Facebook marketing? Don't bother, says new report | Hacker News Reader

Facebook marketing? Don't bother, says new report

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54 pointscodegeek65 comments

We found Facebook PPC ads to be about twice as expensive as they are worth, and well under-performing Google. We shut it down. But that was based on direct conversions; I guess if you're doing branding you might have a different calculus.

But I'm not surprised to find that other companies don't find it worthwhile either. I'm not putting much effort into the "free" art of FB marketing either.

Hmm, this is interesting. What we've found is the direct opposite. Facebook is 4 times cheaper than Google for us. But I suppose the nature of our companies are different. We're in the movie industry and Google search on movies that were released a couple of months ago are almost always queries looking for pirated sources.

Interesting. I can imagine how ads on such searches would do poorly!

We sell custom bottle caps, and usually people searching for terms in that area are looking for something like us (or us in particular) and are ready to buy. So search advertising is good for us; but even targeted to home brewers we didn't get much traction off Facebook, where people aren't usually looking to buy. It was worth a try, but not a good fit for us. I do think it has some general branding/awareness use, but that's hard to quantify, and we don't really need that right now, certainly at FB's prices.

Having spent a ton of my own money on FB, I can say it does work in many instances, especially with direct response (like what you were trying).

It could easily be targeting too large of a demographic or simply not having ads/landers tailored to your audience. It could simply be a product that is not well suited to selling on Facebook as well, which I've seen plenty of times.

The big take from this is not the effectiveness of Facebook for marketing, since it can and is done successfully, but rather a rant by marketers on the amount of exposure Facebook's algorithm gives them.

The situation is that brands small and large spent lots of money building up a following, but when they post something it only gets exposed to a fraction of the followers. The argument is, why should I spend money getting 100k followers if you only show my posts to 15k (or less) of them at any given time.

On one side, more brand exposure degrades the Facebook experience from ad inundation, on the other side marketers are not seeing the value for time/money invested.

This has always been the thorn in the side of not just Facebook, but most ad driven revenue models. Since Facebook is a social experience it's a challenge that's tricky to navigate, they can't exactly bend over to marketing products and services, that would be a disaster, but the tools and feedback for marketers leaves a lot to be desired.

Indeed. There's nothing wrong with Facebook as an advertising channel, when used effectively and with expectations properly calibrated.

There's a lot wrong with blindly throwing money at a Facebook "fan page" and an ostensible following, expecting miracles to happen and any of those followers to care. (There's also a problem involved in paying for the fans, then reaching a fraction of them with each update -- but that's the nature of how Facebook works, and that shouldn't have been a mystery to most marketers for quite some time now.)

What we're experiencing right now isn't a "revolution" in advertising, as the article suggests. But then again, it's the marketers' fault for expecting there to have been one in the first place. They bought, traded, and sold the hype. Big brands made relatively blind, multi-million-dollar commitments to Facebook and other social channels before stopping to think about what, exactly, they were hoping to achieve.

What those brands are learning today: there's no such thing as a magic bullet. There's no such thing as a free lunch. There's no such thing as a "revolution" in marketing. Nothing will allow you to grow a fanbase, increase engagement, and sell more products without an ounce of forethought and hard work.

Facebook is a channel, like any other. It can be a very effective channel. But like any channel, it needs to be thought through, analyzed, and used properly. The blind honeymoon is over. The platform's usefulness remains.

>> There's a lot wrong with blindly throwing money at a Facebook "fan page" and an ostensible following, expecting miracles to happen and any of those followers to care.

This has actually been by far the worst way of making money off of Facebook in my experience - and I do this full time.

Agreed. The whole "fan page" thing can be a total money pit unless a marketer knows exactly what he's trying to get from the investment.

Conversely, I've had fantastic results from targeted ad buys on Facebook. In particular, mobile app install buys. Great results, decent tracking, easy to analyze from an ROI and LTV standpoint.

Just because you can target people by #anything doesn't mean they'll care about your content. Your content has to fit what you're targeting and whom you're targeting. I feel as though a lot of brand marketers -- ordinarily extremely smart people -- lost their senses about this when they first jumped on the Facebook bandwagon. I've seen some very sophisticated AdWords buyers treat Facebook like a Magic 8 Ball, for instance. It blows my mind.

A few things:

1) Facebook allows you to do some ridiculous targeting, that when combined with retargeting can create some powerful stuff. Check out Marty Weintraub and your head will explode.

2) Our Facebook ads (esp. retargeting w/perfect audience in the news feed) work far better than Google and Goog retargeting.

3) We've found Facebook ads to be great re-engagement tools. People who created an account but have been in-active or didn't complete setup are re-engaging via Facebook ads, leading to more active users.

YMMV of course, and being dumb with any ad dollars is always a bad idea—regardless of platform.

Ahh, Marty. He rules and is probably one of the best FB marketers out there.

He really does. The talk he gave at Mozcon 2012 basically fried the audience's brain. And the way he combines targeting w/cross-platform marketing is unreal.

Yes, exactly! I'll like to add a few more points.

- The approval process for FB ads is dead simple. Ads are usually approved in minutes vs Google day(s) long wait. The longest it'll probably take is a 1 to 2 hours (usually as a result of a new image upload). This makes it very easy to iterate and improve upon your result

- FB gives pricing flexibility. You can choose whether the objective is for branding (CPM) or if you're looking for conversion (CPC, CPA). The ad units lets you focus on your objective

Agreed. I also like the bulk uploader and power editor. It's easy to launch 200 variations of ads in a matter of minutes.

Could you recommend one Marty Weintraub resource to read for someone who knows basically nothing about FB marketing and just wants to have an exploded-head experience?

Sure thing:

- Mozcon talk 2012: Persona Modeling Unhinged: the Zen of Whole Customer http://teamtreehouse.com/library/mozcon-2012/persona-modelin...

- His blog is great for daily inspiration: http://www.aimclearblog.com/

- Killer Facebook Ads (his book): http://www.amazon.com/Killer-Facebook-Ads-Cutting-Edge-Adver... (might be an affiliate link, but not mine—copied it from his site)

Their argument that their targeting creates massive value is only correct so long as their competitors don't catch up. Linkedin, though, is building out its advertising tools and API and allows for really good targeting based on more accurate job positions than Facebook can provide, which is often more useful.

If a company pays for their facebook likes through advertising, why should they then need to pay again to advertise to this same group of people with a sponsored post? It really changes the ROI of a facebook like.

Has anyone been able to prove yet that social marketing can successfully build sales and not just more social-network following? "Likes" are nice, but they aren't green in my pocket.

Likes prevent people from leaving. They let your potential customers browsing your site know "hey, we're not a scammer there are real people who bought and loved our products and services, here's a authentic list of them."

> They let your potential customers browsing your site know "hey, we're not a scammer there are real people who bought and loved our products and services, here's a authentic list of them."

More like "We will annoy you with social network notifications, sell your data, and pollute your facebook page".

EDIT: Certainly not everyone, but if you ignore the downsides you're not spending your money well. Being polite with respect to interacting with your customer is value in itself, and you cheapen your brand by including social buttons. Even the choice of button matters: including a share button treats me with more respect than like buttons AND provides a much higher quality recommendation for your brand per click, even if the clicks go down. If you're advertising on Facebook without testing which provides better numbers at the end of the quarter, you're probably not spending your money as well as you could.

You're following ideology over reality. You have a one sided point of view, a negative one at that, and where... may I ask is your e-commerce site that's devoid of "cheapening" social buttons? I've got thousands in revenue at my little http://dayonepp.com store.

And why are you so negative and hostile towards something over 1 billion people signed up for?

But does it? That's the rationalization, but does it actually? I see a million likes on a page and I think "someone paid for a million likes". Does it actually translate to sales? Or is it all just the ol' 90s hitcounter?

And since I acknowledge that it must work for someone (just like Nigerian Prince Scams work on someone), the more important question is, "and is it worth the effort and cost?" I could spend weeks building a social following for a local business, or I could run a coupon deasl.

Don't think of likes as "getting someone to like my page will make them more likely to buy." You need to think of them as "this increases the network of people who will interact with my content, ads or otherwise, thus spreading them to their friends organically (so I don't pay)." This actually should discourage people from buying scammy likes, because that network will be substantially more valuable if it is more representative of who you want to reach.

1) YOU are NOT the average customer. You're one of us, you're immune to most of the social media marketing that consumers pay attention to.

2) It's FREE. Create a facebook page for your business, upload a photo, copy paste the like box code and call it a day. Jesus Christ what do you have to lose?

FB is the largest single referrer to our site. Using google analytics tracking, I can see that inbounds from facebook are directly linked to tens of thousands of dollars in sales. I have had terrible luck with facebook advertising, but we get great results when people share their bike rides on our site using facebook. Their friends who are probably bicyclists themselves see the link and come through our funnel.

You need both a good funnel, and a message that provides value to a user. It has been crudely expressed as "do you get your user laid", less crudely as "make your user look cool". If you do this, then they'll share your service to all their friends for free. In our case, someone is proud to ride 100 miles, and they'd like to show it off. Our tool let's them do it, so they paste it around on facebook. It's all about your value prop and how someone feels sharing that with others.

> I have had terrible luck with facebook advertising, but we get great results when people share their bike rides on our site using facebook.

Well I think that's an interesting point—this isn't what I typically think of with facebook advertising (i.e. "like" shopping). Figuring out a way for users to demonstrate to other users the value of your product is pretty much ideal, though—it scales very well and I would imagine it's much, much more effective than traditional, sidebar advertisements. Why don't they emphasize this more? I would assume likes are more valuable to them directly as opposed to advertisers....

Facebook advertising has been a massive win for us, and we are seeing > 80% of our Facebook customers are new. It's simply a huge piece of the internet that we were not hitting, because, while the intent piece of Google search is great, there are many people who don't even know our product exists. TV advertising has developed the way it has for a reason.

Have you controlled for all factors? This seems like circumstantial evidence at best; just because facebook customers are new doesn't imply that the improvement is due to facebook.

You are right, we could definitely do more work on controlling all factors here. However, the numbers are so staggering (80% of a not insubstantial group of customers - something we haven't seen in any of our other channels), coupled with the anecdotal evidence we've gathered from surveys and monitoring the comments we get on Facebook (I know, not data, but in the absence of data, I make do) that it seems likely. This is also something that AdRoll has seen - they only see ~19% overlap between people who click through their general display and FBX ads (I haven't seen the study, but they imply that they did some extensive research here).

Google Ads target people who can't tell the difference between search results and ads.

LinkedIn succeeds because they have ads people actually want to click—virtually everyone needs employment, and generally jobs are far more valuable than anything else advertised online. Any given ad for employment will be many, many, many times more interesting to any given person than any given ad on the internet will be.

Facebook has very little worth selling to a young audience that will never click online ads. Who goes to Facebook to find ways to spend money? It's a social network with little relevance to commercial interests (for end users).

Market-specific businesses will almost always beat out the special interests—facebook would probably get more money selling users to specialized advertising customers on demand, or even getting users to pay to make ads/stupid "features" (Games! Anything involving microtransactions! Bugging me to like things I have no desire to like!) go away.

Speaking of which, how is the model of pay-to-remove-ads not more prevalent? Surely it wouldn't REDUCE profits.

Well, I think Facebook would have a hard time making the transition from advertisers being their customers to users being their customers. They'd have to listen to their users if they did that. That sounds expensive.

> They'd have to listen to their users if they did that. That sounds expensive.

You know what else is expensive? When everyone hates your brand.

>> Facebook has very little worth selling to a young audience that will never click online ads.

The numbers have shown that this is provably false.

> The numbers have shown that this is provably false.

I'd love to be proven false! Hit me.

http://venturebeat.com/2013/06/27/facebook-news-feed-ads-gen...

"news feeds ads have a massive 21 times higher clickthrough rates than standard web retargeting ads."

That was just the first results from a Google search of "Facebook ad clicks."

Here's another that only focuses on their YOY improvement, but it's strong evidence that people do click on their ads:

http://mashable.com/2013/10/28/facebook-ad-success-q3/?utm_m...

I suppose you feel the same way about TV ads?

I agree that LinkedIn is doing some really cool stuff with their ad tools. However, while the targeting is really useful, people are just less engaged with LinkedIn as a whole. The best piece of advice I got for improving our LinkedIn ads was to target groups, since people that are in the groups pages tend to be much more engaged with the page than anywhere else on LinkedIn. Excited to see where they go though.

The CPC's on LinkedIn are really high (for self serve anyway) which make ROI really hard except for high LTV products/services. I can get clicks on Facebook similarly targeted for <$0.10 for what LI charged $4.

Facebook pay per click remains a mystery to me. We are huge PPC media buyers, but we gave up on Facebook a long time ago. We’ve experimented with it over the last year or so when new features were implemented, but in general, it’s at the very bottom of our marketing budget as well. I used to think it was something we were doing wrong, but this report suggests a lot of people aren’t finding value there as well.

It really seems that when people are on Facebook, the one and only thing they pay attention to is their friends and personal interests, and it’s very difficult for ads to convert that interest.

What industry are you in?

We think it has a lot to do with our demographic. We’re a research and publishing company and our customers are for the most part consumers over the age of 35. With that being said, I find it hard to believe our demographic should be a hindrance, considering FB is massive and now spans the general population. Furthermore, there are tons of options and means to target our specific demographics. Yet FB leads have the lowest conversion rates seen anywhere and in general every attempt at using the system fails. (once again, we are highly experienced PPC buyers)

Either way, we’re fine spending our budgets elsewhere and understand that FB is working miracles for others. We’ve just always been vexed by the FB advertising hype and this report helps to validate for us that not all markets work for everyone.

I've heard this from other media buyers, and I've had the exact opposite experience. Out of our monthly budgets, FB is 65% and google less than 25%.

I'm really curious as to what/how you're advertising on there. Some do well, some don't, but I've managed to convert many losers into winners.

Ha.

I've been an affiliate marketeer for quite some time now, doing FB ads and I can tell you, FB ads DO work: both for the affiliate and the advertiser.

Last month I generated around 50K rev in comisions (around 60% profit) and the advertiser even increased my payout because the leads are converting to paying users.

Of course this is not always the case, but in general they do work and quite good I might say.

This report is so wrong it's painful. "Likes" are great, but that's not the most valuable ad type on Facebook. In fact, in our most successful ads, I intentionally exclude people who have liked us (why would I pay to reach people who already know who we are?). Facebook ads have been the single biggest win for us of the past year, as we are seeing 80% of our Facebook customers are new to us.

A useful framework I have used to explain to people the value of Facebook advertising is to imagine the internet as a hardware store. Someone goes to the hardware store because they need a hammer. Google would be the aisles with signs and directions to get there. Once they are there, and waiting to check out, they see things like gum, or energy drinks, or keys, etc., that they needed to be reminded that they wanted. Facebook is more like the checkout stand, as it can remind or introduce impulse purchases that the intent leveraged by Google intentionally excludes.

Facebook is also much more similar to hyper-targeted television ads.

Im going to comment on the model for Facebook and how it seems unnatural and forced. With Google, the user has indicated intent via a search or visiting some site of interest. Google associates ads based on the content which is based on the users intent to find information.

Facebook for their newsfeed and ads on the right seemed to inject ads right into content and force some portion of its users to see them. The user likely never wanted or had any intent on seeing anything but friends posts. Thus its not surprising many users may not participate with clicks. Its interesting from the article on bus insider that the click thru rate is high for news feeds. I suspect that forcing ads in the middle of a friend to friend conversation gets the users attention and some clicks. However, is it what a user really wanted to do in the news feed. The user wants friend-to-friend information. Facebook for the news feed ad inclusion reminds me of TV infomercial or tv ads but on a channel that the user themselves value. A bad experience overall.

What can drive real conversions is user intent. A user wants to find information or opts in to an ad channel, then you'll get very good click thrus and conversions. Thats why i like Google's model so much. However, google suffers from a hit or miss approach on actual content and its value. however, as we know, the page rank/etc... tries to make computers get a good match.

i think if we can have a social fabric that is truely social and valuable and not polluted by injected ads that may be very very valuable. I think Facebook could suffer a demise more and more for this ad strategy they have. Ads, promotions, attractions should be a fun and willing experience not a forced one. Perhaps this is an idealist view. comments ?

Yes. Facebook marketing is dead. You shouldn't even try it and just go to other places. It's literally impossible to get a positive ROI there so just move along, nothing to see here.

Hiring people that have no idea how to market: Dont bother says me.

I know people cleaning house marketing there. Groupon is doing an exceptional job for example.

The difference between the top and bottom result in the survey is 0.3 on a scale of 5. Given the small sample size of most survey research my hunch is that these differences are directional only.

Here is the original report:

http://blogs.forrester.com/nate_elliott/13-10-28-an_open_let...

One problem I see with people bashing Facebook ads is that it is definitely easy to burn money quickly on Facebook chasing things that seem profitable. For example, we found some very small targeting groups that generated extremely good CPAs initially, but they were so small that once we saturated them, our overall CPA skyrocketed. Once we established what was risky and what was less risky, we've been able to keep our numbers strong - mainly by using Custom Audiences, lookalike audiences, and competitor segments. Facebook also takes much more active management in terms of turning ads on and off than SEM ads. However, a huge pain point for those of us in places where we seem to have come close to maxing out growth from search. Facebook has helped us address this, since it seems like there is a substantial portion of Facebook users who simply haven't heard of us, and Facebook is way cheaper than TV ads.

Facebook marketing is great for some things and horrible for others. It is good for building up a brand that has a cool image. Here is an easy test, would the thing you are advertising interest somebody at a party, or would you promote it to your friends as something interesting or valuable without receiving any payment in return? Is it something that has intrinsic social value, or is it just a product that you are trying to spam people with? I have seen real results in FB advertising for building up artists and musicians and growing their own fan base. But, for selling products it has not worked out for me to be a good ROI.

As someone with an array of absolutely massive fan pages (> 3 million fans on some), that are completely legitimate, I'm getting a viewing percent of < 1%. Unpaid marketing on Facebook is useless. It feels similar to extortion that I've built up so many people who have specifically asked to receive information about my websites/products via Facebook and Facebook wants to charge me over $5,000 PER status update just to reach MOST of my fans. I've learned my lesson on investing into the Facebook platform

Is Facebook vulnerable to people not taking Facebook and its 'likes' seriously anymore? I've started liking every page that is 'suggested' by Facebook only because I've grown bored with Facebook and was curious what result this would have. I started thinking about the implications of this becoming a trend and it seems Facebook would lose most of its value to brands and companies if Facebook 'likes' stopped corresponding to real world 'likes'.

"Everyone who clicks the 'like' button on a brand's Facebook page volunteers to receive that brand's messages — but on average, (Facebook) only shows each brand's posts to 16 percent of its fans,"

This is due to the way EdgeRank works - you get low exposure if you make page posts that do not get viral uptake. I know people that routinely get over 70% engagement because they make content that people, you know, like.

There is a problem with a focus on getting "likes". It doesn't convert. Neither does it increase sales. It's a vanity metric. I just wrote a post to explain how small of a mileage like actually brings for the effort exerted. http://thomasdiong.com/post/65443615643/social-media-vanity-...

I've never pushed for a focus on getting likes; instead, it is just one stage in the conversion funnel.

I consider them akin to email addresses, just with a much more variable ROI. You do have to manage your fan base, cultivate it and engage it as you would a large mailing list. They are definitely not a direct revenue driver though.

As an affiliate I've not used FB pages to profit, but I've got a few friends in the industry that have pages with massive followings. They are very skilled at monetizing their followers, but it is also an extremely tough thing to do. It is definitely not for the faint of heart - or wallet :)

The problem is user commercial intent: "I need to spent $3600 on a new thing for my thing. I'd better search the web with Google to find it." "I need to find out what my ex-girl friend did last Saturday. I'd better go to Facebook."

The average Facebook cost per click is about $0.80. I would be a buyer at $0.04 cost per click.

I would be shocked if those survey results were statistically different from "the same." The spread from the top (YouTube) to the bottom (Facebook) is 0.11 on a 1-5 scale, with a sample size of 395.

If I assume a std deviation of 1 (which seems low), that's 2-sigma, total, top-to-bottom.

Facebook retargeting and general CPM advertising works well, but don't bother trying to build your fan page likes/numbers.

FWIW, we spend about $40/month getting to 1k+ likes, and only 35-50 people, on average, see our non-boosted posts.

To be frank, it really pisses me off.

Shameless plug, my employer has done pretty well with direct marketing on Facebook, which from this thread seems to be way more common here than it is elsewhere (I guess branding's more corporate?) So if you're curious shoot me an email (it's on my profile).

There is no point to making a forecast unless you either say the "sky is falling" or "utopia ahead" since no one will remember your prediction otherwise. Nuanced predictions are only for those not selling something.

This is silly. At Perfect Audience, we have thousands of customers making anywhere from $5-15 for every $1 they spend retargeting on Facebook. Yes, it takes work and some testing. But to say "don't bother" is silly.

At the risk of “citation required”... Really, you can show “thousands of customers” who generate up to $15 of income for every dollar spent with you?

I won't, but I can, sure. Check out this post on our blog about a guitar teacher using us to sell online lessons through a combination of Facebook ads and banner ads: http://blog.perfectaudience.com/2013/10/24/retargeting-micro...

We track sales and conversions for our customers pretty carefully to make sure we're producing results.

Also, I said $5-15 in sales. That's a big spread :)

"Give us $499 to substantiate these inflammatory headlines," says new report

Our experience has been that FB ads for a particular service/site work well for about a week, and then the cost quickly rises to the point where it's no longer worth advertising there.

That's about right. Their ads do have an insanely short shelf life relative to other paid ads. You have to be aware of this and plan for it. However, an engaging ad will continue serving long after you stop paying for it, which helps mitigate this.

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