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…
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
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.
{ 48 comments… read them below or add one }
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.
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!!
Great Analysis, but I have to agree – a failure??? Not sure I understand…even though your ‘clickrate’ was below average, you generated 178 interested consumers leading to your site…at $7.49 per book, that’s a sales potential of over $1300…for a $38 investment??? You also generated over 225,000 impressions…hardly ‘invaluable’. Its not surprising the Google ads outperformed though, as Google is a directory, essentially replacing the outdated yellowpages – people searching for a specific book found your ads, so its obvious there would be interest there.
The simple thing has always remained in the world of advertising – if you want people to find you, get in front of them. I would bet the farm that if you combined your Facebook/Google programs with more general display programs (Google content, major newspaper sites, etc), you would see your Google results climb further.
There is a reason Facebook ads are cheap, as you get what you pay for, but in your case I would argue it was money well spent!
@Darren
I completely agree with you. Facebook is a direct competito of the Google Display Network, not the search network. Comparing Facebook advertising to the Google Search Network is like comparing apples and oranges.
I’m kind of surprised that someone who claims to be a search marketer doesn’t get the huge fundamental difference.
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.
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? :)
Great Post…Facebook will probably have an easier time monetizing their site by spamming their members like Myspace
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.
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.
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.
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.
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.
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.
I found Facebooks Ads to not only perform horribly, but their customer service to be unhelpful and rude.
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!!
@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.
Markus,
Your assumptions about Facebook advertising seem rather weak. You’re comparing one product and trying to convey the message that it’s a waste a time for all. Not sure how long you’ve been in the industry, but you seem to lack the understanding that all advertisers and their products are not created equal.
Also, I personally use the Google Display Network and Facebook to extend a campaign reach, when my search campaigns are tapped out. For larger campaigns, this is a great way to capture more conversions and visits, with minimal investment.
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.
IMO – It’s amazing how facebook miss the point. They could be the best advertise platform ever
If you are comparing display ads with search, there will never be an accurate comparison. For someone to know they want to search for the keywords that you have purchased for your campaign, they have to know to search for them. You accomplish this spark of interest through good PR, display advertising (like you see on Facebook), etc. I’m actually a little impressed that the display advertising there was as successful as it was.
Facebook ads and beacon are still young and still need a lot of work. I don’t think it’s fair to quickly jump to a conclusion that facebook ads just don’t work.
I’ve also ran an ad on facebook to see how it works and compare it with google adwords. I wrote about the results and conversion rate here on my blog.
http://www.oneuseraday.com/2008/05/facebook-social-ads-vs-google-adwords/
Google adwords wasn’t an overnight success. Anything disruptive like this will take a while to take effect and when it does, it will be good for everyone. In the mean time we just have to continue to give facebook our feedbacks like this and hope that they listen.
Thanks for your feedback. As a branding move or for large advertiser partnerships Facebook may be ok, but even your test shows how bad conversion really is on their ad network – hardly the makings of a “distruptive force” that they claimed to be.
Very interesting post & comments. I think I’m inclined to agree with Darren near the top – keyword ads and FB ads are quite different beasts – the real question is, was there a positive ROI on the experiment?
@Jonathan: no, I haven’t found anything on Facebook that had a positive ROI yet. I’m sure if you have a very specialized market or service you’re promoting for yourself (and you only need to land the right person or client) you might see positive ROI, but other than that, no.
The reason is quite logical: the kind of people who use Facebook.
Excellent post. Thanks for the info! Not sure which of your AU crew posted this (maybe you should ad bylines to your postings!), but thanks for taking time to do so, plus the helpful links to other research.
Hi, I can acept the fact that facebook ads just dont work after you only tested one capaign and one product. I tested it this week for the first time and I have had some impressive results for a service business.
My ctr was very low but I think that should be expected on this type of platform where the users are not really searching for anything and there focus is communicating with there friends.
Anyway, I spent about $20 and landed 2 driveway sealcoating jobs for a client (worth around $500). I continue to get a decent amount of hits from facebook and a very good number of impressions (good for branding and you dont have to pay for impressions) so I think it might depend on what your advertising.
This is a local business so I targeted locally and for the correct age group. Could be a fluke but I recommend further testing. All the negative talk I have heard about facebook ads comes from someone testing 1 product and comparing it to google adwords. (lets face it, google will always be the best source to display your ad at the perfect time someone is looking for your product. But I think facebook can turn a profit if used correctly.
I enjoyed your article, however I also would say that your Facebook ads were all but a waste of time. To be fair, I don’t think the comparison was equal.
I sold key account advertising for the world’s largest publisher of classified advertising for 4 years. If I ever saw an ad with a CTR of over .01% I was impressed. Facebooks .08% tells me that this was a succesful ad.
If you look at the cost between your two campaigns, I’m also happy with Facebooks results. Depending upon your goals with an ad, impressions can be almost as valuable to click throughs. This is especially true in branding practices.
Cheers for the article,
Jason
Well said. I have had similar results with facebook ads. It’s great to see the results quantified so nicely.
If you want to do facebook, you can’t do with a google adwords approach. You need to use facebook ads to engage users. Get them as fans of your business or product. Once they are engaged, then you can send them periodic messages, or make posts to engage them further, and build trust.
This can help you build top of mind awareness in the facebook followers that you have.
Thanks,
Vi
well said, Vi
So if I did the math correctly you are receiving a $.15 CPC average? This is Google your advertising right? Just to start the dance, keywords in my experience require a CPC of $1.00. Also, if you are selling something more complex than a book or teeth whitening or whatever cheap ubiquitous product that click results in a waste of a dollar because people do not purchase something more than $10 or $20 from a one click through to a website.
I think it whether one form of advertising works or not depends entirely on the product you are selling. Like Vi mentioned facebook can help build your brand. If you set up a fan page on facebook you develop a following and the “stickiness” is very high. Whereas with an average Google click, the chance that you will have contact with that customer is very low. Additionally, their friends see their interactions with your page and they may also follow–working like word of mouth.
I wouldn’t blanket statement and say the facebook ads “don’t work”. They don’t work for the product you are selling. Adwords obviously work better for what you are doing. It’s just like traditional media of print, radio, and TV. All can be successful depending on what your product.
Doh, I broke the cardinal your and you’re grammar rule. Should proof before and not after I hit submit.
If you don’t try, you’ll never know. It depends on the message. And a bit of luck! ;)
I gave up on Google adwords about a year ago. I got plenty of traffic, but less than 1% conversion. My Amazon page, however, had over a 50% conversion- which had me wondering why?? Needless to say, I’m extremely suspiscious of google since there is no way to check them.
I started the facebook ads about two months ago and, while my ctr is low, my conversion is very high. So, while it has been a while since this blog and things may have changed, I think fb ads are definately worthwhile.
Cheryl – I too have had good results with Facebook. In fact with a limited budget I was able to get $0.25 per click on FB and hundreds clicks. As for Adwords I was paying $6 per click just to get on the first page, I’m not a amature with Adwords ether, I know all the tricks, just was not working for as well a FB. This blog was posted over 2 years ago, it would be nice to see the bloggers comments on what they have seen change in the past 2 years .
Firstly this can’t be compared as like for like advertising. People using Facebook are on the site to socialise, and as an advertiser we hope, as we do in press and outdoor that we can grab their interest at a time of the day when they are most receptive to our advert and in the right frame of mind. People using Google already know what they are looking for, most of the time! So on one hand you have a captive audience actively searching for a product, and then there is the passive Facebook audience. So naturally the CTR and ROI on Facebook is not going to be as good. As targeted display advertising goes, Facebook actually performs really well statistically. The average CTR (take with a pinch of salt) is about 0.02% for display in the UK. FB’s algorithm and targeting criteria does have its holes, but for what you pay on Facebook, far out weighs the negatives and I would always consider FB adverts, given the massive audience reach (400 million active members world wide). So good effort with your experiment but I don’t think it’s a fair or accurate comparison.
check the traffic, from where!! and my suggestion is, if you want make money from FB advertise your affiliation programs, or Dating site programs,
don’t advertise your product,or sell e-book in FB, if you ask why ? my answer would be that is a SECRET !!! lol :-)
Facebook is best used to compliment a google Adwords campaign. Facebook for brand awareness and exposure to hundreds of thousands of people, and Google adwords to capture them when they actively want what you are selling. Those expecting facebook ads to be on the same level as adwords are obviously going to be dissapointed.
Its the difference between being a cold calling salesman who is interupting a social event, compared to being a sought after consultant that has customers walking into his office.
You didn’t mention how much money you made though, including how many people purchased books (not just clicked) and how much you made off of sales.
Also, you spent a lot more with AdSense, did that investment work better?
As I recall there were very few sales so the entire campaign didn’t really make anything
Thanks for posting this article. I have experienced similar result in my industry (tutroing services) and wasn’t sure what to think. I tested multiple campaigns on Adwords and Facebook and am glad I track results using analytics. My adwords bounce rate is 30-50% depending on the ad campaign and visitors average 1-2 minutes on my site. With Facebook my bounce rate is above 90% and the average visitor spends about 15 seconds on my site. My CPC with adwords is half the cost of Facebook. I expected adwords to generate more qualified traffic then Facebook. What I can’t understand is why Facebook charges almost twice as much for less qualified traffic. The Google content network has also provided more qualified traffic. My advice is to use Google analytics to track results. If I didn’t use analytics I would have never discovered that adwords works best in my industry.
After spending months of wanting to believe that facebook ads were working, I just can’t work with their model anymore. 2 days worth of google advertising just blew away what I got out of facebook advertising in 1 month!
The difference I’ve found is that when people go to google they are explicitly looking for content within a specific domain. Facebook on the other hand has users online for a myriad of reasons. I’m betting that unless you’re hyper hyper hyper specific about your facebook users, you’re just not going to get that much conversion.
For the time being: Google 1. Facebook 0.
ROI is everything which this article did not address. I used a very simple equation and used a constant of 10 dollars per unit and a 10% conversion rate from the number above for both Facebook and Google. For example 178 Clicks at 10% conversion is 17.8. I rounded to 18 and times that by 10 to get 180.00 dollars for a total of sale. For Google I did 688 time at 10% which is 68.8 and rounded that to 69 which times that by 10 to get total dollars. Using the ROI formula plugged these numbers in and it comes out to 3.6% ROI for Facebook and 5.11% for Google. 2% difference is hardly a failure and definitely not negative. So not sure how the commenter is getting a negative ROI.
I also found that facebook adds are not very effective. I havnt tried Google adds yet, but after reading this article I am hopeful.
The real value in facebook ads is clearly that each person who likes your facebook page that you’ve tied your ad to is now a part of what amounts to an email list that people check obsessively. People are on facebook all day and if they’ve liked your page they are subscribed to you.
You can then email all those people. So, especially if your selling some higher priced products, you can get ultra targeted leads for incredibly low prices.
Everything has it’s uses at the correct time, it’s all about figuring out where and when the tool is useful.
I can confirm. I have a bounce rate of 82 from visitors via FB, and 58,9 bounce rate from visitors via natural searches. Thanks for this article. It is confirming my ideas.
I’ve tried google adwords but being a small business I cannot get my ads to show. The reason google adwords states (when you view the eligible button) is because my budget doesn’t allow it. So I go to raise my budget and google recommends that my budget is just right?? I find it really difficult to get my ads to show on google but on bing no problems and the CTR and conversion rates are better on bing. I have been skeptical about using Facebook ads but google adwords are just costing me money with no sales. Bing costs me money but with sales. I will be sticking with Bing but may just switch to facebook ads as a trial.
Are Facebook and Google ads pretty similar in price CPC? I always just assumed Facebook ads would be cheaper than Google Adwords. Overall it seems that Google adwords is the majority vote, but is it much more expensive?
{ 14 trackbacks }