How on earth is Facebook going to make billions of dollars? That’s the question that many Facebook skeptics have and it’s one of the reasons behind Facebook’s current valuation of $3 billion. The company has been focused on breaking even since early on and now years later they are still operating near a break-even point even though many are questioning the impact of the company’s growing server costs.
Sheryl Sandberg, Facebook’s Chief Operating Officer, recently told Bloomberg in response to a question about fundraising, “We could not be doing better financially. We absolutely do not need to take money. We might take money — but it doesn’t mean we need to.” That’s great to hear Sheryl but that doesn’t mean you should turn away substantial revenue opportunities.
Facebook Needs An Ad System Upgrade
After spending no less than $1,000 on Facebook I’m getting frustrated with the system. The company tells me to use Facebook ads to promote my public profile but they won’t give me any metrics about how well my advertisements are converting. If Facebook provided ad to new fan conversion metrics, I could improve my expenditure on Facebook and not just toss money down the toilet, not knowing which ads are working and which aren’t.
For those companies that are looking for advice on Facebook advertising, I have to give them complex answers about optimizing their campaigns. Should a company promote their public profile, or should they just redirect users to a landing page on their existing site? While Facebook has a solid basis for arguing for promoting public profiles (Facebook users are more likely to convert into new fans), there’s no quantitative data for advertisers.
Google Was Built On Metrics
Google had a large number of companies built off of their ad platform. Whether it was the affiliate marketers (which are beginning to turn to Facebook), the companies looking for arbitrage opportunities, or the large ad buyers, all of the companies had the ability to track their ads. It should be noted that the vast majority of Google’s advertisements drive people to external sites, not to Google.
Facebook however has advertisers that are purchasing ads that also boost Facebook’s page impressions. Yes, I’m paying money to help Facebook generate more impressions! The least the company could do is provide advertisers some sort of method for tracking conversions. Right now there’s no way to track most of the actions that take place on Facebook and hence Facebook advertising can quickly become a black hole.
Facebook’s Ad Manager Interface Needs Improvements
Want to build a business helping others manage their Facebook advertising? Good luck! I have around 30 campaigns on Facebook and just those are unmanageable. I’ve recently reduced my ad spend because I couldn’t track conversions and the process of reducing my spending was cumbersome. Google has at least figured out how to provide customers with checkboxes to adjust multiple campaigns at once.
Needles to say, there are some changes that need to be made with Facebook’s ad manager and I’m sure that I’m not the first to makes suggestions. No, Facebook’s advertising system is not the end of the world and honestly, I’ve gained a lot of value from using it. Honestly though, the company should be able to make minor adjustments to improve the general user experience.
In the same time that the company has changed the web site layout three times, the ad manager design has bareley changed.
Why Leave Money On The Table?
Facebook doesn’t need to make changes to their ad manager but when your customer base is small businesses that are trying to get new clients, why wouldn’t you assist them in saving every dollar they can. By providing more effective metrics, especially within public profiles, Facebook could generate substantially more revenue. A slight improvement of the ad manager would also make many of our lives a lot better.
While the company may not “need to take money”, it wouldn’t hurt the company to work a little at improving the experience for those that are willing to hand it over to them.
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GREAT ARTICLE!!! THANK YOU
You make some good point about facebook's crappy advertising manager and the lack of conversion counter suite. I have one point to add to what you have bought up.
Facebook is very inconsistent as to what they will allow the user to promote. Let me give you an example; they have denied all of my ads, saying that i am an MLM, and they don't tolerate that (i am not in MLM , I am a marketer, there is no DOWN or UP line in my company). but looking at the ads that i am served with, i see people (in the same business as me) advertise freely.
to ad insult to injury, they will not give me a reason apart from the stock "you ad didn't meet our guidelines…" and good luck finding a human to talk to..
its a shame realy, i spend thousends of dollars with google every week, Facebook could have had part of the action, but they would rather remain righteous then in business.
Keep up the great articles, I have bookmarked you.
you can find me on http://workwiththesecret.blogspot.com/ or facebook Damian Middleton (Australia)
MAKE IT A GREAT DAY MATE!
Comment by Damian — May 5, 2009 @ 5:17 am
Great thoughts! Their ad interface can definitely use some updating. We've been trying to get better conversion metrics by integrating google analytics into the ads. Once you spend over $10k, you get close help from FB's ad team anyway further taking away from the ad manager's usefulness.
I don't think advertising is the way for Facebook to make bags of cash. A universal micropayment system could be huge for them- especially if they integrated with college currencies.
Comment by Facebook User — May 5, 2009 @ 5:43 am
Facebook ad team sucks, we had a large campaign going and the idiots running the ad team honestly don't have a clue about customer service or retention. Work is required on all fronts!
Comment by Jackie — May 5, 2009 @ 5:54 am
I don't currently have any ads running on Facebook and after reading this I probably will stay away for the time being. I don't like how Facebook ads do not drive traffic to external sites, that is very wrong in my opinion. Looks like right now Google Adwords is the way to go.
Comment by Brad Ball — May 5, 2009 @ 8:07 am
You are so right. Coversion Conversion Conversion!
Google Adwords is far better than what you get on facebook but I believe they are working on it.
Comment by facebook marketing — May 5, 2009 @ 9:16 am
Ok, Facebook ad service gives you nothing about conversions.
Time to ask the question: why?
1.) They are not capable to make it. I don't think this is the case.
2.) They are working on it, but not ready yet. This is more or less promising.
3.) They think it is better to keep you in the dark. Well, you (we) are in problem.
Comment by Csaba Kétszer — May 6, 2009 @ 12:35 am
I was able to track conversions for Facebook Ads via Google Analytics goals, and it didn't convert well, at all. I know which ads were clicked on, but not why the ad showed up, since their stats don't include that information. If I use Facebook Ads in the future, I'll likely use a different keyword for each ad, and segment the ads as much as possible, then track their success on the Analytics end.
Comment by Seth — May 9, 2009 @ 1:50 pm