Italian food. They don't target people who like Pizza. 15,440 people in New Orleans have liked Pizza on Facebook.
There are literally thousands of pizza places. Pizza Delicious isn't just a pizza place. It fills a niche that's closer to "Italian Food" than to just pizza.
> 3. They disregard targeting friends of people who already like Pizza Delicious. And by doing so - they don't use the most powerful feature Facebook has to offer: social proof.
No they didn't. From the article: "Their first idea was to target the friends of people who already liked Pizza Delicious on Facebook. But that wound up targeting 74 percent of people in New Orleans on Facebook — 224,000 people. They needed something narrower."
> 5. There is no benefit in Liking Pizza Delicious on Facebook. No special Facebook offers. Or discount coupons. And yet they were expecting people to like their page and come visit their place right away. Their call to action is weak. You can't expect facebook likes to convert into orders straight away - when you don't even ask for an order.
Their goal was to increase sales, not increase likes on facebook. They considered the likes on facebook to be a metric, and it turned out to be useless by itself.
I've never advertised on Facebook, nor do I use it any more, but I thought the whole purpose of getting "Likes" was having a wider audience to which send offers and coupons. In that case it is a metric, it's not useless.
This article made it sound like Likes are supposed to be promises of business. They're not. They're just the opportunity to win business.
I'm not sure anyone has really nailed the formula for converting "likes" to actual sales.
Targeting friend likes would have been a good way to build likes and then with a decent social media strategy where they post things interesting to their audience would have translated into sales. Given the wide range of pizza I'd think a morning show / George Takei format where they post stuff that's entertaining would be a good way to expose people to the brand.
Social media is more about awareness and recall than purchasing intent, similarly to the way McDonalds advertises, they don't expect you to jump off the couch and go buy a hamburger but hope that the next time you're thinking of a hamburger you'll pick McDonalds, or the next time you see a McDonalds you'll think about getting a hamburger.
If they are intent on converting instantly to sales, I would have put out a web-only coupon that's driven by friends of Facebook likes. Going to the coupon link would drive a remarketing list and then the remarketing list would be used to drive potential customers back to the site / Facebook page.
Seeing no increase in sales from a $240 ad spend Facebook only with no follow on is hardly surprising, imagine McDonalds running one TV commercial and then saying TV doesn't work.
One thing I definitely would have done differently is to add a hook with the like in the form of traditional marketing (a coupon or discount). Small businesses have used discounts for ages because it works.
I'm actually very interested in how the advertisement and marketing landscape will change over the next 5-10 years.
My friends that work at the big CPG companies and ad agencies tell me one story consistently about their interactions with Facebook (the company) - if it's not working, Facebook universally points their finger at the customer and says "You're doing it wrong". That can't end well. (Or maybe it can. Print ads are pretty awful as well.)
Can an ad platform that requires so much specialized marketing skill work at that scale? I tend to think "no". Facebook will wind up selling ads that don't work to people who don't know or care, just like the newspapers do. Look for Facebook's analytics to suck in the future once they come to grips with this.
This points to Facebook as a marketing platform, whereas Google is a sales platform.
1. Work on keyword research. Long tail keywords. Negative keywords. If you only rely on keywords Google recommends, you're missing out on quite a bit.
2. Creating ad groups. You can't create an ad group with a 100 keywords in it. They have to be narrowly focused and shouldn't have more than a handful of keywords in each of them.
3. Focus on landing page quality. Create headlines dynamically based on the keywords.
4. Track ROI. And pause the ad groups and ads that result in negative ROI.
And this is only for the search network. Not the display network.
Compared to this, Facebook is pretty simple. But yes - Facebook needs to do a better job educating folks how to best use their ad platform.
Yellow page ad strategies work for Google because people already have buying intent when they run a search. Radio ad strategies work for Facebook. Its more suitable for brand building. If you are selling cars, and an average person buys a new car every 7 years - you won't see a lot of sales in the first 3-6 months. Facebook needs to educate on this.
AdWords: When people search for something, we'll show them your ad, which they'll click, and then buy something.
Facebook: At various times, we'll show people your ad. People will click on it, but the vast, vast majority won't buy. But you've just engaged with them. So you need a fan page and the right kind of content to put on it. If you do this right, you'll build brand loyalty and increase sales in the long run. Did we mention you can use Facebook ads to drive fans to your Facebook page?
Conceptually, Facebook is way more complicated, and less easily outsourced. You can hire an AdWords guy, throw money at him, and get results. With Facebook? Not so much. You can try to outsource it, but it's expensive, and everyone will tell you "you're doing it wrong" (because you are), which is becoming a very common theme with Facebook ads.
If everyone is "doing it wrong", does "it" really work?
When selling AdWords, the most common objection I get is "nobody clicks those links". That is, of course, extremely easy to overcome.
When talking about Facebook, the first question is, "what's a fan page, and where are these ads? Can you just do it all for me?" They usually haven't got a clue where to start, and their first instinct is to pass it off to someone else so they don't have to think about it. There's a market opportunity there, but it looks a lot more like traditional media advertisements (low effectiveness, opaque results) than online ads.
Facebook needs to educate these people if it wants to be more effective, but it seems odd that they should have to. Does this happen in other forms of media? I can't imagine a TV network holding an advertiser's hand as much as some people want Facebook to. Maybe I'm expecting too much of these advertisers, like knowing the medium they plan to advertise on.
In my experience, you are. Most just want to pay money and have customers walk though the door. They don't care about marketing, media, or the intricacies of intent, social proof or anything else.
AdWords almost works this way. Facebook very much doesn't.
The bottom line is that the advertisers don't know or care how it all works. I've witnessed this at tiny mom and pops all the way to Fortune 500 companies. Frankly, I'm shocked that GM noticed that they weren't making money off Facebook ads - that puts them ahead of their peers in a substantial way. You'd be shocked by how much money is wasted - straight up thrown away - by big companies on Facebook.
I've found more often than not people simply take advantage of the offer of the coupon, and rather than "new fans" of your franchise, you simply get one-timers. They're bargain shoppers, not potential repeat customers. This is the same problem that plagued many Groupon clients. So while it might offer you a hard and fast showing of how many people are willing to try your place with a coupon, it doesn't prove a) your ad has reach on its own merit, or b) that you're targeting the right group with your ad.
These products are great to gain exposure, and build a customer list. One could use groupon to get the ball rolling and then with other marketing tools work on that customer list.
Yet people fall pray to the trap. They keep using such products. All while taking losses in order to "builf their brand".
New businesses or dying/slow businesses should focus on expanding their customer list. But more on nurturing it. There lies the key.
A business relationship is like any other. It needs TLC in order for it to grow.
There really aren't that many online to offline tracking devices that work better than coupons.
One other idea is to list a unique phone number on Facebook. So you can track which sales come because of Facebook and which come because of your other marketing activities.
As someone in New Orleans, the problem that no amount of advertising will fix is their physical location. That surely has to be extremely limiting to their prospects of success.
http://www.economist.com/node/7138905
Part of the difficulty in measuring success or failure of advertising efforts, of course, is that different businesses gain different forms of utility from successful advertising, with some businesses structured to gain from almost any increase in reputation, and others depending on prompting direct contacts with salespersons, and others desiring to increase direct, in-store customer visits. Each business client of an advertising campaign in a free enterprise economy should be allowed to define "success" in a way that is meaningful to that business, and each thoughtfully managed business will shop around for the advertising provider that best delivers success meaningful to the client.
And of course providers of advertising compete with one another by offering reasonable targeting solutions at reasonable cost. From the submitted article: "Their first idea was to target the friends of people who already liked Pizza Delicious on Facebook. But that wound up targeting 74 percent of people in New Orleans on Facebook — 224,000 people. They needed something narrower." The clear implication here is that the restaurant could have reached the same huge number of people living in New Orleans through some other channel for less money.
...social advertising is so new that nobody knows for sure [if it improves sales]. It's still unproven, untested and largely unstudied.
This simply does not follow from the anecdote of one tiny campaign, so it's coming from somewhere else.
I don't want to ascribe malicious intent to the authors, so let's rebute their conclusion directly: "social advertising" isn't wholly unlike other forms of advertising, with the principal difference being that you now have access to a lot more data when deciding who sees your ads, such as people's declared preferences and their social network.
It's up to businesses to figure out a media strategy making use of those data. Sure, this might take time/experimentation, but also seems quite obviously a better deal than placing ads in the Yellow Pages or broadcasting them (nearly) indiscriminately on TV or radio.
Perhaps they will next spend $250 on photocopied flyers and get 500 new customers. Perhaps they will then spend $1000 on a quarter page color ad in a local paper and get 10 new customers. None of these raw amounts have any bearing on whether Facebook costs $240 for getting no customers. What matters is whether there is a return in the investment for the ad campaign.
The implication that it is better to spend $240 on an ineffective campaign than spending more than $240 on a better campaign is not a reasonable comparison.
Of course the campaign was not completely ineffective. It cost them $240 to find out that Facebook campaigns did not provide a good return in their specific case. This may or may not be applicable to other businesses. Apparently GM has reached the same conclusion with $10 million in ad money. The Pizza place is smart, they were able to come to GM's conclusions for their own case, but it cost them a lot less to learn this information than it costed GM.
I disagree ($240 might represent the entirety of their marketing budget for now, so the ROI on flyers could be moot), but regardless, parent did not mention ROI at all.
Anyone who successfully solves this problem will end up with a business which is, roughly, Google-scale. (As they always say about contents: many will enter, few will win. Many have entered, like every broken husk of a group-buying company before Groupon.)
$90B p.a in the USA and growing.
Edit: added next comment afyer being downvoted for now obvious reasons.
Could not copy and paste due to phone not having such feature.
I meant to say that this is my target market even though it is one of the oldest problems in business. It is not fancy or the latest fad. But it impacts everything directly. Marketing powers the economy. Jobs. Startups. Software.
My choice was to design a solution with software that would allow businesses to attack this problem effectively and efficiently.
The size of the pie available allows for others to join in. Innovation is greatly needed in this area. I encourage fellow engineers to take a deep look at the problem.
They chose to advertise to people who don't know them, instead of marketing to people that do.
This is so simple, yet 99% of us don't get it.
To convince someone new to buy from you takes times and money. Lots of it. But what do we do after those customers are made?
We ignore them.
So we spend all that money to win over new people and then ignore them.
If Pizza Delicious had instead focused on getting their current customers to buy again, then their investment would have paid out. In fact, the response ratio would have been higher due to the fact that more people would have responded.
But sadly, big media like facebook promotes their advertising like some sort of fix all. When in fact, it works like advetising on the newspaper. As expensive. As innefective. For most businesses, that is just a waste of resources.
If Pizza Delicious is reading, send me an email. I will build you a marketing system that will not only be cost effective, but will work.
PS. Before using facebook, or adwords ads consider direct marketing. If you don't have an idea, then drop me a line. I'll help you get your business off the ground.
Take a Pizza place - say an average customer gets 12 pizza's a year. Pizza D can focus on trying to get more business out of them but how many more pizza's do they sell? Can they maybe sell 3-4 more pizzas per customer per year? Compare that to an entirely new customer each which brings an average load of 12 more pizzas a year. Even if it costs twice as much marketing to convert new customer its still worth it.
Ultimately it comes down to your business and your campaign and which type is more valuable.
Sure, it's more expensive to get new customers than to retain existing ones, but it seems likely that they need more customers if they want to sell more pizzas.
Facebook may help with that by propagating their brand through existing customers' social networks; except, as the article points out, that doesn't appear to translate reliably into sales.
They went into the local restaurant business. All they can do is build a limited customer list that will only net X amount of profit.
Once it is possible, they can systemise the whole thing and duplicate efforts by opening another locale.
As limited as we may see it, this is how most big pizzerias came to be.
I have a local chain that has been going for about 35 years. Only have they begun expanding in the last 15. They now have about 10 locales, and their revenue is close to 3 million/year.
I do realise there is a bigger issue at hand, and that is that most businesses are started on a whim. Without any planning whatsoever. When these fail, their founders blame everything but themselves. Of course, this is human nature (as detailed by Dale Carnegie in his book).
One local restaurant in my town used to sell ad space on its placemats, but that probably is a negative impact to customer perceptions of quality. Maybe a pizzeria could sell ads for other local businesses on its pizza boxes.
Most businesses cannot sell advertising to make ends meet.
Imagine if on every box of MS office sold there were advertisements.
Edit:
Most brick and mortar businesses do not have the luxury of "pivoting". The tech world is lucky on that way.
Ever drive past an empty locale and think "Wasn't there a Pizzeria?" All businesses that follow will have to fight such phenomenon.
Due to the internet not being anywhere we don't get to suffer that.
The equiv of this story on Google would be that they ran ads, got a few hundred click-through to their website but nobody signed up. What would you pinpoint as the problem in that situation?
Facebook ads can work, but I don't think they work well for local businesses, but rather for big brands that want to build an image, more akin to TV commercials.
People use the word "viral" way to much
It is too early to measure the success of the ads in a real world scenario. These pizza ads are very much about exposure (and not BUY NOW) but the article presumes that the only metric of success is people running out the door, getting in their car and buying pizza immediately after seeing the ad. This behavior isn't reflected in other media, such as TV, magazine ads, billboards, PR, etc, so why hold Facebook to a higher mystical immediate marketing standard? Online ads can indeed drive immediate sales but that is for online businesses where there is buying intent, and this pizza store clearly isn't in that category.
Another aspect overlooked is that unlike a google ad or magazine ad where you pay per exposure/view/instance, these Facebook ads serve a lead acquisition strategy that can be used multiple times. Pay once to acquire the customer, then market as much as you like for free. Once you have the customer as a "fan" you can market to them every week or even every day making the original investment much more valuable. Marketing is about repetition and exposure so it may take X Facebook posts before the consumer receives sufficient exposure.
FB ads have been around for several years and there are plenty of businesses dropping $10Ks a day and making a very healthy return. It's been proven, tested, and studied ad nauseum.
What is the agenda of these articles, exactly?
And it works. It's just not very easy to directly measure its effects on a small scale.
It's one thing for a couple of guys running a pizza place not to grasp this concept, but for a large corporation like GM, it's simply preposterous.
I went with my gf and the burgers were great. We went back the next week and paid full price. I'm sure we will go back again.
For some reason it's not as popular as it used to be, which is a shame :( I think it's tough for them to compete against the heavily saturated advertising of Chili's, TGIF, Outback that sort of thing. They're kind of in a weird spot with tough competitors, even though they're way better in terms of the actual food they make.
They're probably resisting the pressure to serve food out of microwaves and bags, and paying the price :(
Advertising only works as part of a larger joined up campaign or strategy.
Maybe Facebook should move into doing some kind of deals thing like Groupon?
What would be great would be if he had a way to target people who were on their way to the Grand Canyon or who had just visited that day. Obviously this is something Facebook could easily provide great insight into. But as far as I know, they don't.
He's got a facebook page for his place, and it does well with the locals. And he gets his share of tourists via the traditional routes, but it seems like there's a wasted opportunity here with Facebook...
In this sense facebook is the new newsletter, and this company just got 240 new subscribers that are local and perhaps interested in their food. If they just stopped at the targeted ads, they just gave up on a wealth of potential sales.
1. People who were already customers of PD and became more aware of their Facebook presence due to the ad. 2. People who were unaware of PD, but liked them in response to the ad.
If most of their likes are people in category 1, that would explain why the increase in likes does not at all translate to an increase in sales. I'm curious how many people there are in category 2, who will just like random things advertised to them.
There's your problem right there.