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The Truth About Facebook Ads: Do They Actually Work?

Note: When we first uploaded this post, the content of the article pointed to research indicating that Facebook ads don’t usually work. But since this post was written a little over a year ago, Facebook has made several enhancements to its Ads Products offering that have made us change our position on this topic. Below, we’ve featured an update by Andrea Vahl which goes into detail about how to make Facebook ads work for your business.

As Page owners, we have all seen the declining Reach that our Facebook posts are getting and Facebook is encouraging us to spend more money on Ads.  But the big question everyone has is:  Do Facebook Ads work?

The answer lies in the goals you have for your Facebook Ads.  Many people think that they should be able to sell their products and services right from a Facebook Ad.  And in that case, I say that Facebook Ads rarely work unless you have your targeting set right and are only targeting your warm market (people who know you, who have visited your website, or are on your e-mail list).

Facebook Ads shine when you have one of these 3 goals:

1.    Building your e-mail list by offering something good for free.
2.    Send traffic to your website so that people can read a blog post or get a freebie.
3.    Getting engagement from your current Facebook community.

When you really look at it, these three goals are very similar.  We are using Facebook Ads to connect to targeted Facebook users and eventually get them to our e-mail list.  When we are doing things like boosted post to our own Fans, each post should have the ulterior motive of getting them to our website where they get to know us more and get on our e-mail list (if they aren’t already).

Facebook Ads Targeting

One of the great things about Facebook Ads is that you can very specifically target your ads to your ideal client.  If you know your perfect client is a female 25-35 year old homeowner in Akron, Ohio who likes yoga and the Red Hot Chili Peppers band you can specifically target your ad right to those people.

One thing that is different about Facebook Ads is that you can’t target “buying” words like you can with Google Adwords.  If someone is searching for “best deal on golf clubs” you know that they may be looking to buy golf clubs soon.  That is why selling directly from a Facebook Ad is more challenging.  You are going to be more successful by focusing on list-building and then using your e-mail messages to sell your product.

With Facebook Ads, you can target demographics and interests as well as the Fans of other Pages specifically.  Notice in this ad that was for an author, we were targeting the genre of apocalyptic fiction as well as the Fans of other authors that also wrote that type of fiction.

1

Use things like Facebook Graph Search to find good Pages to target and keywords.  Then set up split testing campaigns to see which demographic responds better to your ad.

Facebook Ads Funnel

I like to look at the types of Facebook Ads that you can run as a Funnel of Familiarity, if you will.  You are moving people down the funnel where they first get to know you into an eventual sale.  I’m recommending that people spend most of their Ads budget on getting people connected to their e-mail list and jumping over the Facebook Like Ads. Getting people to Like your Page is still a good thing, it shows social proof, but if you have a good free offering, it’s better to get people straight onto your list.

2

The great thing about Facebook Ads is that you can measure exactly how much it costs to get someone onto your list.  By using a Facebook Conversion Pixel you can measure when someone opts in to your e-mail list right from the Facebook Ad.

For example, we can see that this ad sent 34 clicks to the website and from there 18 people registered for the free webinar that was offered in this particular case.  Doing the math on this, we get 18/34 which is a 53% conversion rate!   If you are familiar with typical conversion rates on websites, they are more typically in the 5% rate which shows that we are sending highly targeted traffic to sign up for this webinar.

3With Facebook Reports you can get detailed information on click-thru rate, cost per click, cost per conversion, and more.  Now you know which ad is working the best for you.  In this example we did several tests and found one ad out-performed the rest by getting a $0.59 cost per conversion.  Now we can continue to run that ad at a higher budget.

5

Facebook Ad Examples

Let’s look at some great examples where Facebook Ads work well in list-building and lead generation.  In this ad, we were sending highly targeted traffic to a webinar and we were able to get a 58% optin rate.  At the end of the webinar, Donna Moritz of Socially Sorted talked about a new product she was offering and had an amazing return on her investment.

6

Another wonderful thing about Facebook Ads is that they can go “viral” if you are offering something really good.  They can get shared, people tag other people to have them see the ad, and when people interact with the ad in some way, their friends can see that activity.  This is all FREE advertising for you.

7

Offering a free trial of a service can be a great way to use your Facebook ads and this particular ad resonates well with me as a freelancer – it is clearly targeted to my demographic.

8

So to answer the question:  Do Facebook Ads Work?  The answer is yes, when focusing on lead generation or driving targeted traffic to a website.  The question for you is, what can you do with that traffic that is meaningful?  The best thing is to get people onto your e-mail list.

Action Steps for You:

  1. Focus on sending traffic to a freebie that you offer to get people onto your e-mail list.
  2. Set up Facebook Website Conversion ads so that you can precisely measure the cost for each optin.
  3. Look at your reports and analyze which ad performs best for you.
  4. Use your e-mail messages to then sell your product or services.

The bottom line is that Facebook ads work for most businesses when focusing on e-mail optins.  Sometimes the cost per conversion can be higher depending on your offering or your niche.  By split testing your ads, you can bring that cost down.  Give it a try!

About the Author: Andrea Vahl is a Social Media Consultant, Speaker, and co-author of Facebook Marketing All-in-One for Dummies. She was named 50 Favorite Online Influencers of 2014 on Entrepreneur.com. Her Facebook Advertising Secrets course has helped many marketers maximize their Facebook advertising.

  • Theo

    I have had good success with FB ads. You say they don’t work but 5 of 17 (forget the 5 who don’t know and don’t assume an “I don’t know” means no) in your own poll had positive roi success. That’s 29.6%. For my segment b2b local biz the roi outperforms GAW.

    • Hi Theo — Good observation. We’re pointing out that, in general, Facebook ads don’t work, but that doesn’t mean the never work, just that they rank at the bottom. But thanks for pointing that out. Glad you stopped by.

  • venkyiyer58

    Gee, this post confirms something that has been nipping at the heels of by subconscious for a long time now.

    • I think a lot of us have suspected this for quite some time, Venkyiyer58. Agreed!

  • Emeric

    Greaaaat post Jamie, kudos for this one 🙂

    • Glad you liked it, Emeric! It’s stirring up a lot of buzz online, so I appreciate your kind words.

      • Emeric

        I’ve asked Jon Loomer to give you his opinion here 🙂

        • Terrific. I suspect Jon will fall into the group that has been able to make Facebook ads work, but we’ll see. I look forward to his input. Thanks for sharing the post with him!

  • I’m going to have to completely disagree with you, Jamie. Not only does Forrester’s report basically equate to link-bait, but in my own experience Facebook ads outperform almost every other platform. So, I’m going to stick with @cspenn on this one from last week’s Marketing Over Coffee:

    “If you re-scale their charts, the top marketing method if you score it in academic terms would be a 76 – a solid C grade for marketing. And Facebook would have been a 71, so a C-. So, I don’t know about you, but I’m not going to lose any sleep over getting a C- versus a C in terms of academic grading.”

    If you’d like to here the full discussion, it’s the top story here: http://bit.ly/17D2D27

    • Hi James —

      Thanks for stopping by, my friend. I had a feeling this post would get the attention of smart people like you.

      It looks like you’re one of the businesses that has been able to make Facebook ads work. While that puts you in the minority, it does reflect positively on your skills as a marketer.

      Another friend of mine named Adam Naide was able to make Facebook ads work for his company. So we know there are at least two of you! LOL.

      Thanks for stopping by. See you in San Diego in March?

      Cheers,
      Jamie

      • I am happy to be numbered amongst the smartest of your friends, sir! haha

        Yeah, definitely see you in San Diego!!

  • dave

    Interesting, but I think it’s hard to draw conclusions based on the information presented. Are we talking right column ads? newsfeed ads? mobile ads? ads with photos? ads for events? Keeping the Forrester results in context is also important – there is only about a 6% gap between the worst & best value (3.54 vs 3.84). I’m not a statistician, but in <400 responses that may be within the margin of error. So we may also be able to conclude the results show they are all equally effective tools.

    • Hi Dave —

      You make some good points, specifically about the “which ads?” and the “6% gap” issue.

      At the end of the post, I mention that the only way to get a definitive answer is to run a test for your specific company and/or brand, which I suspect you’d agree with. Some people will be able to make them work, but if the reports are accurate, many won’t.

      So … the best approach is to test Facebook ads for yourself and to see if you’re one of the lucky businesses that can make them work.

      Thanks for stopping by. Good comment.

  • Katy Dwyer

    I believe it! I can’t tell you how many times potential clients will say to me: “I have a Facebook page, but I’m not getting any new customers, and I don’t understand why?” Facebook is all about brand recognition and keeping your brand fresh in consumer minds. But I’ve never believed it was the place to find new prospects.

    • Katy, you summed up the post perfectly. “Facebook is all about brand recognition and keeping your brand fresh in consumer’s minds. But I’ve never believed it was the place to find new prospects.”

      Great summary. And I agree with you 1000%. Thanks.

  • Thanks for diving into the nitty gritty facts that most marketing coaches don’t want to admit. Facebook is not a customer acquisition tool, it is a branding tool for businesses. Many small businesses think that if they generate more likes then they will generate more ROI. I see marketing coaches teaching all the time “Get more likes, get more likes”, but the truth is, likes for small businesses needs to be focused on qualitative vs. quantitative. I get ads for small businesses from across the country that couldn’t serve me, and so as you said, they are wasting their money. Those who disagree, generally fall into the statistics of the few who have had success. Thanks again for posting “read worthy” content!

    • Great feedback, Jeremiah. Point well-taken — there’s a lot of waste going on with Facebook ads, despite the fact that a few businesses have been able to make them work. Thanks for stopping by!

  • Hah. I’m sure you know how I feel about this!

    Here’s the problem: Some (many) brands look to Facebook to be a custom acquisition tool only, and not a brand building tool. You can’t do one without the other.

    Facebook acts as a sales funnel. If your investment in Facebook is dedicated towards sales only, you will fail. When used in this manner, it’s the equivalent of cold calling or handing out flyers to people walking by. They don’t know or trust you. So, sure, they will never buy from you and you will be throwing money away.

    But if you use ads in the right way, Facebook can be both an amazing brand building tool and customer acquisition tool.

    Here’s the simple funnel I use that led to a 35X ROI during the month of August:

    1) Use ads to attract highly relevant Fans.
    2) Provide significant value on a consistent, day-to-day basis. Earn trust.
    3) Acquire those Fans’ email addresses in exchange for something of value (ebook, for example).
    4) Sell something that is highly relevant to your audience and the content you’ve been sharing.

    Unfortunately, some (many) brands either jump straight to selling or they focus on getting as many fans for as little as possible. They cut corners by either skipping past providing value and gaining trust or by getting cheap, irrelevant fans who won’t care about their product or service.

    • ^This. Just to pile on to Jon’s point, by executing a strategy with this philosophy I recently created 141 leads with one blog post driven largely by Facebook ads (in the newsfeed – thank you Jon!). So, if I can realize those kind of results in the oil and gas industry, anyone could do the same in any other industry or niche.

      In summary, it’s not the hammer’s fault, it’s the person swinging it.

      • I love this comment because I once wrote a post titled “Don’t Blame the Tool, Blame the Carpenter.”

        • Looks like we’ll have plenty to talk about in San Diego in March. It should be fun. And, once we chat about marketing, we can turn to the only truly important topic — spirituality/religion/The Pope!

          Much to catch up on, my friends.

    • Great input, Jon. Thanks for sharing some of your results and your methodology for making your ads work.

      I also think James’s comment below is spot-on — it’s not the hammer’s fault, it’s the person swinging it.

      Great stuff from both of you. Glad you shared it with our audience. See you in March in San Diego!

      Cheers,
      Jamie

    • Emeric

      @jonloomer:disqus, I knew you’d rock this one 🙂 And I agree, suceeding with Facebook ads is a whole different game than other advertising channels. It takes your expertise to make it work!
      Good input from @JamesHahnII:disqus too!

  • Ron

    Very provocative topic – you are truly a marketer at heart Jamie! One
    observation I have is that to a degree the polls could be slightly
    skewed. What I mean by that – is that to have a true baseline you need
    to first determine if people actually understand how to measure ROI from
    fb ads or social media campaigns, before you ask the question if their
    FB ROI has been effective. Also I have not ever relied upon fb ads as
    “standalone” ads – just like I don’t only solely use “radio ad’s”
    usually the campaigns I am involved with use fb ad’s as part of an
    overall coordinated campaign that uses an integrated marketing approach. I wouldn’t advocate spending all advertising dollars
    on fb ad’s, but I wouldn’t advocate entirely abandoning fb ad’s either.
    Simply blaming and isolating fb ad’s as being ineffective is one thing
    – knowing how to effectively use fb advertising is another. The
    question to me us more about when to use any form of advertising, what
    the goals of the campaign are, how you will measure success and using
    the right media mix and making investment decisions based upon who your
    target audience is and what the goals are. In my experience and in
    measuring ROI on recent campaigns FB ad’s have given good ROI for
    example in marketing festivals and events where I’ve used the fb offers
    feature and tracked discount redemption’s on advanced ticket sales
    through barcodes – but then again fb wasn’t the sole method I used in that marketing campaign either.

    • Hi Ron —

      Your comment echoes what Jon and James said below, which is that FB should be part of a blended/integrated campaign, not just a stand-alone platform.

      Great thoughts. Thanks for sharing. You’re in good company, having been in the same camp with Jon and James.

      Cheers,
      Jamie

  • Paula Hutchings

    Fantastic post – I will be sharing and encouraging all my small business clients to read this. Facebook may have a place within an overall marketing strategy but as a stand alone it doesn’t get results. This was my experience when working for major FMCG organisations before I set up on my own. Completely agree with Katy’s comments also.

    • Hi Paula —

      Great point — that Facebook is fine as part of an overall strategy, but not necessarily good as a stand-alone tool. Thanks for sharing!

  • Ryan Pitylak

    We run a large volume of Facebook campaigns for our clients of Unique Influence and there is a wide gap between the type of campaigns that work well on Facebook and those that do not.

    For example, our mobile app clients do phenomenally well generating installs from highly targeted people. The return needs to be measured over a period of time, since people go back to the relevant apps they’ve installed frequently. The question we solve is whether the revenue generated from those people turns into a positive ROI within a reasonable window of time (i.e. weeks).

    Ads with offers in them also do well. I’m not talking about Facebook’s offer post, which has potential, but rather the method of placing an offer in the actual ad text and image and getting people to visit your site to take advantage of the offer.

    The third type of advertising that does very well is extremely targeted lead generation. If people tend to need the service you offer, but that need is latent and they’re typically not actively searching for it (i.e. wine club, pet club, etc) then the results of these campaigns can be very good.

    • Hi Ryan —

      Great comment. Thanks for sharing. It looks like you’ve got some very good ideas and data on what works and what doesn’t work. Would you be interested in writing them up in a guest post? I think our readers would like to have some tips on how to make Facebook ads work.

      I can be reached at Jamie.Turner@60SecondMarketer.com. Just send me an email and we can open up a dialogue.

      Thanks!

      • Ryan Pitylak

        Absolutely. I’ll reach out to you by email. I write about advertising on Facebook on blogs like AllFacebook, FBPPC, and Nanigans and would really enjoy writing a guest post for The 60 Second Marketer.

  • Greig Whitton

    Shouldn’t the title of this post be: “How to Newsjack Someone Else’s Linkbait”? 😉

    • Funny. LOL.

      Yes, we wrote a provocative headline. Hopefully, we also provide solid data that supports the Forrester findings about Facebook.

      Thanks for stopping by.

      Cheers,
      Jamie

  • Tucker Josh

    I’d like to take the privilege of thanking you for
    that specialized guidance.

    I’ve constantly enjoyed viewing your blog.
    Josh | Country Club San Diego

  • I think I could afford the cost of 1.00 per day
    in order to show my services to quite a number
    of folks on Facebook!
    Namaste’
    Scot

    • Hi Scot —

      Great to hear from you. Glad you like the post. See you again soon.

      Namaste,
      Jamie

  • Jason Broadway

    I don’t understand this article. I can tell that it is important but I cannot process the jargon.

    • Hi Jason — When that happens for me, I’ve found it helpful to print out the article and read it with a highlighter. Give that a shot. It might help. Thanks!

  • Ridwan Harrist

    bottom line is, Fb ads can works for branding! as long its shareable, inspired, cute and etc. after that you can sell almost everything! well, maybe not everything, but my point is, you just can’t sell on fb! because they are not in buying mode! but its good to build costumer base!