…Or ‘Why So Many Traditional Advertisers Fail Online’

This story by BBC journalist Rory Cellan-Jones kicked up a bit of a fuss recently when it turned out that some big brands’ Facebook advertising might not be as effective as they first thought…

The brands in question pay to advertise their Facebook page in order to attract Likes. The problem is that once you delve into exactly who these likes are, it turns out that a bunch of them are fake accounts set up by spammers under false names. Then some brands started coming forward revealing that they were seeing a very low return on investment with Facebook advertising.

Cue uproar.

“Facebook is ineffective advertising”, “General Motors pulls it’s $10M ad spend”, “Why I lost my faith in Facebook advertising” and so on as the bandwagon began to catch speed.

The number of people who were eager to announce that just because these big brands were not seeing a return on their Facebook advertising spend, Facebook could be considered an ineffective advertising medium was amazing.

Rule 1: It’s a mistake to label an advertising medium as ineffective just because your ads don’t work.

Let’s Get Logical

The reason that Facebook and many other online advertising platforms looks broken is because for the first time ever, these big brands are getting real statistics on engagement with their ads. Sticking an ad in a magazine, it’s easy to comfort oneself with the thoughts of the tens of thousands of people that will see the ad, the ‘brand awareness’ that will build up over time and the power of association that will make the readers unable to resist buying this product as a result of seeing it in their favourite magazine. Out of all of those eyeballs surely some will buy, right?

Along comes Facebook and the Internet. Unlike a magazine, most online ad platforms are direct response, meaning they seek to trigger a direct response from the viewer whether it’s a click, like, purchase or opt in. They’re also extremely measurable as you can see exactly how many people clicked, signed up and what the cost is.

Facebook is no different, and as someone who built an entire business from $1,300 worth of Facebook advertising, I can tell you it’s incredibly effective if used in the proper way.

In my mind it’s also the most targeted and cheapest way of niche advertising in history?

But like most cool stuff you need to know how to use it in order to get the result you want, otherwise you end up broke or dead.

Unfortunately for the big brands, they are used to brand building advertising, where a picture of a car in a magazine is thought to sell cars.

Online, this approach is seen for what it is: a giant waste of time and money. The magazine was never measurable, so nobody knew. Facebook is extremely measurable, so it’s obvious.

Online Advertising – the right way

So given that Facebook can actually be an incredibly cost effective advertising medium, what are the best approaches to take?

From experience, here are my favourites:

1. Lead Generation. By offering a targeted audience (for example fans of a brand similar to yours) an incentive, you can collect contact details, build a relationship and make a sale further down the line. Lead generation is a killer direct response strategy and can work staggeringly well on Facebook when used correctly
2. Direct Sales. By pitching a very cheap (or free) product in a Facebook ad, again you can build a relationship with the buyer in order to sell more to them over time. This can easily pay for itself, and generate massive future income as a result of the list you build
3. Special Offers. You can choose to advertise to an existing group of people, whether they’re fans of your company or fans of a similar company. By making an offer to these incredibly targeted people, you are getting in front of those who are most likely to buy from you.

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Measurement and Testing

Aside from the targeting available in Facebook (according to region, demographics, likes & interests etc), the measurement and metrics is the reason I am so passionate about Facebook ads done right.

Where else would you be able to get precise insights into the music tastes of your customers, and refine your advertising to suit the exact profile of someone likely to buy from you? In my Facebook-ad driven businesses, the insights that I’ve had from Facebook into my customers’ profiles have enabled me to slash ad spend whilst still keeping advert results high by precisely targeting who I want – and who I don’t want – to see my ads.

The very worst approach you can take is a ‘one size fits all’ shotgun approach with very little targeting and weak calls to action. Unfortunately for many of the big brands, this was their approach to Facebook and other online direct response advertising. It’s no wonder they couldn’t make it work.