For the report, 347 Facebook advertisers were surveyed, and the results were analyzed by leading industry experts from Likeable Media, WebTrends, Buddy media, BlitzLocal, and Social Fresh. The follow is a recap of some of my favorite sections of the report.
Why Do Companies Advertise on Facebook?
- Brand awareness
- Audience Growth
In addition, companies set their advertising goals based on these same four reasons.
The most popular reason that companies decide to advertise on Facebook is to increase brand awareness, with 61% of respondents selecting this as their top deciding factor. In comparison, the most popular goal for their advertising campaigns was to grow their Facebook audience.
Ad Targeting Criteria
The Facebook advertising platform is truly one of a kind, offering targeting options that no other online advertising platform can match. Advertisers have select number of main criteria to choose from and an extended network of additional sub-criteria, sometimes making the selection process seem quite daunting. The following are the top 15 targeting criteria that the surveyed advertisers used when creating their Facebook ads:
One of the most interesting findings regarding targeting criteria was that gender ranked in the bottom half of the list. This seems odd because it is a straightforward targeting option that could have a positive impact on an ad’s click-through-rate. Even if a business’ product is gender neutral, the ad creative may lean more towards a female or male audience, making this targeting criteria a simple yet important choice.
Based on the report, location appears to be one of the most desired targeting options, with over 1/3 of advertisers targeting users by state or city. However, I did find it peculiar that less than 20% of Facebook advertisers target users by zip-codes. Targeting by zip-codes is a very useful option for small and local businesses looking to increase sales, brand awareness, audience growth, etc. In addition to the gender criteria, zip-codes appear to be a very under utilized targeting option.
Connections would appear to be a very powerful criteria for advertisers to use when creating an ad campaign, as consumers are more likely to trust the opinion or suggestions of their friends or connections, but it is one of the least used criteria. The report shows that almost 65% of advertisers are not frequently using the connections criteria when selecting targeting options for their ads. However, the report explains that there is a large quantity of secondary criteria that is goes into connection targeting, possibly resulting in a lack of understanding by advertisers on how to do connection targeting or they may become overwhelmed by the vast amount of options.
Using Audience Segments
Over half of the advertisers surveyed target between 2 and 5 different audience segments with each ad they run. Additionally, almost 14% of advertisers employ a more selective targeting approach, using 6 to 10 different audience segments.
The Creative Side of Facebook Ads
Facebook ads have both character and image limitations; therefore, it is very important to do split testing to determine the ads that will best connect with target users. Advertisements can be tested to determine how different images, headlines, ad copy, landing pages, and targeting criteria affect the click-through-rate, so that more effective ads can be designed in the future.
Furthermore, it is also very important to refresh ad creative on a regular basis.
37% of advertisers rotate out ad creative every 5-14 days and 31% of companies update or remove their Facebook ads every 1-4 days. The report explains that the average Facebook ad has a peak click-through-rate during the first 72 hours after going live. Therefore, the longer the same ad stays up the more an advertiser will end up paying per click. It is more effective to consistently rotate out ads to help keep the cost per click lower.
Facebook Ad Metrics
Facebook offers two pricing options CPC (cost-per-click) and CPM (cost-per-thousand-views), of which the majority of respondents said they preferred the CPC pricing option.
In addition, they found that the average CPC for Facebook ads was $0.80 per click and the average CTR (click-through-rate) was 0.041%.
I highly recommended checking out the full 2012 Facebook Ads report at Social Fresh to learn more about the different items I discussed, as well as:
- Sponsored stories
- Adoption and growth of Facebook ads
- Ad management software
- Agency and vendor partners
- Facebook ad representatives