Gordmans opened two new stores in Minneapolis and promoted them with several Facebook campaigns, working with BlitzLocal.com.
They created two different types of campaigns: one advertising an event, and another advertising a tab. Both were targeted at the city level. Because the scope was so narrow, tests included adding the city name as part of the ad image itself. Overall though, these ads definitely helped in garnering more visitors.
Sponsored Stories Outperformed Regular Facebook Ads
There are two types of sponsored stories – a sponsored like, which targets friends of your fans, and a Sponsored post, which shows messages to existing fans. Gordmans ran a highly targeted sponsored like ad:
- within the regions where the retailer has its 68 retail locations
- female demographic
- keywords related to bargain-hunting
While most Facebook ads are lucky to get a 0.05 percent clickthrough rate, this campaign drove a .4 percent CTR on the first day, which fell by 45 percent within 48 hours to .2 percent.
Generally, anything at or above 0.1 percent is highly optimized. Sponsored likes also cut the cost per click by 70 percent and cost per fan by 83 percent overall. That’s like getting a 77 percent discount off from Facebook.
In two days, this ad drove 515 clicks for $76 and gained 418 new fans. That works out to 18 cents per fan and a click-to-conversion rate of 81 percent.
Most brands out there are getting fans at between $2 and $10, the former via self-serve and the latter via premium ads. $0.18 for a new fan, one that is giving your brand permission to talk to them, is a great cost of acquisition.
Gordmans found the key to success with Facebook advertising is leveraging the endorsement of their existing fans. People are far more likely to click on events that are associated with what their friends are doing.
Highly Engaged Content Equals Positive Fan Growth
The creative refresh demand of social requires you to be able to iterate much quicker, to refresh your content and creative much more quickly than other types of online marketing. Gordmans knew they needed to rotate ads to keep them fresh. Facebook ads are typically served to the same users multiple times, often in the same day, so they quickly tune-out repeat ads.
Gordmans also used the Webtrends Apps platform to develop fresh and engaging applications rewarding customers for engaging through fans-only promotions.
While apps have about a 10-to-14 day shelf life before people start to drop off in interaction, ads have around three-to-five days before you see a dramatic drop off. But because Gordmans’ wall postings resonated well with the brand, only five percent of fans have unsubscribed from the page.
Geo-Targeting Works
The average human attention span is about 30 seconds. In fact, successful Facebook advertisers try to relate images to their audience, for example by serving an image of a local landmark or in Gordmans case including the city name is another way to garner more attention.
By injecting the city name in the ad image in conjunction with the geo-targeting, the ads were more appealing and relevant.
Gordmans found that geo-targeted ads with the city name on the ad image performed better than the ads without it. With geo-targeted ads that offered fans the opportunity to check in and claim deals, Gordmans was able to drive customers to their brick and mortar stores.
More Earned Media At A Cheaper Rate
By measuring the number of impressions the Facebook page generated over time, then estimating a $5 cost per impression, we can determine the earned media value of the brand.
Earned media represents impressions generated for free, from efforts outside of the traditional ad spend, which includes viral and word-of-mouth publicity such as likes and shares.
This type of exposure has a high quality because it leverages the trust of friends. With over 38 million impressions over a period of 79 days, at the aforementioned $5 CPM, we get $190,000 earned media value for that time period, which represents how much ad spend would have been required to achieve the same number of impressions via paid media.
Extended out over a year’s time, the value is $879,000 per year, or $4.5 million in perpetuity, assuming we’ve applied a 20 percent discount rate to the projection of earned media over time.
What’s Next?
Now in the works is a new Facebook places strategy— to drive check-ins, shares, and coupons.
Gordmans has had a lot of success in running Google Adwords campaigns with a focus on letting users redeem coupons. Running similar campaigns on Facebook will reinforce the Google campaigns, and with Facebook’s social twist tied into the coupon redemption strategy, they expect to see excellent results.
Veronica Stecker, is marketing and social media planner at Gordmans. Dennis Yu is co-founder and chief executive officer of BlitzLocal.com.
I get like 1-2% CTR with 0.01 CPC
. Bought a course which teaches you how, simple technique that no one ever thinks off!
Comment by Jelle Kaldenbach — May 26, 2011 @ 12:01 pm
What a great post. I have been using the geo-targeting tactic you mentioned here for a long time, but I will have to try sponsored links more. My CPC is generally much better than the average, but I attack it with an A/B split test approach and continue integrating new ads all the time which seems to help. I am eager to test your sponsored story idea and see how it helps my clients.
Comment by Trevor Nelson — May 26, 2011 @ 12:21 pm
Greetings from Bali Wedding. Good article, gives new knowledge for us.Thanks
Comment by Bali Wedding — May 26, 2011 @ 1:39 pm
CTR for local businesses or franchised locations isn't as strong as entertainment or CPG brands. The type of interaction we're looking for is quite different– the user "investment" in the relationship is higher, so the interaction rate is lower from both a CTR and fan conversion standpoint.
Comment by Dennis Yu — May 27, 2011 @ 6:18 pm
Sponsored stories are awesome! We're averaging CTR's of .15 and above. Fan subscriptions have nearly tripled in how fast others are connecting, too. We covered all the ins and outs on last weeks teleseminar. Great article
Comment by Matthew L. — May 28, 2011 @ 11:52 am
Such a great article, thanks for sharing the numbers. I loved whe CPC cost drops down the .25 cent in the US
Comment by @nonosisi — May 28, 2011 @ 5:56 pm
If you have any questions, just shoot them to dennis@blitzlocal.com or comment on my wall at facebook.com/dennisyu. I do respond to all comments, though sometimes it may take a couple days.
Comment by @dennisyu — May 29, 2011 @ 1:29 pm
Wow….. That's really interesting. I've tried facebook ads 1 time but didn't get success with it, may be I was trying less interested campaign (education) on it.
But – I should try again with more planning & confidence. Your article rocks!
Comment by Ankush Kohli — May 30, 2011 @ 7:32 am
http://www.shoemoney.com/2009/11/16/dennis-yu-ris...
Comment by @sohant — May 31, 2011 @ 5:10 am
Being a local business has nothing to do with having a low CTR.
You can have an extremely high CTR, and a very effective and fruitful campaign at the same time.
Comment by @sohant — May 31, 2011 @ 5:11 am
I've tried fb ads a half dozen times with no appreciable success. AND the last two times I tried to do an ad I got errors saying my ad wasn't uploaded successfully even tho photos were right size etc. I am a struggling small biz owner in the small town of Truth or Consequences, New Mexico, USA and Really Need my online store to take off! WISH I knew what I am doing wrong as my brick & mortar customers love my eclectic made in New Mexico USA inventory!
Comment by Celeste Rich — May 31, 2011 @ 8:13 pm
Thi was a great article and great information.
Comment by Opal Gibson — June 4, 2011 @ 7:43 pm
@sohant– "low" CTR is relative. Depends on what you're benchmark is for low. In this case, entertainment brands can get 1% CTRs if they have the right content, while local businesses can get perhaps 0.4%. But more important than CTR is results– sales, leads, emails, and other measures.
Comment by Dennis Yu — June 5, 2011 @ 3:42 am
Matthew– you're doing fantastic! How are you balancing between Sponsored Like Stories and Sponsored Post Stories?
Comment by Dennis Yu — June 5, 2011 @ 3:43 am
Hi Ankush, sorry to hear that. What page are you promoting?
Comment by Dennis Yu — June 5, 2011 @ 3:43 am
Celeste– my goodness. Sorry you are not having a good experience with Facebook ads. I'll have to admit that the system is often buggy, so sometimes you have to upload your ads several times to get them in– and then wait to get them approved. Have you tried leveraging your brick and mortar customer to love you on Facebook by printing your Facebook page in your print markteting materials or perhaps setting up a Facebook deal?
Comment by Dennis Yu — June 5, 2011 @ 3:47 am
Nice post! I agree that geo-targeting tactic does work
been doing it for a while now and still doing pretty well with it.
Comment by kevin v — June 6, 2011 @ 9:56 am
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