Facebook Ads Getting More Expensive?
Facebook has all but killed the organic reach of your Page posts, leaving you with no choice but to hope for referrals from content your users share or pay them for exposure.
Now, there are concerns that it’s getting more expensive to advertise on Facebook. The question becomes: is it worth it?
Facebook at least acknowledges that its now harder to get your Page posts seen organically. A couple weeks ago, Brian Boland shared the company’s explanation. He says your organic reach would be worse if Facebook showed everything in the News Feed. You can make of that what you will, but he solutions he offered were basically: advertise, advertise, and advertise some more. Of course he also denied that the organic reach decline is motivated by money.
“When an ad has social context — in other words, when a person sees their friend likes your business — your ads drive, on average, 50% more recall and 35% higher online sales lift,” he wrote. “Fans also make the ads you run on Facebook more efficient in our ads auction. Ads with social context are a signal of positive quality of the ad, and lead to better auction prices. You can use insights about your fans — like where they live, and their likes and interests — to inform decisions about reaching your current and prospective customers.”
In a new report, Flightpath (via InsideFacebook) reveals what it calls an “alarming” decline in paidreach. It says that starting in mid-April, it spotted a significant decrease in paid reach on promoted posts of its clients’ brand pages with cost per reach nearly doubling.
“There is always the possibility this decline in paid reach was caused by minor changes in content and scheduling but for the most part we have followed a consistent campaign strategy since implementing promoted posts,” writes Flightpath senior director of digital marketing John Lee. “It seems highly unlikely that we would see this trend across multiple clients all within the same time frame.”
He notes that while paid reach decreased, engagement levels appeared to remain the same.
“So what does this mean?” continues Lee. “It’s hard to say for certain but it could force companies to dish out even more money to reach the same number of fans. In other words, expect the cost of effective promoted posts to rise (especially as more and more brands start to utilize this advertising option).”
At least Facebook appears to be working on making its ads more effective. The company recently announced that it would start including information about the websites and apps users visit in its ad targeting. I’ve already been seeing ads based on items I viewed on eBay, so they didn’t waste any time with that. That hasn’t translated into a conversion from me, but I’ll admit it caught my eye more than most Facebook ads.
Facebook ad spend might actually have benefits to your marketing campaign outside of Facebook as well. Granted, it was commissioned by Facebook, but a new study from Kenshoofinds that increased Facebook ad spending has a correlation with conversions for paid search. It presents what Kenshoo calls “quantifiable evidence that paid search conversion activity increases as advertisers spend more on Facebook.”
For three groups of people exposed to both paid search and Facebook ads, total conversions increased 19%.
The report says, “The average conversion rate of the exposed groups increased by 11%. By setting the value of the additional conversions generated by this difference against the cost of the Facebook ads, individual marketers can assess whether the additional conversion volume is worthwhile. For example, if every 10,000 clicks yielded an additional 73 conversions, each with a value of $100, an additional $7,300 would be generated by running Facebook ads alongside paid search. With slightly less than a 90% statistical confidence level, we understand this difference to be directional.”
It also found cost per acquisition to be down 10% on average and conversion contribution up 8% on average.
The level of spend on Facebook advertising correlates with the effect on paid search performance, the study finds, but the data suggests there is a minimum and maximum spend ratio. Here’s a look at the “sweet spot,” as presented:
It’s worth noting that Kenshoo also recently released a solution that matches paid slicks to Facebook audiences, so the study isn’t exactly the most unbiased thing in the world, but it’s still interesting.
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