Facebook advertising is not being done the right way, according to two recent studies. The two studies show the difference between strategies and which one is being used more.
Ad Age reported:
A study from research firm Webtrends last month found that Facebook’s click-through rate declined to 0.051% in 2010, about half the industry average and down from 0.063% in 2009. This means that just one out every 2,000 ads is clicked, even though Facebook’s CPM actually increased during that period.
However, this study lacked one key factor. It failed to differentiate between targeted and untargeted ads on Facebook.
Facebook allows you to customize, in many different ways, who sees your ad. You can geo-target, gender target, age target, target based off interests or page likes, ect. This means dating sites can target single users and ignore the rest. Small bands can use their tour itinerary to target local music lovers. Domino’s can target people who say they like pizza, but even better, it can serve ads to people who “like” Papa John’s, telling them about a new recipe or a lower price.
Study number two shows targeted ads are much more successful in both CTR and engagement.
Blinq Media did a study of more than three billion impressions over a seven-month period, which showed that while the click-through rate of untargeted ads averaged 0.02%, the CTR for targeted ads averaged 0.15%. That’s higher than the industry average for display units across the entire web, and three times the CTR described in the Webtrends study. Targeted ads were also off the charts when it came to engagement metrics, scoring 150 percent, compared to only 22.5 percent for non-targeted.
The best targeting strategy is to make use of member interests on national and/or local levels. Then divide these targets into sub-segments by splitting demographics and genders. Most brands don’t utilize enough interest segments — they restrict their options to demographic and gender targeting too early in the process.
Blinq Media suggests that marketers should “view Facebook advertising the way they view visiting a cocktail party — where the goal isn’t to close a deal, but to come away with a business card.” Getting a user to “like” a brand or engage with it is like getting that business card.
Next time you make a Facebook ad, really think about your target audience.