How Effective Is Facebook Advertising?

For small businesses, every dollar that they put into their digital marketing counts. And, with so many ways of reaching your ideal audience, you may be asking yourself: should you advertise on Facebook?

Facebook is a giant platform, there are no questions about it. It has 2.74 billion monthly active users and it’s the world’s third most visited website (after Google and YouTube.)

Because Facebook is such a massive social media channel, you may worry that your ads might get lost in all the noise. Simply put, you don’t want to waste your precious advertising dollars without anything to show for in the end.

So, is Facebook advertising effective and worth the investment?

The short is yes, Facebook marketing works and it’s an excellent way to grow your business. But, to help you understand why Facebook ads are effective, we will explain first how Facebook advertising works and then how to measure the success of your Facebook ads campaigns.

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How Facebook Advertising Works

It’s important to understand the role of Facebook ads in your digital marketing efforts. Unlike Amazon or Google, where consumers usually have a clear intent (to buy something or to search for information on products or services,) Facebook is mostly used for entertainment purposes. We scroll through our News Feed to see what our friends have been up to lately or to post content about ourselves or our interests.

Understanding how people use the social media platform is crucial in ensuring that you will create a Facebook ad campaign that not only targets the right audience but does it the right way.

To create an ad on Facebook, you will need first to set your objectives. Log into your Facebook Ads Manager (you will need to have a Facebook business page to be able to access the Ads Manager) select the Campaigns tab, then click Create. You can choose from 11 marketing objectives, depending on what you want to achieve:

• Brand awareness
• Reach
• Traffic
• Engagement
• Video views
• Lead generation
• App installs
• Conversions
• Messages
• Store traffic
• Catalogue sales

If you opt for lead ads (ads that focus on generating conversion) you will pay for the action (every time someone clicks on your ads.) But, if you opt for traffic or engagement ads, you will pay for impressions (every time someone sees your ad.)

Now that you know what the goal of your Facebook ad campaign is, it’s time to select your audience. Facebook has one of the most detailed targeting options that allow you to create the profile of your ideal audience. You can choose from thousands of custom audience parameters and create an audience profile that is the most likely to react to your ads. In addition to the basic demographic data, such as age, location, education, you can also target your audience based on behaviour, interests, or connections. You can also create lookalike audiences based on the criteria that you choose.

Next, it’s time to choose the ad placement and then create your ad. First, you will have to choose the ad format, such as carousel, video ads, etc., and then add your copy and media components. Keep in mind that Facebook ads are more visual and must fit with the scrolling experience, especially when it comes to mobile devices. Make sure your ads stand out, are engaging, and have a clear call to action that tells Facebook users what you want from them.

The Bidding Process

Facebook uses an auction system similar to the one of Google to decide which ads to show to which users. But, unlike Google, Facebook evaluates ads a bit differently: based on their competitive value.

The competitive value of a Facebook ad is calculated as the sum of how much the advertiser is willing to pay (the maximum bid) and the intrinsic value of the ad (likes, comments, etc.) It’s not really known how Facebook determines the intrinsic value of an ad, but the social media giant claims that it takes factors such as clicks, likes, shares, and the feedback the ad receives into consideration.

So, What Makes Facebook Advertising Effective?

The numbers are very clear: Facebook advertising works. One report found that due to Facebook’s detailed targeting options, businesses have been able to reduce their customer acquisition costs by 73%. Moreover, consumers that like a Facebook business page are 79% more likely to make a purchase from that brand.

But, what exactly makes Facebook so effective?

1. Its Size

As mentioned earlier, Facebook is simply giant. No other platform can offer this kind of reach or market penetration. And, because Facebook is so widely used across the globe, it’s easier for advertisers to customise their ads and target their audience based on demographics, behaviour, interests, and so on. While the sheer size of Facebook may make it seem like your ads will get lost in the noise, Facebook’s targeting capabilities will ensure that your ads are actually delivered to the right people.

2. Its Targeting Options

One of the things that make Facebook such an effective digital marketing tool is its targeting capabilities. The parameters are so detailed that you could probably target the President of the United States with your ads. Unlike other advertising channels, with Facebook marketing, you can ensure that your ads will truly get to the people who are most likely to take action after seeing your ads.

3. Various Ad Types

Facebook also offers tons of different ad formats that allow you to target your audience in the most effective way. If you are an eCommerce business, for example, then you can opt for carousel ads and feature different products that your target audience can scroll through. Or, if your objective is to boost your engagement, you can opt for a page post engagement ad type and encourage your audience to interact with the ad through comments, shares, and reactions.

4. It’s Great At Converting Prospects Who Are on the Fence

Facebook is also an excellent tool for remarketing prospects who are on the fence. One of the reasons this strategy works so well is that the visitor has already interacted with your ad and seen your landing page. You can try to convince them to convert by offering a discount, for example, or simply reminding them about the products that they’ve recently viewed.

How to Measure the Success of Your Facebook Advertising Efforts

Facebook is an effective platform for reaching your audience and pushing your products or services, but you need to do your part too. But, how can you tell if your Facebook ad campaign is effective?

Here’s what to measure to determine the effectiveness of your Facebook advertising.

1. The Conversion Rate Ranking

This metric will show your ad’s expected conversion rate will compare to the conversion rate of other Facebook ads with the same goals and audience as yours. Simply put, this metric will tell you how likely someone who sees your ad is to convert.

2. Cost-Per-Click

The cost-per-click tells you how well you’ve targeted your ads. If your ads have a high CPC but a low click-through-rate (CTR,) then it may mean that your audience isn’t finding what they are interested in and are leaving quickly, without taking any action.

3. Click-Through-Rate

A high CTR is usually a sign that you’ve done a good job with your Facebook ads and that your audience finds what interests them on your landing page and are clicking through the pages to learn more.

What Next?

If you’ve been on the fence about Facebook advertising so far, then we hope that this article helped you understand better how ads on Facebook work, why they are so effective, and what metrics you should monitor to ensure your ads are meeting their goals.

That said, Facebook advertising requires a lot of work. Well, Facebook marketing in general can be quite time and effort-consuming. It takes more than just sharing your latest blog post with your audience and a few funny pictures to get engagement and grow your audience. You need to figure out the right type of content for your audience, the right time to post that content, and the best way to really interact with and engage your audience.

Australian Internet Advertising Can Help

Facebook is constantly tweaking its algorithm and figuring out what works and what not can be quite difficult for someone who has little or no experience with Facebook advertising. We here at Australian Internet Advertising have the experience, knowledge, and tools to create Facebook ads campaigns that get not just likes and comments, but also conversion.

We are proud to be one of only a few selected Verified Preferred Facebook Marketing Partners in Australia.

Get in touch with us now to discuss your Facebook advertising needs and find out more about what we can do for you.