Creating Effective Facebook Ads

Nico Brooks

April 11, 2011

Creating Effective Facebook Ads

Everything I Know Is Wrong

As a long-time paid search advertiser, I’ve had to do as much unlearning as learning as I’ve gotten up to speed on Facebook advertising. In paid search, the key to success can be summed up in three words (to paraphrase the cliched real estate adage):

relevancy, relevancy, relevancy

This is in part because AdWords and other paid search systems reward relevancy in ads, moving them up the results. It is also due to the state of mind of the searcher. A person using a search engine is purposeful. She is looking for the answer to some form of question, and does not want to be distracted by superfluous jabber. A well-placed ad that answers her question will perform well, while an ad unrelated to her query will not.

In contrast, relevancy is relatively unimportant with Facebook ads. The mechanics of Facebook advertising do not reward relevancy as Google does. And a Facebook user is much less directed than a search engine user. People don’t go to Facebook to do anything in particular, and so are open to distraction. This means that advertisements that are distracting rather than useful can be very effective.

Take, for example, the raging advertising battle between LivingSocial and Groupon going on in Facebook. They are direct competitors, both running the exact same pointless ads.

Facebook Ads

I’m not quite sure what I’m supposed to “do” in either case, but the truth is much more mundane. With the real deals running today on Groupon and Living Social, I can go bowling or take a three hour walking tour of Denver.

Given my long-ingrained bias towards relevancy, I assumed these guys didn’t know what they were doing. I figured they were just aiming for high traffic numbers like the naïve search advertisers of the early days, without regard for ROI. But recently I’ve started working on some big Facebook campaigns, and recognize the merits of their approach.

Shoot for High Click Through, Low Cost Ads

Facebook ads with higher click through rates cost less and get better placement. Really high click through rates can lead to very low click costs. For example, we have run two ads in the same campaign for the same advertiser, one informational and the other sensational, and the former costs about $2 per click, while the latter costs about $0.20. In Google, cost differences often correlate to the revenue potential of keywords. Some of the most expensive keywords in Google are expensive because they tend to lead to high-dollar sales. But the same cannot be said of Facebook.

Facebook ads rarely lead to direct sales. If your goal is to sell products, Facebook ads will probably disappoint. If, on the other hand, your goal is to form relationships with potential customers, Facebook can be very effective. And we have found that ads that speak to emotion lead to connections, while ads that speak to reason do not. Also, on the whole, ads that have high click through rates also tend to lead to connections. Take Groupon as an example. Groupon wants me on their distribution list, so they can send me daily deals. The ad above is much more exciting than today’s actual deal. Looking at it, I’m left wondering what kinds of deals I might be missing out on. Groupon’s advertising is anything but naïve. Their ads not only have higher click through rates than factual ads, they probably lead to more conversions.

But …

It always ends with a but …

While relevancy and truthfulness in your ad copy may not improve the performance of ads, relevancy in ad targeting does. One of the things I love most about Facebook ads is the ability to target locations, demographics and interests. These are powerful tools for audience building. For example, if you know your customers tend to live in the suburbs and listen to NPR, target those groups.

In summary, let your right (creative) brain take over when creating ads, and try to strike an emotional chord, but put your left (logical) brain in charge when targeting.

Have you tried Facebook advertising? I’d love to hear your opinions in the comments!