May 19th, 2012
Early this week, I wrote a blog post for a client about General Motors’ announcement that it was no longer going to advertise on Facebook. In gathering information for the post, I came across a story about a new business that advertised on Facebook and thought their experience could provide insight for those who may be navigating the waters of social media advertising.
One of the best “real world” examples of a company’s experience with Facebook advertising was a broadcast from NPR’s Planet Money Team entitled Pizza Delicious Bought An Ad On Facebook. How’d It Do? The company was Pizza Delicious, a newly opened New Orleans take out window that serves New York style pizza, who bought a Facebook ad to see if it could attract customers to their new restaurant opening soon.
Here are a few things they experienced:
- They hired a social media ad guru in California to help them to do this properly.
- They designed an ad targeting “friends of people who ‘liked’ Pizza Delicious.” Facebook analytics showed that this was 224,000 people.
- They then narrowed the scope and focus of their demographic to a New York connection = Knicks fans. This cut the reach to 15,000.
- No one clicked on the ad, and because Facebook gets paid by the number of clicks, it shut it off.
- They changed course by dropping the Nicks fans and changing the target to “pizza in New Orleans” adding words such as mozzarella, espresso and ice cream. The result: 20 times the Facebook fans in 2 days. For the ad, they paid around $1 per fan = @$240.
- These ads went viral and yielded twice as many click throughs.
- 1 person responded to their ad and contributed $10 to the new restaurant giving them a return albeit very small, on their ad investment.
Was it a success? Well, that depends on what you are measuring. Because social media advertising is still too new and untested, no one can be sure (yet) about the conversion from Facebook fans to buyers. Companies like General Motors didn’t see the value of Facebook ads believing their advertising dollars are better spent in other advertising mediums such as TV. However, other companies such as Subaru and Ben and Jerry’s tout their success claiming that social media has helped their brand and it drives more traffic to their website. This success comes from them better job of targeting customers in their ads; something that GM perhaps wasn’t willing or prepared to do.
One thing is clear, social media advertising functions differently than traditional advertising campaigns. It relies on “word of mouth” suggestions from “friends” that influences choices of how people spend their money. Facebook offers 900 million potential “influencers” to advertisers, making this an attractive proposition. However, to do it well means understanding the nature of social media. In Pizza Delicious’ case they knew they needed help and hired an online social media marketing expert who helped tailor their ads for their demographic and made targeted changes to find their best customer base.
With Facebook going public, it’s clear social media advertising is here to stay. Do you think it’s worth it? Would you buy a Facebook ad for your business? Reply to this blog or Tweet me @themares1 – I want to know!