Google dominates the online advertising market with approximately a 35% share. Facebook have a market share nearer the 20% figure but dominates the advertising on social media. Should you try Facebook advertising as part of your marketing mix?
When it comes to online advertising, Google and Facebook are the two main players, but they’re very different beasts.
Google search ads are usually the first option for pest control companies considering online advertising, as they target potential customers actively searching for pest services. Facebook is usually ignored as Facebook users spend more of their time on Facebook following their newsfeed, rather than actively searching for products. However, with around 60% of the Australian adult population active Facebook users, spending on average over 1.5 hours a day on the platform, it also makes sense to consider Facebook advertising. Advertise where your customers spend their time – “follow the eyeballs”.
Firstly it’s important to understand how Facebook works. When you post to a Facebook page, the vast majority of your followers will not see it. Even back in the good ol’ days, on average, your posts would reach just over 12% of your followers. From late 2013 to early 2014, the organic reach dropped quickly over a short period of time, to just 6.15%! (Social@Oglivy, 2014). Facebook claimed they didn’t do this intentionally, but the end result was that businesses decided they had no choice but to use paid ads on Facebook to reach their customers – exactly what Facebook intended.
If you want to use Facebook as a business tool, you really need to consider paid advertising. Of course, the first question is ususally, “Does Facebook advertising work?” Well, it depends…
Generally speaking, advertising can be split into adverts that drive awareness and brand equity and those that drive sales. Awareness ads are exactly that, designed to drive awareness of your business. Brand equity ads are designed to grow your brand image and develop the relationship with both your customers and potential customers. They are not about the hard sell, but should deliver sales further down the track. Facebook activity to drive awareness or brand equity is all about getting engagement with the content and driving traffic to your website.
If you just want clicks and to drive traffic to your website to engage with your content, Facebook can be very cost effective. With a well written ad that gives a high relevance score (eight or nine out of ten) and a high click through rate (CTR), you should be able to drive traffic to your website at less than $0.10 per click. However, if your objective is more about driving immediate sales, then the cost per acquisition and return on investment are more important metrics.
If you’re not recording your source of sales – at the very least, when a customer contacts you, you need to ask where they heard about your business – there is no way you can determine the effectiveness of your advertising. For each advertising campaign, you should be able to work out how many advertising dollars you spend to get one customer and determine the value of that customer (in both initial sales and lifetime value). This will give you the cost of acquiring a new customer and allow you to determine your return on investment (ROI).
So, how effective is Facebook at delivering a low cost per acquisition and a good return on investment? In terms of click through rate, Facebook ads are often significantly lower than Google search ads. However, not all clicks are equal. For example, it’s no use if the cost per click on Facebook is ten times cheaper than Google, if the conversion rate is twenty times worse – Facebook will have an ROI that is half that of Google. The skill in succeeding on Facebook is being able to grab the interest of a potential customer who may not be looking for your services, thus achieving a higher than expected conversion rate. This can then deliver a better return on investment than other online media, as a result of the lower cost per click.
(If you’re doing your own advertising it’s important to be familiar with this terminology. If you find it hard to follow, it’s possibly an indication that you should be hiring a marketing professional to do your advertising rather than attempting to do it yourself).
Success with Facebook comes down to the skill of the advertiser – Are you advertising the services that gets the best response with Facebook users and deliver the best ROI? Have you refined your target audience? Is your advertising creative optimised to maximise conversions with your target group of Facebook users? It’s important to understand that the same advertising creative does not necessarily work as well on all media – the ad that works on Google, may not work on Facebook.
So should you try Facebook advertising? Yes. It should be part of your marketing mix (the combination of marketing activities employed to deliver your business objectives). With the lack of organic reach, you should consider paying to boost some of your blog posts at the very least, as well as considering specific advertising campaigns. However, as with all advertising, it’s unlikely you’re going to get immediate success. Even with a marketing expert on board, it will be a process of refinement, recording metrics, analysis and refinement.
Dr Phil Ridley, Director, Bug Doctor Media