review: Facebook Advertising
For those of us with small businesses (crafty or not), advertising and marketing is always a difficult area. Very few of us can afford an advertising budget, so we have to try to make wise decisions that lead to maximum promotion with minimum expenditure.
Having said that, it could be that we’re missing out on effective advertising methods, so I thought I’d try an experiment with Facebook advertising on behalf of the entire crafting community, to see if it might be something we should be doing.
This is what an advertisement on Facebook looks like – I’ve circled the ad in purple
For this experiment, I spent $150 on Facebook advertising. Before you think I’m wealthy or foolish enough to waste $150 (that’s the revenue from close to 40 pattern sales!), I should mention that I received all the credit I used as promotional vouchers by signing up for Canada Post’s Venture One small business scheme and the VISA Business Network, so I haven’t actually lost anything as a result of this test.
Setting up the Ad
Facebook know their users, so you can tailor your ad to be shown to only a specific demographic. If you want to, you can specify your target age, gender, location, language, interests, etc, and only the FB users who match your profile will see your ad. In my case, I limited to residents of US, Canada, UK, Australia and New Zealand who listed Crochet, Crocheting, or Amigurumi in their interests. This is a very powerful screening tool!
You can also choose to pay by CPC (you pay each time your ad is clicked on) or CPM (you pay per 1000 views of your ad), your maximum CPC or CPM bid, and the daily maximum you’d like to spend.
Your ad consists of a title (up to 25 characters), an image (110 x 80 pixels), and body text (up to 135 characters). Facebook have some very specific rules about the content of their ads: no abbreviations allowed (e.g. ‘&’ instead of ‘and’ is not permitted!); full sentences and punctuation are required; no excessive capitalization – it’s worth checking to make sure you follow all their rules, because…
What Comes Next
Once you’ve set up the ad, you have to wait for it to be manually approved. This takes a minimum of several hours (in my experience), and if you change anything in the ad later, you have to wait for it to be approved again before it will run. So make sure you get it right first time!
Once the ad has been approved, you can monitor stats from your Ads page, and see how many times it’s been viewed, clicked on, and the average cost you’ve paid (Facebook, like other ad systems, only make you pay the minimum you need to ‘outbid’ other advertisers, so you don’t always pay your maximum bid price). You can also pause or delete your ad if you need to.
My Experience
Facebook certainly has plenty of users. I was expecting to spend a few dollars a day, but I blew right through my initial $50 within 1 day! This is the ad I used:
I used the CPC model and my $50 bought me 67,252 impressions (times that the ad was shown on anybody’s screen) and 241 clicks through to my site. Not one of these clicks generated a direct sale 🙁
So, with my remaining $100, I switched a few things up. Carina pointed out that my ad did not contain the word amigurumi (well, duh, how did that happen?!), so here’s my revised ad text:
I tried running the ad with the two different pictures shown above, but after a couple of thousand views I could see that the PocketAmi Christmas image was getting better results, so I pulled the AmiDogs ad and kept running the Christmas ad.
I also switched to the CPM bid model, so instead of paying per click, I was paying per view of the advert. This didn’t seem like a good plan – after all, I wanted people to click through, so that was more valuable to me than the number of views – but it turned out that my views cost me a lot less with this model, and I also got more clickthroughs! Why? Here are my theories:
- The text was more appealing in the revised ad
- People had seen the ad more often by now and were more tempted to click it
- By chance: the people who happened to see the ad on Day 2 were more receptive to it
My $100 lasted for 2 days, although the morning of the first day the ad was ‘pending’ waiting for approval of my changes. The results were 290,241 impressions and 1206 clickthroughs – that’s twice as many views and 2.5x more clicks per dollar than with my first attempt!
I’m going to give you full disclosure of my revenue, in the interests of helping you make an informed decision: my Google Analytics report shows sales of only $70 resulting from these clicks, although it’s not 100% accurate (I’ve noticed it doesn’t pick up all my sales), so that could be a low estimate. So, on the surface, I didn’t even break even with my advertising budget, but this doesn’t account for the intangibles:
- People who signed up for an account or my mailing list and may become customers at a future date
- People who bookmarked or saved my site for later
- People who didn’t complete checkout at the time, and returned to my site later to complete the purchase (so the sale wouldn’t show up as coming from Facebook)
Conclusions
Facebook ads are definitely interesting. I love that you can specifically target the people who are your potential customers. But the advertising costs are just too expensive for smaller businesses to justify, unless they can somehow convert almost all their clicks into sales, or sell a very expensive product where one sale would cover the advertising budget for the day/week.
Obviously, this is just going from my personal experiences, and you may have different results if you try using Facebook ads. Personally, I won’t be advertising with FB again unless I can find another promotional voucher for free credit – it’s just too expensive for my budget. Having said that, I’m still hopeful that the almost 1500 clicks I received during the course of this experiment will lead to some more new customers at a later date, as well as the few direct sales I received on the day.
I hope you’ve found this report helpful in deciding where to spend your precious funds to try to grow your business! Have you tried FB ads too? I’d love to hear about it – please leave a comment and share your experience.
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Linton Wells said
Interesting article. We’ve experimented with Facebook ads also in the past. They can generate some “likes” to your site if you post often enough and are willing to burn through some cash each day, but it doesn’t appear the ads ever resulted in any sales for us. With that said, our cabins are relative big ticket items and not impulse buys, and they have a longer sales cycle in general. We’ve found old fashioned word of mouth to be some of our best advertising so far, and it’s free, as long as you treat folks right.
kurt cheng said
Thanks for the info! It helps alot!
Aliciataylor said
Nice site! Very professional and full of information. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Thanks for all your interesting inputs here.
bill said
When people click on my facebook add they go to www.WinstonSalemInsruance.com
My Facebook records show 44 clicks last month but the receiving page only shows 4?
Does anyone have any thoughts?
Clarence Holmes said
Hi,
I just came across your Facebook advertising review. Thanks for sharing your insights. I am also just getting started with advertising on Facebook (photography business). I think one of the keys is to be very, very specific in targeting the ads. This way, those who see the ads should really be interested, and likely to click (and maybe buy!) If the ad is not targeted well enough, people who not as interested, but may just be curious will click, thereby eating into your ad dollars.
Regards,
Clarence
June said
I think you’re right, Clarence. With your photography business, you’ll be able to target by location, which will be your most powerful tool for narrowing your target range – as my business is online, my target audience is English-speakers worldwide, so I couldn’t narrow it down that way.
In my case, I couldn’t see any way to target better than I did: the only way I could target more specifically would be to only choose people who had listed Amigurumi in their interests, but there were only about 1000 people who had done that! I assumed that most of those people will have already heard of me, so I didn’t want to limit my reach to only those 1000 people – that’s why I chose to go with the broader target of people who listed Crochet or Crocheting or Amigurumi.
Digmen1 said
Hi June
Great Post.
You did not say what you were bidding on per cpm or cpc !
I am a small business liek you and think that Facebook ads are great.
I did some visits and a couple of sales.
But I found that the cost of clicks just went u and up to 50 cents per click, where it is just not economic for someome like me (and you) with a low cost item.
It seems that ll the big companies have got onto Facebook and are prepared to bid $2.00 for each click !
Kind Regards
I have bookmarked your site 1
Virgile said
Very helpful and interesting, thanks for the review !
Conor Pendergrast said
We’ve just created a page on Facebook (only today!) but have had our website running for a couple of months, with a Twitter account as well. I was thinking this evening about the Facebook ads and wondering about the cost. Targeting ads might work well for us (education & parenting services) Anyway, thanks for this – you’ve given me a good idea of how long (not very!) $150 will last!
Conor
alex said
Thx for the review, read the whole thing. I just did an add on facebook. Glad, i made the right choice by using CPM.
Cheers,
Alex
nicky said
Well just talking about it made me become a fan on your page!
Jessica said
Wow–thanks for not only taking the time to experiment with these ads but also to post such a thorough review of your experience! I have been wrestling with the marketing stuff for the past few months, wondering where I should spend my dollars, and the advice out there for small businesses doesn’t always fit an indie craft business. So I always find it incredibly valuable when a peer shares this kind of information. Thanks for being so awesome!
melissa said
hi june!
what a wonderful review of the process. thank you so much for taking the time to share it!
xoxox
melissa
Christy DeKoning said
Hi June – thank you for the detailed report!
I, too, tried the advertising (using credits, as well) and found the same thing – lots of click-throughs but not much more. I didn’t use it for a specific item, more for general advertising of my FB page, etc – it brought me some new fans, yes, but not much else that I could directly equate to the ads.
Like you, I’m not inclined to spend my hard-earned money on the ads. I find my dollar goes further when I give it back to my clients in the form of “referral credits” instead.
June said
Some great comments here – thank you!
Stacy: I’ve noticed the same thing; it seems that Facebook pages don’t have any metadata associated with them, so the only way people can search for your page is if they know the name of the page, i.e. people have to search for “planetjune” to find my page; a search for “crochet” or “amigurumi” or even “planet june” will not get them to my page!
This seems to be a flaw in the Facebook page system – there should at least be a categorized page directory, or a way to search for the subject of pages… Maybe that will happen at some point in the future. For now, the only way for people to find your page is if you tell them about it, so that means you can only really reach people you’ve already reached through another venue – it’s a bit circular 🙁
I’ve only just started my Facebook page, so I only have a couple of hundred ‘fans’ and I’m not sure of the value, business-wise, in having it. But I think (hope) that the more venues I appear in, the better for business overall.
(By the way, my ad linked straight through to my shop, not to my Facebook page. A better strategy would have been to make a tailored landing page for people clicking the link, but I didn’t have the time to do that!)
Haley J. said
Hi June! I’ve been following your site for a little over a month (RSS subscriber), and I was excited to see your ads on Facebook. I noticed them right away! I can tell you that if I hadn’t already found you, they definitely would have piqued my interest.
I’m really glad you’ve given feedback about this process. It does seem a bit expensive for the revenue you generated, but it sounds like it really got your name out there. It may help if you try this again to also draw attention to your free patterns or holiday specific items. My friends and I discovered your site initially when we were looking for good crochet pumpkin patterns. (Results are here: www.flickr.com/photos/haleysuzanne/3984733551/in/set-72157622524485864/ ).
Best of luck to you!
Allison said
I haven’t placed an ad on FB, but I did see yours!
futuregirl said
I managed the Google AdWords ads for a company I worked for about 6 years ago. I found, like you, that minor changes in the ads could spell a big change in the click-through rate. At the time, I think I was passing a query string from the ad (each ad had it’s own) to the page and then writing a cookie so if the person came back later (and still had the cookie) I could credit the sale to the particular ad.
In our case, we sold a TON of our $10 products using the ads (as opposed to our much more expensive products). My budget was minuscule, but I found that once I got the hang of it, we would quadruple our money every month. If I spent $100, we made $400 in sales.
AdWords is based on google searches. The facebook ads sound even MORE powerful with their ability to tightly define who sees your ads.
What a great experiment! Thank you for sharing all that info with us. 🙂
Stacey Trock said
Thanks for doing this!
Did your advertisement go to a facebook ‘fan page’ or planetjune.com?
I have to admit, I’ve never quite gotten facebook to work for me (in a business sense)… I have a ‘fan page’ for FreshStitches (my site). But, it’s impossible to find. I can’t even figure out how to get my ‘fan page’ to come up when someone searches for ‘amigurumi’… which I think would be fairly important to get it off the ground. I have a feeling that I’m missing out on how to use facebook… I mean, pages like Stitch Diva (on facebook) have oodles of fans, and they run contests and such off of their facebook page. If I could sort out how to get that up & running, then I think it would be a great tool…
However, if the ad linked directly to your site, then it would be more worthwhile.
I’ve had wonderful experience with the Ravelry advertising, I think it’s great value for your money ($10/month)
thanks for all the research!
Jo said
Thanks for doing this! The experiment has given some really info, even for those of us not quite at your level (I’m so jealous!).