Last month, I wrote about Facebook Pages for businesses, and mentioned three local businesses (Iron Horse Vineyards, Restaurant P/30 and Screamin’ Mimi’s Ice Cream) that are using Facebook to interact with existing customers (and presumably driving repeat business to their establishments). My point was that business-to-consumer (B2C) companies can benefit from using Facebook as a marketing tool, since people already congregate there. You just have to let your customers know your business is on Facebook.
But what about Facebook users who aren’t already your customers? As you might expect, Facebook also gives businesses the opportunity to place targeted advertising in the right-hand column of pages displayed to users. Each ad contains a 25-character headline, up to 135 characters of body text and (optionally) an image. Facebook lets you target people based on geography, age, gender, education, relationship status, workplace and keywords. According to John Jantz, one man was able to target an ad so specifically that only his wife saw it.
Of course, if you don’t already have a pretty good picture of what your ideal customer looks like in terms of the various demographics you can target using Facebook, you should probably develop that profile before considering spending money on any sort of advertising. I was in Fort Worth, Texas, last week, and I saw a billboard along I-30 for the liver transplant program at a local hospital. I couldn’t help asking myself, “Whom are they trying to reach with that billboard?” The same question could be asked about a lot of ads.
What does it cost to advertise on Facebook? It offers both a cost-per-click (CPC) and a more traditional cost-per-thousand (CPM) pricing model. CPC will be familiar to businesses that have used Google’s AdWords service: You pay only when someone clicks on your ad. CPM is based on how many people are exposed to your ad (which doesn’t mean anyone is paying attention to it). In both cases, the cost is based on how much other businesses are willing to pay to have their ad shown to the same people, and you have to walk partway through the ad creation process to find out. So, I can’t tell you exactly how much your ad might cost. But, since you also set a daily budget for your advertising and Facebook won’t exceed that amount, you can set a limit for how much a Facebook advertising experiment will cost you.
Given that you can target people pretty specifically, the real question becomes: Do people respond to the ads? On its pages that talk about advertising (facebook.com/ads), Facebook offers three case studies to support the position that yes, they do. But doing a larger search for data and opinions yields my standard answer: It depends. Jantz of Duct Tape Marketing believes it has an ROI slightly less than that of Google AdWords. Others have found Facebook totally ineffective. And since so much of advertising depends on the headline, the copy and the specific offer being made, it’s very hard to make any definitive statement. In cases like this, the only way to know for sure is to run some tests for yourself. And that takes time, thought and money, which means most businesses aren’t going to make the effort. Surely, the unwillingness to try new things must be the number one reason businesses eventually fail.
If you think about it, Facebook ads suffer from the problem of most advertisements: You don’t know if someone is actually looking for your product at that particular moment. The person viewing the ad, while demographically similar to your ideal customer, may not be paying any attention at all. Contrast that with Google AdWords, where the person viewing the ad has actively searched for something related to the advertisement. If you add words like “price” or “buy” to the keywords for an AdWord advertisement, you’re even more likely to target people actively seeking to purchase.
Should your business advertise on Facebook? Only if you’ve already set up and actively use a Facebook page. If you don’t have some sense of the environment, you’ll have almost nothing to go on when creating and targeting advertisements. Of course, you can do what most people do with their print advertising, which is let someone else handle it. Facebook is a growing venue for advertising dollars, which means plenty of people will take your money to help you. But frankly, it’s not that complex unless you’re a major brand running multiple campaigns and doing a lot of testing.
Spending $50 a day for a month will certainly tell you if Facebook is a useful venue for advertising your business. Of course, that $1,500 doesn’t count time spent thinking about targeting, creating an ad and then tweaking or creating new ads (and looking at the results). If you aren’t set up to measure results, online advertising is just throwing money down a hole. Done right, however, targeted online advertising can have a significant impact on your business. (By the way: Don’t start out by spending $50 a day on Facebook ads. Spend a few days getting acclimated at the $5 or $10 level.)
Regardless of whether you decide to advertise your business on Facebook, it doesn’t hurt to know what your competitors are doing there. Do they have a Facebook page? How many fans do they have? What sort of comments (if any) do people leave? Are they making special offers to their fans? Most important, does it seem to be effective for them?
Whether you know it or not, many of your existing customers are Facebook users (more than one out of three in the United States). If your business is consumer-directed, you owe it to yourself to explore what Facebook can potentially do for your business in terms of interacting with existing customers (pages), reaching new customers (advertising) and even conducting e-commerce (www.payvment.com). Questions? Drop me a line at mduffy@northbaybiz.com.
