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Despite Decreasing User Activity: Thumbs Up for Facebook Advertising

Despite news pieces and studies increasingly stating that users are turning away from Facebook, there are still about 27 million Brits using Facebook every month which is over 2/3 of British internet users. Nearly no other website can compete with Facebook’s net reach and brands still see a huge value in advertising on the social media site.

Despite decreasing user activity Facebook will stay an essential element in the marketing mix

Despite decreasing user activity Facebook will stay an essential element in the marketing mix

Not just in classic display advertising but also for Facebook there needs to be a clear differentiation between branding and performance. Suitable ad formats can be selected for both objectives. Before going ahead and advertising on Facebook, brands need to decide if the campaign is supposed to drive traffic to its own Facebook page or to an external landing page (internal or external link).

If the objective is to raise the company’s profile, driving traffic to its own Facebook page is often the way to go. Sponsored ads in newsfeeds such as ‘like ad’ or ‘like page’ can take shape in various formats (e.g. text, video, images, surveys and Facebook apps) and the aim is often to increase the number of fans. Algorithms calculate which news is relevant to the individual user and newsfeeds. According to Facebook the average British user has 130 friends. Due to having so many connections the reach only ranges from 16 to 35 percent (there are various studies with different figures). This means that if a brand with 1,000 fans posts something, it is only seen by about 160 to 350 fans. However, advertising this post is a promising option to increase this figure achieving a higher reach and it also enables to target friends of non-fans.

One of the biggest advantages of Facebook Advertising are the targeting opportunities that result from users revealing their data. Advertisers need to think about this valuable data before they start a campaign and determine if they want to increase their fan base, sales or lead generation. In all cases, wastage can be minimised and often a new and unexpected target group can be discovered within the social network. In the past few years, we launched several campaigns and it showed us that Facebook Advertising can lead to a very high performance for certain sectors. When it comes to generating registrations for communities or taking part at competitions, the conversion rates are exceptionally good with Facebook often achieving the best results of all other display options. This isn’t just the case for free offers but also for paid-for services such as tutoring.

Next to lead generation, the social platform can also generate sales cost-effectively. The conversion rate of online shop ads are generally higher for Facebook than for any other display option. Of course, there needs to be a testing phase to find out which targeting criteria attract the suitable audience within Facebook for a particular product. As an advertiser, you need to always think about what the user’s intentions are and why he spends time on Facebook. Generally, Facebook is used for entertainment purposes in users’ free time. Hence, the interest in complex financial products and its success rate is relatively low. You also need to take the creation of Facebook ads into account. An emotional and personal design, addressing the user informally, direct call to action or a targeted question have a positive effect on the click through rate as well as the general click rate. To avoid bored and annoyed users, testing different ads and exchanging them regularly is really important.

Advertising revenue by user geography. Source: Facebook

Advertising revenue by user geography. Source: Facebook

Facebook will stay an essential element in the marketing mix, despite all the news pieces talking about its demise just in time of its 10th Birthday. For example Facebook Ad Exchange will offer advertisers even more opportunities and will push performance marketing even further. And it will no doubt lead to an increasing advertising revenue.

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