I have been advertising on the internet as long as there has been advertising on the internet. It has been fascinating to watch the changes. Online advertising has moved from very rudimentary models to extremely sophisticated and slick systems that are frankly just amazing. Facebook is right up there at the top of the pack and I want to talk about the advertising side of Facebook today.
Before I do, I will share a quick story. Back in the early days of Google, I stumbled onto an idea and my company engaged in a practice that is sadly no longer possible. We bought huge blocks of advertising from Google and then parceled it out and resold it for a profit to online stores that wanted to advertise but were too small to deal with Google directly (this was long before AdWords). We were buying the advertising on a CPM basis which means we paid money based on how many times ads were shown. However, we resold the advertising on a CPC model which means we charged every time someone clicked on those ads.
For example, we might have paid $20 for ever 1,000 times an ad was viewed. We anticipated that a client might click on the ad maybe 8% of the time so we knew that we might get 80 clicks for those 1,000 views. If we sold those clicks for $1 each, we quadrupled our money. We actually achieved those kinds of margins regularly and that gives you an idea of how “loose” things were. It was the wild west and uncrowded and even the big boys (such as Google) were still figuring it out.
I wish those days were still here but they are not. Today, even though as an advertiser you have incredible control over your advertising, the margin of error is now razor thin. I cannot state this more emphatically. If you are not very, very careful and very, very smart, you can lose your shirt advertising online on Facebook and for that matter, anywhere online. Facebook will give you great tools but remember that your competitors have them too and they are not playing around. This is no game.
If you can get a handle on Facebook advertising though, you have an amazing opportunity. As I mentioned, Facebook is cutting edge in what they provide to advertisers. I will give you some examples of what you can do.
- You can advertise on Facebook to people that have visited your site in the past few days and you can even show them an ad of the specific product(s) they looked at.
- You can upload your email list and run ads geared towards those people when they visit Facebook.
- You can track sales, subscriptions, and other metrics back to your Facebook ads to make sure they are working.
- You can target ads to people that “like” similar musicians, businesses, etc.
- You can get Facebook to build a custom audience of people that are similar to a list of people you provide to them. This works incredibly well and is eerie because it gives you an idea of just how much Facebook knows about all of us.
- You can test enormous numbers of variables such as ad text, time of day, geographic location, and bids to fine tune your ad campaign’s performance.
In short, with Facebook, you have incredible targeting available. It is not like running an ad on TV where you are spraying your message across numerous demographics. If you want to show your ads only to women between the age of 34-46 who homeschool, are conservative and live within 50 miles of you, you can do that. If you want to show your ads to people in the Philippines that are Baptist and like hymns, you can do that too.
If you are a small business, church, or ministry, you almost can’t afford not to be advertising on Facebook. Are you a wedding photographer? Guess what? You can run ads geared at women within your zip code that are researching weddings. Are you a restaurant? You can put a coupon on Facebook targeting people in your area that match the demographic of your average customer.
Here is the clincher: none of this costs too much money. Another huge advantage of FB is that you can test very small. You can’t run a inexpensive test TV campaign or radio campaign but you can literally test ideas on FB for $5.
The drawback? You have to be careful and you have to be willing to test and fine tune. Even with all these sophisticated tools, you will still find that profitable campaigns can be elusive. Sometimes, what seems like an obvious winner just will not work.
Over the past year, for music, I have been running ads on Facebook that target people that have visited my website and I have also run ads targeting custom audiences that are built by Facebook for me based on criteria I give them. I have sent the traffic generated by those ads directly to my website (NOT my Facebook professional page). The cost of that traffic has been a fraction (in the $0.15/click range) of what I would have to pay for traffic from other advertising mediums such as Google.
The smaller your niche and especially if you are in a small to mid-sized municipality, you can likely see enormous success if your business, church or ministry is local. Local advertising on Facebook tends to be a huge bargain because as a rule, local businesses still are not up to speed with online advertising. In fact, local may be the last frontier of the wild west that I described above. Take advantage of that if you can.