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Thanks to an audience consisting of more than 750m users, Facebook has grown into an online advertising powerhouse despite the fact that, for many advertisers, the efficacy of advertising on the site is still something of a question mark.

But even though major brands have flocked to the world's biggest social network, and the company's ads are now a billion-dollar business, a recent survey indicates that a very small percentage of advertisers is actually "fully on board" with Facebook ads.

According to online advertising management platform Marin Software, just 6% of UK advertisers report having "well developed" Facebook campaigns. Some 42% are "experimenting" and the majority (52%) haven't run a single campaign yet.

Although this might be surprising given Facebook's prominence, it is good news for the company, as it demonstrates that it has plenty of growth potential if it can find ways to acquire more advertisers.

On this front, the company is working to make it easier for larger advertisers to buy ads at scale, as evidenced by its recent public launch of the Ads API. Facebook is also testing new ad formats, such as Comment ads, which may be better suited to a social network.

None of these things, of course, will turn Facebook ads into, say, AdWords ads. Google's advantage is that its ads typically deliver a strong level of intent, something that Facebook will probably always deliver far less of with its ads. That, along with rising ad prices, may explain why many UK advertisers haven't jumped on the Facebook bandwagon yet.

And it means that when they do, they will arguably need to be strategic, approaching Facebook ads not as an AdWords cousin, but rather as a separate beast altogether.

After all, it's easy to boost CTRs on Facebook (just add beer), but for most businesses, trying to achieve AdWords-like conversions will require a significant amount of learning and experimentation.

Patricio Robles

Published 17 August, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2392 more posts from this author

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Anon

hahaha what do Marin know about Facbook Ads.... No one there has even ever run an Ad!

Take this with a large pinch of salt

about 5 years ago

Peter Gould

Peter Gould, Senior PPC Analyst at Epiphany

In my experience, Facebook still has a long way to go to compete with the likes of Adwords in terms of delivering sustainable, consistent ROIs from its Ad campaigns.

I run a lot of Facebook Ad campaigns for our clients that are already running paid search campaigns on Adwords, Yahoo, Bing and so on, and more often than not, the CPAs are far higher than we see elsewhere.

Although the Facebook platform cannot be compared directly to the likes of Adwords in terms of how users are targeted (search based on Adwords v demographic/contextually based on Facebook), clients still naturally want to want to see similar CPA levels. Unfortunately Facebook often comes out higher in my experience even with highly targeted and well structured campaigns.

(I should add that the type of campaigns I predominantly tend to run on Facebook send traffic back to a client's website and seek to convert that way, as opposed to within Facebook, with the aim of increasing page likes or page interactivity for example which is a whole different approach entirely)

about 5 years ago

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Charlotte Clark

I'm currently working on an advertising campaign to drive 'likes' on our Facebook page. It's interesting to see what works/doesn't work in terms of copy and images. Takes a lot of testing to see.

about 5 years ago

Simon Whittick

Simon Whittick, Marketing Manager at Marin Software

Hey Peter - Interesting thoughts and a similar message to what we hear from other advertisers and agencies in what is, as we demonstrate, an immature industry. So still a lot of learning's to be had for all of us ;-)

Clearly as you, Patricio, Facebook and many others point out Facebook is interruptive and so there is a need to treat it a little differently to search and view results differently. However, if you plug your Facebook results into your search results and understand the path-to-conversion you can start to see a more complete picture for Facebook Advertising. Most recent research has found the benefits of Facebook when looking at it on a first-click as oppose to last-click attribution model, and a recent GroupM/comScore study echoed this, showing that consumer's exposed to a brand's social media presence are 50% more likely to click on a paid search ad.

http://www.comscore.com/Press_Events/Press_Releases/2009/10/GroupM_Search_and_comScore_Release_Study_on_the_Interplay_Between_Search_Marketing_and_Social_Media

So in essence it works further up the funnel than search, but in combination.

As you also allude to, we've seen results generally improve for clients when the Facebook experience is maintained and clicks are driven to a Facebook page. Conversions can be seen as a Like or RSVP and opens up these consumers to be remarketed to with offers in their feed, and helps you start to understand what the value of a Like is. However, for some advertisers this isn't an option, but the evolution of Facebook Commerce could assist with this.

I could go on, and I'm sure you guys at Epiphany already know it, but a lot of what we're talking about and more is covered in our FB Best Practices for Search marketers whitepaper here:

http://www.marinsoftware.co.uk/resources/best-practices/search-marketers-guide-to-successful-facebook-ads

All in all, if you look at the growth projections for FB ad revenues from eMarketer there is a lot of potential in this space and I'm sure agencies like Epiphany will be at the forefront of that ;-)

Hi "Anon" - Hopefully these Facebook Advertising case studies from us will reassure you we are successfully supporting advertisers and agencies to run FB campaigns through our platform:

http://www.marinsoftware.com/customers/case-studies/beach-bunny-swimwear-clearsearch-media

http://www.marinsoftware.com/customers/case-studies/path-interactive-increases-facebook-click-through-rates-by-over-35

about 5 years ago

Peter Gould

Peter Gould, Senior PPC Analyst at Epiphany

Hi Simon,

Some great further insight there - thanks very much!

I think the whole first-click versus last-click discussion is certainly very relevant here too. My point made earlier really just reflects my experience as someone working in an agency where I have to report results back to clients, and naturally, they are very focussed on CPA. There is nothing wrong with that, as the end of the day, it's their money we're spending, and they want to know exactly what return it's offering.

However, I also think greater education about the path-to-conversion funnel is needed, and that's where we can and should come in, in conjunction with using tools such as Marin's to support this. Like you say, a user may click on a Facebook Ad and not convert, or may not even click at all, but are aware of the advert impression, but later on down the line, this may increase their chances of clicking on a paid search ad, organic listing, or visiting directly and converting.

A greater understanding of click attribution will certainly have a large part to play in the future if Facebook is to be seen as a viable platform for advertisers.

about 5 years ago

Simon Whittick

Simon Whittick, Marketing Manager at Marin Software

It's a pleasure Peter. I completely agree, viewing Facebook's influence in the context of your clients other online activity is the key here. Hopefully data from tools like ours will be able to help you prove the effectiveness of the good work you're doing with Facebook to your clients.

about 5 years ago

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Anon

Hi Simon,

I can assure you are not. I use your softwear for Facebook Ads management currently unfortunately.

(to be fair everyone who uses it for Google/Bing loves it)

about 5 years ago

Simon Whittick

Simon Whittick, Marketing Manager at Marin Software

Hey Anon - If you let us know your name and company name I'm sure we can help with any challenges, otherwise this conversation is fairly meaningless to everyone.

about 5 years ago

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Jonny Rosemont, Managing Director at Rosemont Communications Limited

In my experience brands can certainly see a return on investment from Facebook advertising but the strategy has to be right. Many companies see this as a direct competitor to PPC or display spend, directing people to your website in the hope they will buy stuff. In fact it should be seen as something a little different. People use Facebook to converse with friends but also directly with brands. You should consider using the allocated spend to direct people to your Facebook page, rather than direct to your website, and earn their trust by engaging in a dialogue with them. It’s a mindset change but once they’re a fan your communication can be a lot more powerful. After all you want your customers to come back time and time again don’t you?

about 5 years ago

Peter Gould

Peter Gould, Senior PPC Analyst at Epiphany

I certainly agree with you Jonny that your proposed strategy is an excellent way or trying to generate an harness long-term relationships with a potential new customer base.

The difficulty still for me lies with the measurability of such a strategy. For most brands, they will still want to know 'If we invest £x in this strategy, what revenue can we expect to generate from it?'. In my opinion, that's a very difficult question to answer at this stage. Like you say, many companies see this as a direct competitor to PPC or display spend, but how do you shift their mindset away from this if they're focussed on results at the end of the day?

I'd be intrigued to know how which metrics you use to measure the performance/success of such strategies? I can think of using unique offers, or tagging up all external links from your Facebook page back to your site to record conversions. Are there any others?

about 5 years ago

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