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I have been dabbling with Facebook Ads for some time for a class project, and I thought about jotting down some of my experiences.

Facebook Ads v/s Google AdWords

The first question that arises whenever you thrown in a new product into a crowded field with established products is “How does it compare?” In this case, the obvious comparison is against Google AdWords. The difference is also obvious. Facebook lets your target your ads much better than does Google. Both services let you target based on geographies, but on Facebook, you can target based on many other parameters. For example, you can show your ads just to those in high school, or in college. You can choose your audience based on their (disclosed) age, gender and interests.

This level of targeting is awesome if you have a product or a service that specifically caters to your audience’s needs. To put this in perspective, think of a family watching prime time TV, and each member sees a different commercial – like the parents see an ad on Cialis, and the children see an ad about Xbox!

But Facebook exacts a premium price for this kind of targeting. While you would normally pay less than 5 cents for a click on contextual Google ad, Facebook’s suggested bids for most targeted ads is around 35 cents; and 60-70 cents isn’t an uncommon suggestion either. So while Facebook helps you reach your intended target, it does make you cough up for it.

Make a bigger impression!

The other advantage of Facebook ads is the number of impressions – that is, the number of times your ad is shown. Probably because there aren’t as many advertisers hawking their stuff on Facebook (compared to Google), you will find that your ad might crank up over 100000 impressions in a day, if you care to pay the suggested price. Ours did, and we were targeting only high-schoolers and college-goers in the Delaware Valley region. Compare this to a meagre 500 impressions per day on Google!

Bid price gaming

While impressions and clicks are fine, we were still worried about the cost per click on Facebook. We were only conducting an experiment, and 35 cents a click or more is a princely sum in the world of online advertising. We progressively drove down our maximum bid price for a click. For one ad, we went from 62 cents down to 17 cents. The max bids for our other ads were also in the 20-cent range.

Surprisingly, the impressions DID NOT come to grinding halt. Facebook was still serving our ads, but only at a slightly reduced rate. I don’t have enough metrics to conduct a detailed study on price elasticity, but suffice it to say that we did not feel that our revised max bid rates greatly affected the serving of ads. Interestingly also, for those ads which we bid 16 or 17 cents, we see a “Price too low” warning, but these ads are being served up nevertheless!

The long and the short of this is that Facebook is a fabulous advertising medium if you have a great product or service, and you want to pinpoint your target audience. Though it compares unfavorably with Google in terms of pricing, you can expect a significantly higher number of impressions. And you would do well to bid lower than the suggested range, and adjusting your price depending on the rate at which your ads are served up.

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6 Comments on Thoughts on Facebook advertising

  1. Yogaesh says:

    Interesting comparison. But Google’s reach is much more than Facebook and honestly it is the power of Google search that pumps in money into their business! Faceboook might be good for specific type of products like the ones you mentioned but unless FB expands on a larger scale, it’s not going to go anywhere near Google!

  2. Thejo says:

    The number of impressions isn’t really a big deal. How many unique users do the impressions reach. The page views / user is bound to be far higher on Facebook. They may want a high CPC, but my guess is that it’s just wishful thinking on their part. Facebook fill rates (impressions with paid ads / total impressions) are pretty low if I’m not mistaken, that’s why you keep getting impressions served even if you reduce your bid.

    Also, what happens if you keep doing the same search on Google. Do they keep showing the same ads (not likely)? Do they charge the advertiser if the same person clicks on an ad more than once?

    BTW, you’re still serving a partial feed.

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  4. EntireStore says:

    I lowered my bid on an ad based United Kingdom down to $0.07
    and it was still getting pretty enough impressions.
    But in another ad for United States, I couldn’t get much impressions with $0.40 bid..
    Conditions really change

  5. Biju George says:

    Hi,

    Just created my first facebook ad.

    Was wondering how to bid.

    What about starting with a very low bid and then going up based on the performance? That’s what I’m going to try.

  6. Hello,

    Is bidding price of Google and Facebook same?

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