There’s so much hype around Facebook right now that it would be easy to think that they are an immediate threat to Google’s business model, but the reality is that they’re not even close. Not only does Google still make at least six times more revenue per user than does Facebook, but Facebook’s advertising model is still very much a work in progress.
A report from Webtrends this week underlined this point with an eye-catching takeaway: Facebook advertising has a very short effective lifetime. Over an aggregated 11,000+ campaigns the authors found that CTR dropped by half within 48 hours of an ad going live. CTRs of 0.2% could be achieved pretty regularly for highly targeted ads during the first few hours, but reduced quickly thereafter. The decline would continue over a period of a few days until finally CTR became so low that Facebook killed the ad.
Webtrends released their report on Facebook advertising performance earlier this week. It presents data accumulated over more than 11,000 campaigns that served over 4.5 billion impressions. There is a lot of detail in the report itself (available here for free download but unfortunately a dead link at the time of writing).
Now Webtrends benefits from a lot of intelligence in running Facebook campaigns. They build and sell their own analytics tools and they white-label campaigns for other agencies. They know their stuff and so their results are likely to be better than those for a typically "average" Facebook advertiser. As a result they were able to present 523 million unique impressions, meaning that they only served an average of nine ads to each user – this is a much reduced number than we have heard of being achieved in most other Facebook campaigns. And Webtrends recommends that using friend-of-fan and non-fan targeting to keep ads alive a little longer: these techniques bring in fresh users as they join and also help to avoid users that are already friends.
Facebook Advertisers vs. Google
All of this means that Facebook remains a terrific ad platform for ads that benefit from demographic targeting – at least until the next Acai-type products come along that can be thrown against the wall of the entire world population. But Facebook advertisers have to work harder than those who can make their campaigns work on Google or other search engines. Search ads can run for months with little change because they’re only presented to new users searching on a keyword.
Revenue Performance Recommendation
So there is the choice: spend time on optimizing a PPC campaign and let it run and run, or go for Facebook and create fresh ads every few days. Both techniques work, but if you’re using Facebook you can’t just create one ad and let it sit there if you wish to succeed. More here.