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Facebook Ads Don’t Work. Here’s Proof

Facebook Ads In October of 2007 I decided to test Facebook Ads to see if the hype was substantiated. The prospect of being able to advertise to a large group of people by leveraging specific social profile data seemed like a gold mine.

Based on my experiences in the past few months I can say that Google has nothing to worry about. Facebook Ads are not even close to being an Adwords killer.

Let me take you through an example comparing Facebook Ads and Google Adwords for something that was inspired by Sugarrae - a microsite advertising Stephen Colbert’s new book I Am America and So Can You.

I setup a brand new site to showcase Colbert’s book at colbertbook.com - a few informative pages with affiliate links to the hardcover and the audiobook. I tracked traffic and outbound clicks via Google Analytics.

I setup the following Facebook Ads…

Colbert Book Ad 1 Colbert Book Ad 2

and setup the following targeting parameters:

You are targeting people between 18 and 65 years old in the United States who like Colbert, Colbert Report, or Daily Show.

I targeted all ages to get the widest audience, but these people had to have listed Colbert Report, Colbert, or the Daily Show in their profiles - a seemingly laser-targeted demographic.

How did Facebook Ads perform? Here are the stats:

  • impressions: 225,875
  • clicks: 178
  • CTR: 0.08 %
  • average CPC (cost per click): $0.22
  • average CPM: $0.17
  • total cost: $38.38

Here’s a Google spreadsheet showing you the complete stats for the 2 Facebook ads from Nov 7th to Jan 5th.

I set the max CPC between $0.11 and $0.31 and varied it at different times. Observing how max CPC affected impressions was very odd - it seemed to fluctuate wildly. I’d set it to 11 cents - it would get a ton of impressions, then drop to nothing. I would raise the bid just to jump start it again to get more impressions. It seemed like there was no consistency to when Facebook decided to run your ads and at what prices.

As you can see the CTR was abysmal. That is probably the most telling part.

For comparison I also setup Google Adwords for this site with the following ad

Adwords Ad

and bid on keywords related to the book. Here are the Adwords stats for Nov 6th to Nov 27th:

  • impressions: 15,386
  • clicks: 688
  • CTR: 4.47 %
  • total cost: $109.63

As you can see the numbers are quite different, (this was for a shorter period of time).

Now let’s take a look at the stats provided by Google analytics.

Visitors coming from Facebook:

  • pages per visit: 1.22
  • Bounce rate: 82.84%
  • average time on site: 13 sec
  • 3.92 % clicked to Amazon
  • 7.84 % clicked to Audible
  • total conversion rate (clicked on product links): 11.76 %

Visitors coming from Google:

  • pages per visit: 1.61
  • Bounce rate: 67.21%
  • average time on site: 42 sec
  • 12.31 % clicked to Amazon
  • 9.94 % clicked to Audible
  • total conversion rate (clicked on product links): 22.26 %

Do keep in mind that Google Adwords ads were run on “I Am America” book related keywords and not just “Colbert Show” related keywords, but that is at the crux of this whole thing. Google Adwords allows you to target specific intent at the time of a Google search. There’s no such thing with Facebook ads.

Comparing every single metric, Google Adwords visitors were far more engaged, far more valuable, and far better targeted. The traffic was cheaper and more consistent. The volume was far higher.

It’s not even close. Facebook Ads just don’t work.

And for all the hype that it’s gotten, it’s not even in the same ballpark as Google’s Adwords. Not even the same league. While targeting users by their listed interests may sound promising, it’s just not very effective.

P.S. For another example check out John Mendez’s Facebook test from a while back - similar results. There’s also shady who talks about how restrictive the ad process is. If you want to hear a real expert’s option, check out Danny Sullivan’s take on Facebook Ads (video) - he really knows what he’s talking about.

February 6, 2008 · Filed under facebook

Elizabeth said,

February 6, 2008 @ 3:06 pm

Wow. Thanks for posting this, I have long been curious if Facebook was all hype or not. A colleague of mine had very similar results to yours, but I wanted to see more than one example before drawing too many conclusions.

Darren said,

February 6, 2008 @ 3:15 pm

While everything is relative, I would hardly call this a failure! Your total conversion rate is 11.76% on Facebook. Depending on how much you are making per actual conversion Facebook might be a great place to advertise for this. If you made any margin at all, I’d call it a massively HUGE success. Low CTR is to be expected from a more passive ad, versus the direct response nature of PPC.

Facebook should not be viewed as a Google/PPC competitor, it should be viewed, if anything, more like a Google content network competitor. You are comparing two very different types of advertising.

You could do the same thing for comparing Google search vs Google content. Of course the content network will be lower CTR, but if it’s still ROI positive it’s far from a failure. It’s access to much more inventory than you can get from direct response (PPC).

Just my overall marketing thoughts. Thanks for sharing your experiment, this is the most data I’ve seen on full funnel analysis of facebook ads!!

Markus said,

February 6, 2008 @ 3:30 pm

Good point Darren. Facebook Ads is a lot more like Google’s content network. Overall I think targeting users based on their interests is not nearly as effective as many of us would have thought - which is the real take away from my testing. Especially considering how just months ago everyone thought it was the “new wave”.

There is no intent on social networks - which makes their traffic very difficult to monetize.

As a “branding” move, advertising on Facebook might be attractive to some advertisers. You get dirt cheap CPM and you might be able to subtly place a brand in the periphery of millions of eyeballs.

But for most advertisers it’s probably not even worth the effort. As soon as you put filters in there to target your specific demographics, your audience (& consequently volume) goes down.

Rae said,

February 6, 2008 @ 5:39 pm

Awesome post Markus… was really glad to see it.

As a total aside… a web designer ran an ad on Facebook that I caught in my feed… he has already done one site for me and will be starting another next week… I guarantee I’ll more than make up for his FB ad cost… right place right time eh? :)

Moe Smiley said,

February 6, 2008 @ 8:12 pm

Great Post…Facebook will probably have an easier time monetizing their site by spamming their members like Myspace

Re: Why Social Applications Will Thrive In A Recession » Digital Media, Rant, Web » Russell Heimlich said,

February 6, 2008 @ 9:46 pm

[…] Targeting ads based on what people are searching for is safe. Sneaking a recommendation into a users news feed hoping they will share it with their friends, not so much. […]

James said,

February 6, 2008 @ 10:37 pm

Interesting results, but I’m not sure you’re comparing apples with apples here. Google is a search engine and Facebook is a social network. The intent and engagement levels of the audience are completely different between the two sites.

In Google people are actively searching for information and products. I still wonder how many people realise Adwords are actually paid ads. In Facebook the ads are essentially a distraction/interruption. People are not looking for products, they are looking to connect with their friends. So low CTR is to be expected.

I’m not defending Facebook, as there is plenty of anecdotal evidence that their advertising performs poorly. But I think it’s a little unfair to compare it Adwords, which is a different form of advertising.

Markus said,

February 7, 2008 @ 10:11 am

Very true, James. I threw Adwords in there as a comparison to say that it’s much more worthy of your time.

If you take a look at the numbers for Facebook just by itself - forgetting Adwords - it still shows you how little volume/value you get out of it.

Danielle Wiley said,

February 7, 2008 @ 11:30 am

The other issue with Facebook is that users are seeing the ads multiple times. On Google, they search once and see the appropriate ad. On Facebook, we are noticing that users are seeing ads an average of ten times. The CTR for USERS is actually pretty good. The CTR for impressions? Not so much. This is especially the case with sponsored stories, where the same ad is shown on someone’s news feed all day long.

Are SocialAds Less Effective Then Search? - The Unofficial Facebook Blog said,

February 7, 2008 @ 1:02 pm

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cisco said,

February 7, 2008 @ 1:40 pm

This is a comparison between apples and oranges. If you’re going to compare Facebook and Google you might as well compare the facebook ads to google content network ads.

I haven’t read all the comments so maybe someone already pointed this out.

I definately agree that Adwords should be a much higher priority than Facebook.

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February 7, 2008 @ 1:58 pm

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Udi said,

February 7, 2008 @ 4:46 pm

Darren is absolutely right, FaceBook is much more like Google content but the important point is that such social networks have huge marketing potential.

Advertisers should learn how to develop relations with the social network members and engage them in interesting conversations about their brands. This way they’ll win brand ambassadors spreading their word in a low-cost and far reaching and most credible manner.

Paul Burani, Clicksharp Marketing said,

February 8, 2008 @ 8:25 am

I had a client with the same problem–CTR in the 0.05% ballpark.

You know how a lot of PPC experts will tell you that the content network is just not worth it, most of the time? I think the same reasoning applies here.

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March 1, 2008 @ 5:54 pm

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dan said,

March 5, 2008 @ 7:17 am

I found Facebooks Ads to not only perform horribly, but their customer service to be unhelpful and rude.

Neil Hancock said,

March 6, 2008 @ 10:29 am

I think comparing Facebook to Google AdWords using the specifications above is absolutely ridiculous, firstly you are trying to ‘sell’ a book or audio tape by only showing your adds to a demographic that have openly stated their admiration for the product, or the products author. Therefore a large majority have probably ALREADY purchased the book and therefore are not interested by your advert as it is ‘old news’

Secondly Google AdWords should have performed significantly better than it did in comparison to Facebook. Bearing in mind that Google is likely the starting point for someone who is looking to purchase the book NOT Facebook. I would have expected at least 1000 times the CTR, so the fact that it is nearer the 500 times mark shows the Facebook ads have actual been very successful for the experiment you have used, when taking into account the poorly targeted demographic used.

Facebook ads should be used to target users who are regularly purchasing your rivals products and advertise your range to them.

For example if you sold modern designer t-shirts, you could target your ads for people who state ‘River Island, USC, Ted Baker etc.’ as their favourite brands. You then KNOW they are interested in your ‘style’ of t-shirt and you can directly use your competitors to increase your brand and sales!!

Markus said,

March 6, 2008 @ 11:47 am

@Neil. Try your shirt experiment and see how many you sell. Setting up facebook ads is a waste of time for almost all but the largest advertisers who already have bulk ad deals with FB.

The volume you get, then clickthroughs, then actual sales < Time spent setting it up.

There are exceptions, but they are few and far between.

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berni said,

April 9, 2008 @ 9:22 pm

Interesting argument.. while i was reading the comments i was thinking exactly what neil after said: in facebook with those criteria you will fish people than wish to know more about the argument but its likely they are already up to date in that if they claim that in their profile.
I would conclude than facebook could be used profitably in those time-space niches so narrow that theres not enough volume of searches in google like the newest product or something that you wish to raise the need in who’s mostly looking for something else.

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