79 Comments »Fred Wilson has been updating the world about his venture in Facebook advertising over the past week. Today, Fred posted and updated screenshot of his ad campaign’s performance and it doesn’t appear to be too stellar. For one of his campaigns, out of 10,080 impressions there were only 8 clicks. The average cost-per-click for Fred was $0.08 and the average CPM was $0.06. This is a less than stellar performance. This is nothing new though.
Facebook has continuously produced less than stellar results for advertisers. With historically high CPMs and historically low click-thrus, Facebook is facing a challenge. Their new ad system has significantly reduced the CPM for those that opt for the cost-per-click (CPC) model. The only problem is that there are no clicks. While the targeting is phenomenal, Facebook users are more engaged by the content within the site rather than the advertisements. Perhaps Facebook is a little too engaging.
This is going to be a significant problem for Facebook over the next few months. With a valuation of $15 billion thanks to Microsoft’s investment, Facebook will have to start producing numbers that validates its astronomical valuation. The only solution I see for Facebook is to extend their advertising platform outside of Facebook as I previously suggested they would soon start to do. Aside from that, I’m not sure what else Facebook can do to improve the performance of their ads.
Have you had any good experiences with Facebook’s new ad system?
Facebook should add web search into their search capabilities and display related Facebook’s advertisers adds in there. Facebook’s users are so “engaged†to Facebook that I believe they would be more than happy to search the web inside Facebook instead of have to go other site. An for Facebook’s advertisers is a new opportunity to capture people’s attention.
Search adds is a great business model, just ask Google :o)
Facebook should add web search into their search capabilities and display related Facebook’s advertisers adds in there. Facebook’s users are so “engaged†to Facebook that I believe they would be more than happy to search the web inside Facebook instead of have to go other site. An for Facebook’s advertisers is a new opportunity to capture people’s attention.
Search adds is a great business model, just ask Google :o)
[...] allfacebook - the unofficial facebook blog « Is Facebook Advertising Effective? [...]
I would be interested in seeing the ad itself, as the ads I’ve run have converted much better than this. Perhaps it’s the layout/wording of his ad, or perhaps even the niche vs. the average Facebook user. More info would be handy for making an educated decision here.
Yes, I have had fine advertising success with Facebook, as I have already stated. If your max CPC is $0.10 because you are an affiliate market (i.e. web spammer), you will not generate any impressions (or clicks) because your bid is ridiculously low. It’s not rocket science people: set a realistic bid and you will get your clicks.
[...] Henry Blodget’s article yesterday raises some pretty interesting points about Facebook’s current financial state when coupled with the effectiveness of Facebook’s advertising model. [...]
I would be interested in seeing the ad itself, as the ads I’ve run have converted much better than this. Perhaps it’s the layout/wording of his ad, or perhaps even the niche vs. the average Facebook user. More info would be handy for making an educated decision here.
Yes, I have had fine advertising success with Facebook, as I have already stated. If your max CPC is $0.10 because you are an affiliate market (i.e. web spammer), you will not generate any impressions (or clicks) because your bid is ridiculously low. It’s not rocket science people: set a realistic bid and you will get your clicks.
[...] (source) [...]
>>>affiliate market (i.e. web spammer)
Wow, now there is an uneducated and assumptive statement. For the record, not all affiliates are spammers any more than all teenagers with their underwear showing on street corners are drug dealers.
>>>affiliate market (i.e. web spammer)
Wow, now there is an uneducated and assumptive statement. For the record, not all affiliates are spammers any more than all teenagers with their underwear showing on street corners are drug dealers.
[...] Is Facebook Advertising Effective? - The Unofficial Facebook Blog (tags: facebook ads effect) Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages. [...]
Why “Facebook will have to start producing numbers that validates its astronomical valuation”?
They don’t need money. We don’t have their share. Users need good experience. Best strategy for FaceBook is forgetting about money, continue to provide better user experience, killing all other social network (including funny Google social)and dominate the world. Then the money will come.
FB seems very smart not so hastily to monetize.
Your article is right on. Social Networks focus the user on the content. Usually the advertising gets in the way, and users are more interested in the content and don’t click on ads, so the CTR and eCPMs are poor. Facebook is trying to make the ads as attractive as the content.
As to Facebook’s valuation, I made a few rough calculations: http://fishtrain.com/2007/11/07/facebook-valuat...
I’ve gotten 100 “fans” on my fan page, so I’d say it’s effective for brand enhancement, at the least.
http://www.facebook.com/profile.php?id=84318701...
Why “Facebook will have to start producing numbers that validates its astronomical valuation”?
They don’t need money. We don’t have their share. Users need good experience. Best strategy for FaceBook is forgetting about money, continue to provide better user experience, killing all other social network (including funny Google social)and dominate the world. Then the money will come.
FB seems very smart not so hastily to monetize.
Your article is right on. Social Networks focus the user on the content. Usually the advertising gets in the way, and users are more interested in the content and don’t click on ads, so the CTR and eCPMs are poor. Facebook is trying to make the ads as attractive as the content.
As to Facebook’s valuation, I made a few rough calculations: http://fishtrain.com/2007/11/07/facebook-valuation/
I’ve gotten 100 “fans” on my fan page, so I’d say it’s effective for brand enhancement, at the least.
http://www.facebook.com/profile.php?id=8431870131&ref=mf
Chris Kennedy - it’s not as simple at that. Obviously, if you don’t bid to get impressions you won’t get clicks. But Fred (and me) get the impressions, just no clicks to speak of. I’ve had a campaign running for a couple of weeks. It is wildly variable in how many impressions it gets, but I’ve only had eight clicks out of a a huge number of impressions. Utter rubbish. I guess it then boils down to the advert content - what do you advertise that works and what sort of rate do you get?
Chris Kennedy - it’s not as simple at that. Obviously, if you don’t bid to get impressions you won’t get clicks. But Fred (and me) get the impressions, just no clicks to speak of. I’ve had a campaign running for a couple of weeks. It is wildly variable in how many impressions it gets, but I’ve only had eight clicks out of a a huge number of impressions. Utter rubbish. I guess it then boils down to the advert content - what do you advertise that works and what sort of rate do you get?
[...] Is Facebook Advertising Effective? - The Unofficial Facebook Blog (tags: facebook advertising) [...]
There are people out there that wonder why a VC doesn’t get higher click-through-rates?! Omg, you should get out again with friends that are NOT entrepreneurs. There are millions of them out there. And they don’t give a shit about a Union Square Ventures-ad on Facebook!
There are people out there that wonder why a VC doesn’t get higher click-through-rates?! Omg, you should get out again with friends that are NOT entrepreneurs. There are millions of them out there. And they don’t give a shit about a Union Square Ventures-ad on Facebook!
As I wrote in my post way back in August (in Facebook time, that’s like a year) - I predicted that demographic & 3rd party site advertising would be the only way to really justify the valuation.
http://www.vinnylingham.com/why-is-facebook-wor...
As I wrote in my post way back in August (in Facebook time, that’s like a year) - I predicted that demographic & 3rd party site advertising would be the only way to really justify the valuation.
http://www.vinnylingham.com/why-is-facebook-worth-10bn.html
Chris Kennedy , you are missing the point.
People are getting impressions with low CPCs. but they are getting very low click through rate.
8 clicks / 10,080 impressions = 0.08% click through rate.
that’s pathetic. and how many of these 8 clicks actually get converted?
Chris Kennedy , you are missing the point.
People are getting impressions with low CPCs. but they are getting very low click through rate.
8 clicks / 10,080 impressions = 0.08% click through rate.
that’s pathetic. and how many of these 8 clicks actually get converted?
It’s about where users want to be - within Facebook. I’m curious as to what the numbers would be if you were advertising a FB Page or App with FB advertising options rather than something off-site. I think this is where the rub lies.
It’s about where users want to be - within Facebook. I’m curious as to what the numbers would be if you were advertising a FB Page or App with FB advertising options rather than something off-site. I think this is where the rub lies.
[...] ads we put up last week aren’t performing well yet. But I still think they can make sense. Nick at AllFacebook.com isn’t so [...]
[...] Is Facebook Advertising Effective [...]
Click-through rate hardly matters with CPC advertising on a site where users spend an average of 30 minutes a day and 50% login in daily. That is a ridiculous number of impressions per user and understandably will generate low click-through rates when there is no user intent driving the ad placement, but when you can get a million uber targeted impressions in a day, 800 clicks is pretty solid. Add in the new social referral system available through beacons and CTRs will no doubt improve.
Facebook is a social web application, not a search engine, so you need to accept low CTRs in exchange for insane targeting to users who have expressed no intent, and a correspondingly huge number of impressions. If you’re so worried about CTR just do search advertising and get exactly the users who have self-selected an interest.
Click-through rate hardly matters with CPC advertising on a site where users spend an average of 30 minutes a day and 50% login in daily. That is a ridiculous number of impressions per user and understandably will generate low click-through rates when there is no user intent driving the ad placement, but when you can get a million uber targeted impressions in a day, 800 clicks is pretty solid. Add in the new social referral system available through beacons and CTRs will no doubt improve.
Facebook is a social web application, not a search engine, so you need to accept low CTRs in exchange for insane targeting to users who have expressed no intent, and a correspondingly huge number of impressions. If you’re so worried about CTR just do search advertising and get exactly the users who have self-selected an interest.
[...] that Fred Wilson has been experimenting with Facebook advertising and having limited success. In this one example they provided they had 8 click throughs for a bundle of 1000 ad inventory. I still have had my dashboard properly populated by Facebook for my $20 [...]
[...] at allfacebook.com raises some interesting issues about the poor click-through rates for Facebook’s new advertising system. I subscribe to [...]
[...] because Facebook provides real value to users doesn’t mean that value is easily monetized (through advertising, for example). Maybe Jason Calacanis was right when he said, “Social networking is second [...]
[...] While the users who are left will clearly be “happier”, and a better representation of users who want to actually share their purchases, and therefore, hopefully a better “quality” of traffic that ultimately converts for these advertisers as the percentage of people clicking on any ads in the past has been utterly abysmal. [...]
It’s not true that a maximum bid of .10 on CPC will result in no impressions. That was my maximum bid and I had 1000 impressions within 24 hours. I do agree though that the click through rate is not great but at least I’m not paying for the impressions (which is an option).
It’s not true that a maximum bid of .10 on CPC will result in no impressions. That was my maximum bid and I had 1000 impressions within 24 hours. I do agree though that the click through rate is not great but at least I’m not paying for the impressions (which is an option).
[...] have been various people talking about the value of advertising on Facebook.com recently. Most coming to the conclusion that putting an ad up on [...]
Facebook advertising, or most of web advertisement will never be trully effective for the ‘users’ who have even a tiny bit of knowledge about PC’s. For example right now, I don’t even see any add’s when browsing digg.com or facebook.com - I simply block them automatically with Firefox adblock.
Facebook advertising, or most of web advertisement will never be trully effective for the ‘users’ who have even a tiny bit of knowledge about PC’s. For example right now, I don’t even see any add’s when browsing digg.com or facebook.com - I simply block them automatically with Firefox adblock.
we advertise on facebook - not good 16000 impression and only 5 clicks - how sad is that?
we advertise on facebook - not good 16000 impression and only 5 clicks - how sad is that?
I was considering advertising on Facebook, but things seem kind of grim after reading this article. Are there any good sites for advertising your websites?
I was considering advertising on Facebook, but things seem kind of grim after reading this article. Are there any good sites for advertising your websites?
I think they are not 100% ready as an advertising platform
I think they are not 100% ready as an advertising platform
I actually think facebook can be great for advertising depending on your niche. It makes perfect sense that there is a low ctr, people go one facebook to see their friends not to click ads, whereas google people are looking for products, etc. Additionally, facebook has such a wide audience that you can keep your bids relatively low and still get clicks. If i used adwords I would be spending 10 dollars a day for maybe 2 or 3 quality clicks for the keyword credit card, with facebook for $10 I get 20-25 visitors a day. its a different market but can definitley work if you are advertisig a niche for college students!
I actually think facebook can be great for advertising depending on your niche. It makes perfect sense that there is a low ctr, people go one facebook to see their friends not to click ads, whereas google people are looking for products, etc. Additionally, facebook has such a wide audience that you can keep your bids relatively low and still get clicks. If i used adwords I would be spending 10 dollars a day for maybe 2 or 3 quality clicks for the keyword credit card, with facebook for $10 I get 20-25 visitors a day. its a different market but can definitley work if you are advertisig a niche for college students!
I was considering advertising on Facebook too, but I do not think i can concentrate on a targeted audience… I may be wrong!
I was considering advertising on Facebook too, but I do not think i can concentrate on a targeted audience… I may be wrong!
Your blog is very informative. However, it is pretty hard task but your
post and experienced serve and teach me how to handle and make it more
simple and manageable.
Thanks for the tips… Best regards.
I've been experimenting with Facebook's ad system but I'm not that pleased so far. 286k impressions resulting in 206 clicks and only one sale. That's just horrible. This cost me about $100 and resulted in an $11 sale…not a great return by any stretch…so my question is where do the clicks come from and even with negative qualifiers I still get curious clicks…that sucks.
Mate,
you say stellar too much
I am advertising my webdesign business on facebook and have had a very poor result. Low click through rates is only part of it. Not a single visitor to my companies facebook page has taken the next step and visited my website. Granted we have our portfolio, service lists and pricing and contact info all on the facebook page but still we have had 0 inquiries with over 200 dollars spent.
From Oct 2 -Oct 9 we have had 578,016 impressions resulting in 376 clicks resulting in 0 inquiries. The ad content itself is the same as I use on any other ad network and generally shows me excellent results.
Does this mean Facebook is of no value to advertisers? I don't think so. I think advertisers need to approach the facebook market differently. And I think that not all products can be successfully marketed on facebook.
Im not sure if I should use fb ads after reading all these comments
Yes, we were looking at advertising on facebook as our product is aimed at young computer users.
But the feedback on this blog does not make for good reading !
Of course if they ads don’t work, people wont keep advertising, and Facebook wont be able to keep the service running ! ?
Another issue is the prevelance of google scam adverts. A large proportion of the advertisers are of low quality. The ideal thing would be for them to offer google ads, but that’s never going to happen.
I advertised for a very short time on FaceBook - what a rip-off!
OK - I set a low CPC rate and a low daily budget - for a trial of the system. That trial showed that I got a lot of click-throughs, but no buyers.
My guess is that someone clicking on an ad for beauty products will be interested in the products, and 1 in 20 or so would buy. Not one buyer.
If I use Google ads I can judge much better how many buyers I’ll get for a set number of clicks. I dislkie the fact Google have sold out to the corporate dollar and the way they play with their ads system - but they do get some good results.
Bye bye Facebook.
I just tried a campaign that was specific to Spring Breakers. My ad listed the type of information I have on the site, so I would only get relevant users. Out of 100 clicks, I only got one person that clicked on an Adsense advertisement and none that bought product (or barely click on them). I am new to this, so it could be my page right now. Buy I am getting a 86% bounce rate from Facebook referral and 50% from organic searches. It’s worth signing up for the Visa Business Network and get the $100 Facebook credits. At least you can try it out yourself. Maybe your stuff will work. Also, the number of clicks on Facebook is not matching up to the number of visitors on Google Analytics. Need to find out why
I just started advertising with FB, I’ll just wait and see for the next following days.
Well I guess Facebook isn’t really a place where people click on ads or product information…
I have been looking at FB ads. Someone told me that they are getting a lot of hits from it. I think I might try it out.
The analysis in this article is seriously flawed. How can anyone complain about an eight cent CPC, when you’re only paying for clicks? Or a $0.06 CPM? Think about it for a minute, you’re getting tens of thousands of impressions at incredibly low prices. If you’re interested in an alternative point of view, please read this analysis of Facebook’s effectiveness, I think you will be surprised to see that the naysayers are wrong. And no, I’m not a Facebook employee, just a marketing analyst in pursuit of increased ROI.
http://roifactory.com/index.php?option=com_content&view=article&id=22:facebook-advertising-analysis-part-two&catid=3:thedogfoodchronicles
In terms of branding - if you’re getting your name and logo and ad in front of thounds of people for pennies on the dollar per thousand - you have a winner. Branding works great for my company, and we’re targeting females 45-64 in zip codes that impact us, and pushing PR and releases that are relevant to the ads.
I ma very satisfied that our name and brand are out there, and hope it will drive top-of-mind thoughst when making a purchase decision.
I’m the pastor of a small congregation that’s trying to drive more traffic to our site.
My primary concern is the disparity between Google Analytic registered traffic and what the FB Dashboard is telling me. Analytics is saying I’m getting no FB traffic at all. Zero. I’ve had some from events and church members pitching us on FB in past…but nothing from our ads. Yet I’m reaching my click limit daily according to FB. Hmmm.
wow, $15 billion that Microsoft gave to Facebook is lots of money. I wonder how much programmeres there got.
Anyway, I don’t find Facebook ads are very effective, I got like 60 clicks per day for my ads, and I don’t see an increase in number of users to my site (www.mCards.com.au) or app (http://apps.facebook.com/ausmcards).
I’m still trying different ways to put ads on Facebook, hopefully it will work out.
Lots of impressions, zero clicks. This vehicle is like presenting a seadoo for highway driving. It doesn’t work, I’ve tried different speels, products, if someone says otherwise the must be a FB surrogate.
I have to say that this doesnt really surprise me. Facebook isnt really a place where people go to look to buy stuff, but to hook up with their mates.
I am pretty disappointed, to say the least. This seems more like cheating. I received 58 clicks from Facebook. Of these only 20 are registered on Google analytics as people visiting from Facebook. And the reason is not difficult to find, the cPanel log shows that most of the facebook refrals are not even loading even a single file from my site and many just a few and not the complete page.
Below is a copy paste from my log
———————–
Http Code: 200 Date: Jul 10 02:50:47 Http Version: HTTP/1.1 Size in Bytes: 4431
Referer: http://apps.facebook.com/petsociety/?pf_ref=sb
Agent: Mozilla/4.0 (compatible; MSIE 7.0; AOL 9.0; Windows NT 6.0; FunWebProducts; SLCC1; .NET CLR 2.0.50727; Media Center PC 5.0; .NET CLR 3.0.04506)
———————–
Such a thing has never happened with google adsense, so I went and tried to disable the account, but did not happen due to this error “There was a problem processing your request. Please try again. Error code: 0.” So the first thing to do is disable and get out of this fraud thing.
To the database designer:
Please change the data-type of your comment field in your database to allow for unicode data. You probably have set the datatype to varchar(250) or something like that, whereas it should be nvarchar(xxx) to cater for unicode - hence the reason for the Facebook’s instead of Facebook (apostrophe) s that was intended.
Remember to double the size of xxx so that varchar(xxx) becomes nvarchar(xxx*2) to cater for the right amount of space.
I blame it on the mode of the user. I will never go onto facebook to find a place to buy clothes. I’ll just never to that. If i click a ad it will be because I’m out of things to do on the site and is bored. Then I’ll might put some notice to the ads.
When i search in a searchengine or some site like that, I’m in a completly other mode. I’ve decided to get something and I’m looking for where to get it.
I found our Facebook ads worked, we got sales, and were paying 10 or 15 cents per click.
But then it seemed that a lot more “big” companies joined Facebook and started putting up their bids so that we had to bid more like 50 cents a click.
This is just ridiculous to pay 50 cents just for a click, let a lone a sale. We all know you need lots of clicks to get a sale (ROI).
So I have put my campaigns on hold, till I can get hits at 10 cents. Its in your court Facebook if you want our money.
Facebook is a networking site, not an “advertising” site. We build groups… interested users search to find what they’re looking for.
The ads would be better utilized only in search results, otherwise they become cumbersome and annoying and defeats the entire purpose of networking.
I hope Facebook is effective enough
I’m going to add the visa business application and get the $100 in free Facebook ads. Hope it works, but free advertising is still free :)))
if you are looking for something specific then Google PPC is the best tool to use e.g. I want double glazed wooden windows. This type of search that compares to the way you’d look for products and services in the yellow pages is ideal for Google. If you are advertising a product/service that people are not looking for but a particular demographic helps you to identify your market then FB is a GREAT place to do that. 70% of small loans are taken out by men between the ages of 28 and 40. go onto FB, target men 28 to 40 and you’ll see the value of FB. you need to choose your means of publicity wisely to get the best ROI. Start low and build up your FB bid and monitor your results. It’s not just about CPM CPC and bids but demographic and knowing what’s right for FB. Create information pages within FB so that the clicks don’t leave FB immediately to help ROI.
I’ve not had any business from the Facebook ads yet, however, I am happy to have 75 clicks for the cost of $35.00. We are focusing on our Dental Marketing products like On Hold Messages, etc. I realize many advertisers “expect” a high number of clicks if the impressions are high and I can tell you from over 20 years in the radio business that’s not how it works. Many advertisers on the radio will advertise on a morning show that they know has a million listeners at a particular time of the morning. Immediately they do the math “a million hear it so if I get just .001%, etc. ” And then of course an expectation is created that is not valid. On any given day “everything changes” so in our case 75 clicks with no sales can just as easily become 75 clicks with 3 sales. It depends on who sees the ad and if it fills a need that they have right now. Also, if a moderate number of clicks are coming through and I am getting no sales I need to have a look at the landing page. Am I talking about myself and/or the product? Or am I filling the need of the person who clicked and giving them an easy way to purchase? If you need any assistance visit hoffmanimaging.com and leave a message on the product quote page. I’ll let you know when the first sale comes!
I forgot to mention that the fact that we can target specifically to people who are in the dental field is amazing on Facebook.