The Future of Advertising on Facebook

Written by Zac Johnson
social social social
Facebook Advertising

Going into this year’s Affiliate Summit West, I wasn’t looking towards anything spectacular and didn’t have any big aspirations. I was excited about being on the “Advertising on Facebook” panel, but had no idea how beneficial it would end up being.

During the first day of the summit while walking through the meet market, I was surprised to see that Facebook had their own booth, along with plenty of staff members from the company. Not only were these members from Facebook, but they were actual team members from the Ads department and they actually understood the frustrations we have been experiencing with the Facebook approval process and their advertising platform.

I met with almost all of the members from the company, but spent the most time with Alex Shultz who is the head Marketing Exec at Facebook and also has a deep background in affiliate marketing. While in the meet market we ended up talking for about an hour and it was great to hear about the changes to come.

The next day Alex Shultz, Dan Murray, Myself and Shoemoney were on the “Advertising on Facebook” panel. The room filled up quickly and ended up with standing room only. In addition to answering plenty of Q&A from the audience, the following points were discussed.

– Shoemoney briefly talked about how he is using Facebook Ads for local advertising and driving leads for car dealerships and dentists in his area. This method of advertising is extremely new and lucrative because barely anyone is doing this.

– There is a misconception by some that Facebook has a “college crowd”, but this is so far from the truth. There are currently over 150 million members on Facebook and some of the fastest growing demographics are over the age of 25.

– Facebook members from NON-US countries are one of it’s fastest growing areas, with Italy recently leading the way. Foreign clicks are cheaper along with less saturated.

– When setting up a new campaign, make sure to test multiple images and text headlines. Alex mentioned that the TEXT headlines of ads actually factor more in the overall CTR than the image used.

– While other social networks may start at .10 or .25 per click, it is possible to receive clicks in the .02 to .04 range. Price factoring comes down to a click through rate and cpm process. Continually tweaking and improving your ad campaigns for a better click rate, will result in lower click costs.

– Cloaking links is not fooling anyone at Facebook. They are aware of “black hat” methods and are in the process of taking actions against these advertisers and accounts.

– When Alex was asked what offers he would run on Facebook to make money, he said “dating” and “weight loss” offers are always in the top performers.

Overall. the “Advertising on Facebook” panel went well. More than anything else, I was thrilled to see Facebook made the effort to attend and put themselves out there to get real user experience stories and feedback. They know the ball is now in their court and they have made mistakes in the past, but are working to improve the system. There is no easy fix and this will take time, but improvements are on the way.

I know Alex and the Facebook team will be looking over the comments in response to this blog post, so please feel free to leave any comments, complaints or improvements you feel would be useful.

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38 Replies to “The Future of Advertising on Facebook”

  1. Zac, thanks for the write up. Much appreciated since I couldn't be at ASW09.

    As I said on our panel at Affiliate Summit Social Media, until Facebook can get past dating and weight loss (or broadly, personal improvement), it's not a great place for most advertisers. Being able to micro-target, even at very low CPMs, isn't profitable if users won't click with intent (and I submit that many ad clicks on Facebook are accidental, given the bounce rates and time on page metrics that we see).

    I still say it's easier to interrupt users on MySpace (even with the terrible Flash-based myAds program) with a broader range of offers than it is on Facebook.

    I love Facebook – we even give people bonuses on their Seller Rating on Dawdle.com when they link their accounts – but they've got to do better than what they have done to date.

  2. <a class="replyTo" href="#comment-96966" rel="nofollow">@Sachin Agarwal:

    Thanks for the feedback Sachin. I've had awesome success on Facebook and some campaigns with very high ROI ranges. The main concern for myself and my other affiliates, is the approval process. We know how to make profitable and quality campaigns, and are willing to spend several thousands per day… it's just a matter of Facebook getting the approval process down pat and in a consistent matter.

  3. So, when do you think the approval process will get better?

    I am one of those ready to spend thousands, but can only get 1 out of 5 approved… Wtf?

    Although, I turn a great profit with my small amount of ads…

  4. When are they going to quit declining all of the dating and diet offers if they are the best, ha.

  5. I have the same question as browie asked above…

    If they say dating and weight loss offers are the best why do they keep denying them?

  6. Thanks for the heads up. Hopefully, the changes Facebook make in '09' are for the better…

  7. I think the Facebook advertising platform will be very profitable for those who know how to utilize it's struggle most effectively, first

  8. Facebook needs to work on their ad approval times, especially on weekends. Having to wait in some case 15+ hours for an ad to be approved is a headache.

    They also need to make sure their editors are all following the same guidelines while approving or disapproving an ad. I've come across the situation where I set up an ad and have it approved, and then set up the exact same ad a week later only to have it disapproved.

  9. Hi Zac,

    I was in the Facebook Advertising session at Affiliate Summit West 2009, and enjoyed the transparency of Alex and his Facebook associates in accepting the negative feedback graciously.

    Alex assured the attendees that Facebook was well aware of the issues in ad approval you have stated, and they are promising to address each one as soon as possible.

    With any new platform like Facebook ads, a certain amount of 'live bench testing' reveals the bugs and forthright people like Alex are solving these problems today.

    Thanks for speaking with me after your panel, you always provide useful information regarding your experience. Thank you!

    Respectfully,

    Nicholas Chase

    Chase Marketing
    http://www.twitter.com/nachase

  10. Wish I could have made the panel! Sounds like it was a great one. Thanks for the recap though Zac.

    And of course I agree with the others that there needs to be some major changes to really make Facebook a premier ad platform. But it's definitely possible. Hopefully Alex takes the concerns to heart and has the power and insight to fix it.

  11. Hey man, Thanks for the write up. Really helped with the new way things are going!

  12. I've been looking into advertising for a few of my websites on Facebook. This is great information on it. Always saw Facebook as the college student social network but good to hear that over 25 year olds is becoming a fast growing demographic on there.

  13. Advertising on FaceBook is quickly becoming profitable. First people didn't click on them because they're too busy chatting, but now they do. So I wonder what changed. Or are they displayed differently lately? I don't know, but it seems like the right technique has been used.

  14. Thanks for the great summary of key points in this presentation. Your points were thorough and clear. As someone who could not attend the event, I am especially grateful to learn the valuable information that was shared.

  15. Hey Zac,

    It was great seeing you again in Vegas. In retrospect I wish I took you up on your poker offer. This sessions was one of my favorites. I was able to ask some questions to Facebook people and getting ready to start some campaigns. Really looking forward to growing with Facebook now.

  16. Thanks for this post Zac. I was thinking about using Facebook for advertising but haven't gotten around to it yet. Hopefully, they'll get this approval thing fixed. That's one of the best things about Adwords even though I rarely use it anymore – immediate approval.

  17. Great post Zack. You really "snuck" in some great content and tips on using creatives and niches to test on Facebook. Anyway, thanks for the tips.

  18. Great post. I didn't really know much about Facebook advertising but hey, I do now! I do know how big Facebook is and its member base though. Maybe I will profit from it soon as well!

  19. Hey Zac, thank you very much for this post. Few of the the bullet points cover some really interesting facts for people looking to advertise not only on Facebook, but any social networking site.

  20. i never advertise my product in facebook.

    but maybe i'll try it later..

    thanks for the information.

  21. Good article….and you're right…not many people know how to advertise a local business on Facebook. For those that can show advertisers how to do it, the upside is very good.

  22. I have to say that there would need to be Obama-esque sweeping changes to their advertising system if they are going to have it work.

    Most advertising systems that are useful tend to only make money off of a short-tail. I have been advertising local businesses ( of my own and others ) on Facebook for years ( I miss Facebook Flyers ). Businesses that are offline ( dentists, car dealerships ) have such a huge range of solutions available, and the middle-man advertisers don't see these networks as viable solutions.

    One reason is that most of the people who are selling solutions to the busines aren't privy to the intricate matters in marketing within these social realms.

    The people who are tend to follow the "word-of-mouth" online grassroots campaign, and none of this ever reaches the business consumer.

    The 2nd problem lies within their limited advertising solution. Although it replicates Google in a way with the limited lettering, the psychology of these spaces don't permit the same type of response. It is the equivalent of seeing a movie preview on tv and a movie preview at a party. Google is in itself a sort of evolving data directory, where Facebook is not. So I am still surprised they set up their ads that way.

    A third is their lack of use for crossing information and expanding solutions to the grassroots crowd on Facebook. Their are a lot of issues with how they set up their groups and mailing lists. I know its because of the initial design and security and the whole shebang, but there is a lot of money that could be made with developing their core functions and setting premiums to other functions alongside them.

    If I don't see certain sweeping changes by August, I will bet the farm they will have big revenue problems down the road ( Not everyone is going to try to become experts at their ad system and luring customers. They will flock elsewhere). If Facebook would come see me, I would put them over the top.

    PS: Also peeved they have these bogus "eye" and "make money" ads bursting through, and my ad for a Chinese restaurant was disapproved. In all honesty, their ads worthiness is comparable to a childs sports team blog. I seldom see something of worth, and I try my best to look to my right. But like Beyonce, I always go back "to the left, to the left."

  23. I am doing some advertising on Facebook, and I have a very low CTR for my ads. But who cares? If I am paying per click, why does my CTR matter? Would I get a lower cost per click if my CTR was higher?

  24. Hey Zac, thanks so much for that insight into face book. I never knew face book had such huge potentials for marketing. Always thought differently.

  25. Thanks for the insight into the meeting. I advertise with the major search engines, with the best results coming from Google, but after reading this, I may try Facebook.

  26. I've tried to use Facebook ads to promote a CPA offers but always got rejected, this facebook marketing is a mystery to me.

    Mikey

  27. Hey Zac,
    very nice and good interesting facts about Facebook advertisements and future.

  28. Yes I agree that facebook is one of it’s fastest growing areas, with Italy recently leading the way. Foreign clicks are cheaper along with less saturated.

  29. I think present social media marketing networks are narrowing some of the ways to advertise! These networks are actually deciding what advertisers/ marketers have to do in spite of the fact the ads are paid! Of course there should be standards in any marketing channels but such kind of features really take us into their control ! And yes I should also agree the fact that they are now one of the leading marketing methods to any business.

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