Is Facebook Really Worth It?
There are now as many Social Media experts out there as there were Search Marketing experts 5 years ago. I AM NOT one of those guys. But, I run a small eCommerce business that has embraced Facebook as a marketing platform and is beginning to reap the rewards. Visit our Beaded Impressions Fan Page for some quick insight on how we use it.
If you are still sitting on the sidelines wondering if it will benefit your business, you should stop sitting and start doing. Here's why!
Facebook Delivers Results
You've probably read a lot of the reasons why Facebook is good for businesses - connections with customers, build your brand, get fans (likes), do market and product research, etc. But, I'm a bottom line kind of manager, and I'm here to tell you that Facebook will deliver sales. That's right, SALES, not just likes and posts. Facebook delivered as many measurable sales dollars this month as Yahoo and Bing. And, we are building better brand loyalty in Facebook than we ever had a chance to do in search engine marketing.
Just as we have a mix of organic and PPC conversions from our search engine marketing, some of our Facebook referral sales were the direct result of product ads and some were because of our other fan page content - our online store, our blog, etc. We've significantly increased our promotional advertising with a good ROI investment in the last 2 months. But, we also believe we are seeing more conversions from our conversations and content within our Fan Page.
You don't have to jump right into advertising on Facebook to reap rewards. In fact, I advise against doing that. Build a presence by creating a fan page, soliciting fans from your customers and email subscribers. Build a content library by posting pictures, writing on your wall with stories or links to content that interests your target market. Those efforts can be done with $0 investment. Once you have some critical mass of fans and content, then start to solicit more fans by advertising your fan page within Facebook. That can be done on as little as a few $ per day. That's how we started. Now we have about 8,900 fans.
One big question for many marketers is will they see a return from advertising on Facebook? I'll just summarize some results here so you can get some notion of why Facebook is compelling to us. The CPC is about 25% less than Google. Our overall conversion rates from Facebook are about about the same as Google. It appears that PPC conversions are also about the same, but we still need to do further work within Facebook to accurately differentiate PPC conversions from other conversions.
The average order size is the same. The CPM for Facebook is staggeringly low - $0.30 per thousand impressions. That's versus an industry standard of something like $5-8 CPM for PPC ads. With Facebook you get both cost efficient brand ads and click throughs reaching an extremely specific and relevant audience. The ads can also be targeted more efficiently than PPC ads on Google.
If we want to "buy more traffic", it will be quite easy on Facebook. We can probably reach many more targeted buyers and drive more clicks in a single day with a single Facebook ad than we can reach in all our Google campaigns combined (10+ right now) at about 25% less cost per click. We will not have to change bid strategies on hundreds of words, change budgets or even write dozens of new ads as we would have do in Google to get a big traffic increase. In fact, we will write a single ad or two that will be written in 5-10 minutes. Obviously, this depends somewhat on the size of your target market, but Facebook is pretty large these days and it's quite easy to find impressions and clicks. The conversion factor is the big question!
The overall click through rate in Facebook is much less than PPC, more like banner ads, but the number of impressions shown to a fairly small market is astounding. Guess that's because there are so many page views going on within Facebook and relatively few advertisers right now. Hence the click throughs end up being high in number for us.
When you do decide to advertise on Facebook, here's a tip, just ignore Facebook's recommended PPC bids. They are ridiculously high compared to what you actually need to bid for good results. Also, use PPC bidding for your ads as you'll likely get better results than CPM bidding.
Some Facebook History
We started on Facebook with a simple "Fan Page" about 16 months ago. Started slowly, built some traffic and fans with a "beading contest" tie in to our website. At this time last year we probably had about 500 Fans and very little interaction on a daily basis. Facebook really did not have tools at that point to provide much insight into your Fan interactions either.
I experimented with some advertising last year targeting "Facebook interests" around beading and jewelry making. It was informative, but not compelling at that point. We found we could drive traffic at a very, very low cost, but we weren't seeing a huge impact on sales at that point. Then, I decided to do ads for "Fans" back in the dark ages when they were still called fans. Now, you just advertise for people to "like" you. In either case, it was a very low cost and low risk way to add fans. First it was 20 or 30 a day, then we kept tweaking the budget and soon it we had a few thousand fans.
Since that time, we've added an "About Us" tab, a live Blog page, and most recently, a full Online Store using technology from SortPrice. We've also continued our "brand" advertising to get fans within Facebook. We now have almost 8,900 fans. Small by many brand and large eTailer standards, but that's probably 7,000 people that were not our prospects a year ago that we can potentially reach every time we post a daily status update. My guess is that over time that will provide a pretty cool return on our investment in gaining fans and brand interest and loyalty.
I cannot begin to tell you how to do Facebook marketing in the post. There are many ways to approach it, and they really come down to what your objectives are - sales or brand or both. If you take anything you should just start growing your Facebook presence in some way, at least with a fan page. Now, don't wait.
There is some investment of time, you can choose to invest money in ads to promote your page or on some applications for a blog or a store like we did, but you don't have to. You will see results, and if you are not building your Facebook presence now, you may miss a big shift in eCommerce marketing. See the recent article by Paul Chaney from Practical eCommerce for more details on that!
Paul Chaney says:
Thank you Dale for writing one of the best polemics on how and why small businesses should use Facebook that I've ever read, all without the BS and hype we "social media experts" are know for. Just good, solid, sound advice from someone who uses these tools every day. Everyone should read this post.
Paul Chaney says:
Dale, I took your advice with a client of mine. and started using Facebook Ads intensively. The click-thru rates were low, but so was cost of acquisition. We saw 77% growth in client's fan base at a cost of about $1.00 per new fan acquisition. We're working now to make sure those fans turn into customers.
We also ran a separate campaign to direct users to the website targeting specific product pages. Though we don't yet have specifics, I can tell you sales are up as is traffic to the website. Aside from search, Facebook is the leading driver.
So, thanks for sharing your wisdom. You've helped at least one other small ecommerce merchant turn a profit this holiday season.