WSI Websmart Consulting Blog

Facebook is still growing. Companies continue to be interested in creating Facebook pages and groups, grow online communities and tell their best customers about new products and services. Meanwhile, very few are using it as an advertising platform. Why?

When Facebook launched its ad platform a few years ago it was met with a disappointed response. marketers expected another Adwords (Google) advertising system. They tried to do what they had been doing on Google search on Facebook. It didn't work. Google adwords is a wonderful platform because it customers use Google to find products and services.  Dentists,  schools or plumbers can respond to a search for "dental veneers in Dandenong" or "reliable plumber in Moorabin" with relevant ads. These are quite obviously potential customers.

Social media doesn't work like that. Facebook users are having fun, communicating with friends, joining groups and playing games.  They are not looking for your product service. If you show them an ad for "Dog washing, 30% off" while they are browsing photos of last night's office party, they will ignore it. Wouldn't you? On the other hand, if you ask them to join your "dog owner's  of South Yarra" Facebook group, they might be interested. Your group page can let them know if there is a dog washing party in their suburb next Saturday . It might encourage them to organize one themselves for fame, prestige and some free pet shampoo. Context is important. You can use Facebook ads to build your list of "subscribers," people who listen when you say something.

Is a fan on Facebook as good as a hot lead? No, probably not. That doens't mean that your return on investemnt can't be great.

Reasons to Consider Advertising on Facebook:

• Low Advertising Costs - At the moment, a facebook click could cost you less then 1/10 of an Adwords Click.  
• Precise Demographics. Is your ideal customer a single 35-50 year old female living near the inner city? Facebook knows who these are.
• Relationship Building. If someone needs a haircut right now, you (a hair stylist) can reach them with Google. But most hair stylists know that the way to really succeed is to find customers who care about hair and want you to cut it every time. The best customers want a hair stylist they can trust every time. Facebook is a chance to build trust.

Want to learn more? Get our Social media marketing white paper.

Considering making Facebook part of your marketing mix in 2010? Give us a call.

What is Google's "Ad Auction?"

Advertisements on Google are bought via an auction. Each time a Google user anywhere in the world searches on Google, an automated auction takes place. Advertisers do not need to stand around bidding, they have set their bidding rules up in advance. Advertisers bid for placements, but they only pay per click. Higher ranking ads get more clicks by appearing higher on the page, but they pay more for each click. 

What Goes in to a bid?

Advertisers will define ahead of time what searches they want to appear on. For example, a mechanic may want to appear for the search term "broken car." The advertisers will enter a maximum bid and write an appropriate ad. A high bid is not enough to win the ad auction. Two more elements are taken into account: Quality Score and CTR.

Quality Score

Quality score is a semi-secret sauce. Google doesn't tell us exactly how it is calculated. They do tell us roughly what goes in to it though. The main ingredients necessary for a high quality score are relevant ad copy, a relevant landing page and a high click-through rate (CTR). An advertiser missing any of these ingredients will either pay more than necessary or appear lower on the page, often both.

Google Ad Auction Explained

The video below contain an explanation of the Google Adwords ad auction by Hal Varian, Google's Chief Economist.