Are Facebook Ads Worth It?

With over one billion users worldwide, Facebook is one of the leading social networks. At the same time, Facebook has grown into one of the largest online advertising platforms. Advertising revenues are rising and rising and should amount to six billion euros in 2013. By 2018, the advertising revenues of the social network are expected to grow by up to 19 percent each year. But what makes Facebook advertising really attractive? And for whom is the use of Facebook ads really useful?

With the large number of advertising formats and ad space, Facebook has not made friends with many users. For advertising companies, however, the ads offer great potential and can sometimes have a significant influence on successful (online) marketing and business activities.

Benefits of Facebook Ads

Social networks are based on the principle of mutual interest and exchange of information between users of the network. This is done on Facebook at different levels: The users voluntarily provide profile information about themselves (residence, education, age, gender, relationship status, etc.), embedded in an interest profile, which is staked by Page Likes (musical preferences, movies , TV, books, brands, …) interact with each other through content, posts, likes, comments and the like, or with pages, and so on. So the principle is the pricing and sharing of information about yourself and others, coupled with interaction.

But that’s exactly the big advantage of Facebook ads: Profile and interest information can be used to target very well. The targeting parameters of the ads are manifold:
• country
• place of residence
• Older
• gender
• Interests and extended interest categories (based on likes,
• Interest lists, shared content and user actions)
• Connections (eg address only people whose friends are connected to my site)
• Interested in: All / Men / Women
• relationship status
• language
• Education: All / Graduate / Student / Student

Targeting advertisements and targeting users allows advertisers to significantly reduce wastage. At the same time, new potential target groups can be tested: Which target group constellation reacts to which ad? Which products or services can be advertised particularly well in which target group? These target group tests can thus also be a good basis for further online marketing activities.

Another big advantage is of course the social component of the network, which can also be reflected in the ads. It is well known that people are more likely to deal with things that have been recommended to them by their friends. Everyone knows the Facebook ads, which also show which friend the corresponding page also like. Thus, the above-mentioned basic principle of mutual interest is also transferred to the ads. This increases the relevance of the ad for the respective user and increases the potential for success.

Along with this, there is the third big advantage: Facebook has created ad formats based on user interactions, and thus take up the functions of the network that are intuitive for the users and thus achieve great effectiveness. For example, user posts that contain the URL of your own page can be highlighted and thus achieve even greater reach among your circle of friends.

Usage Scenarios of Facebook Ads

The mentioned highlighting of the advertised URL in private postings is already part of a possible usage scenario. You can cluster different types, which of course can also be combined in the Facebook marketing mix.

Build Like

Many companies, brands and products use Facebook to connect with users through a Facebook presence. The goals of the Facebook engagement can be very different and range from the operation of the page as an advertising channel, as a sales channel, as a discussion or interaction platform to the product or to the generation of knowledge from the customer feedback. Whatever the stated goal behind the company’s presence, without users who link to the page, the Facebook page brings no added value for the operator. Thus, ads are a well-functioning tool to encourage the development of relevant “likes”. This is also shown in the following illustration:

Increasing Interaction and Range

A second usage scenario for Facebook Ads is to increase engagement and reach through ads. Facebook individually selects for each user the posts that they see in the newsfeed. Thus, it may be that Facebook displays the posts of its own page only a part of the followers. The basis for this is the so-called edge rank. Through appropriate ads you can increase the resulting, possibly limited range of your own posts, however, both with your own fans, and beyond. This also increases the potential for interaction, especially if the social component is included in the advertisement, for example, if a friend has commented on the contribution of a page and the corresponding message is highlighted.

Traffic for your own website

Of course, Facebook ads can also be used to direct visitors to their own website. Of course, the targeting helps to attract relevant visitors to the website. Nevertheless, this usage scenario has its pitfalls: It can be seen from the experience that classic website ads often have significantly lower click rates than other ads on Facebook. There are several reasons for this: For example, if the site is not linked to Facebook, the ads will not contain any “social elements” (“your friend likes site XY”). In addition, these ads are played only users of the desktop variant of Facebook and there only “Right-Hand Side”, as in the list of ads right on the network.

Mobile App Marketing

Facebook is one of the most used mobile applications. Seventy percent of participants in the IDC Research Report “Always Connected” use Facebook mobile, 61 percent of them even daily. This large mobile reach, combined with the high intensity of use make Facebook Ads on mobile devices particularly attractive for app developers and marketers. Facebook has even implemented special targeting parameters for targeted mobile devices:

Barriers of Facebook ads

In addition to the advantages and possibilities of Facebook Ads mentioned so far, the barriers of this advertising channel are to be pointed out. Facebook is a social network, whereby of course – as mentioned earlier – the social component plays a prominent role. This leads to the fact that users are indeed active, to exchange themselves among themselves, thereby acting however not with a purchase intention. As a result, Facebook is rarely suitable as a sales channel for products, although various exceptions confirm this rule and Facebook, as already noted, counteracts by various advertising initiatives (for example, retargeting).

Another reason for the relatively poor sales performance of Facebook is the point of the Customer Journey, in which Facebook ads come into play. Here, potential buyers are usually still at the point of “need generation”, while, for example, Google Adwords Search ads at the point of “needs fulfillment” and thus much closer to the purchase can begin. As a result, Facebook can reach relevant reach, accelerate community development and increase brand and product awareness and loyalty, but seldom generate sales.

Another barrier is the emotionality of topics. The social character of emotional issues and related ads can work very well. More sober, less emotional and explanatory subjects, on the other hand, spread less and less often. This, in turn, is one reason why B2B ad engagement is difficult.

Nevertheless, especially for B2C topics outweigh the many benefits of a Facebook presence and an advertisement. Of course, this requires a well thought-out strategy, which should also be embedded in the overall marketing and thus interlinked. Only in this way is there an effective Facebook and marketing commitment. This overview should help to discuss where Facebook Facebook ads can be used.