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03 Mar 2014

Are Facebook Ads a Waste of Money?

Are Facebook Ads a Waste of Money?

If you run Facebook ads, you’ve most likely come across the video below titled “Facebook Fraud” by Veritasium. If you haven’t, I encourage you to find 9 minutes to watch it in its entirety, as it is very well done and poses some eye-opening stats about the potential dark side of Facebook advertising.

Response:

First and foremost, I applaud Veritasium for their very well thought out video on Facebook fraud. They enlightened many to the perils and power of click farms both internationally and right here in the US. I do however feel they came up unfortunately short in their conclusion by stating, “Wherever you are targeting, advertising your Facebook page is a waste of money” and likely gave the wrong conclusion to an otherwise outstanding editorial.

Jumping to the conclusion that advertising your Facebook page is a waste of money is broad, untrue, and most likely included in the video just to stir up a response (job well done if that’s the case!). As Jon Loomer correctly states, “If you still use Facebook ads as if it’s 2012, you deserve the results you get.”

Approaching Facebook advertising for your business like Veritasium did may very well result in a waste of money. Any ad campaign, regardless of the ad network, is only as good as its strategy. While a holistic strategy has many variables, we’re going to focus on just two: measurement and targeting.

Measurement

With so much data available it is easy to get lost in a sea of big numbers and confusing terminology. Measurement really has two distinct parts, both equally as important.

1. Selecting the most effective KPIs to measures success

What Veritasium did so well was point out the potential for fraudulent activity on Facebook and showed why your businesses ‘Likes’ may not be as great as you think they are. What they failed to point out is that ‘likes’ are not, and never were, a good metric for measuring the success of an ad campaign.

Measuring Facebook ads solely on ‘likes’ is similar to a big box store measuring success only by counting how many people walk within 100 yards of their main entrance. While it may correlate with an improvement, it also may not.

The closer to the end of the funnel measurement is the better. Like the big box store, better measurements may be how many people come into the store, how long they stay, or what percentage make a purchase. For Facebook ads, this may mean website engagement, leads, or sales. While every metric may not be 100% tied to revenue, taking the time to use thoughtful KPIs that highlight direct business impact will make ad campaigns significantly more successful.

2. Actually measuring your performance to provide actionable insights for optimization

Even if Veritasium thought that targeting those developing countries was a good idea from the start, had they used some measure of engagement instead of ‘likes’ to measure success, they would have realized almost instantly that there was an issue with their ad campaign.

They still may have accumulated a few 1,000 ‘likes’ from those countries but could have significantly reduced their wasted advertising dollars by eliminating campaigns targeting countries with low-engagement levels. This leads us to the 2nd area where you can improve your own campaigns, right from the get-go. Targeting.

Targeting

In many ways the Veritasium video showed us exactly how NOT to target ads, which is just as valuable as showing how to target ads. While it may seem simple, knowing your audience and targeting them properly may be the single most important facet of running successful Facebook ads.

In the video, Veritasium targeted their ads to countries already well known for spammy click farms (Egypt, Indonesia, Philippines, etc). They received about 75% of their total ‘likes’ from these countries and then discovered that those users engaged just as like you’d expect them to. Not at all.

80000 likes

A better strategy for Veritasium would have been to do a bit of research prior to launching their campaigns and targeting ads based on their current target audience’s demographics. In Veritasium’s case, their YouTube Analytics could have been used to gain a better understanding of where their most valuable users come from, and then used that data to target specific demographics (age, gender, location, etc.) with their Facebook Ads.

For your business, you may find this demographic information in your Google Analytics account by navigating to ‘Audience’ in the left navigation. From there, you can gain insights about your site visitor’s age, gender, interests, location, language, and much more.

Targeting your campaigns correctly from the start using your own readily available demographic data and effectively measuring your Facebook campaigns using metrics that you fully understand will undoubtedly result in success.

To be perfectly clear, Facebook advertising is not a waste of money. Like any advertising, approaching your campaign with a quality, strategic plan for targeting, measurement, and optimization will result in outstanding results.