These days, it seems everyone and his mother has a Facebook page. In the U.S., about 100 million unique visitors flock to the social network every month. Many business owners are among them, using Facebook profiles to promote their companies and create customer communities. For some entrepreneurs, social networks have also become a useful advertising platform. Ellie Sawits, CEO of Frutels, a New York City–based maker of chocolate candies used to treat acne, says ads on Facebook are an affordable alternative to the high pay-per-click rates for acne-related keywords on Google's AdWords. "For me, the economics of Google just don't work," she says. But it's not easy to make your ad stand out among the Facebook status updates, party photos, and comments. Here are four tips to help you get started.
1. Choose your target
People who use social networks often divulge a plethora of personal information in their profiles, which can prove useful to advertisers. Facebook lets you pick and choose which groups you would like your ads to reach. Companies can target ads based on a user's profile information, such as age, gender, location, college, relationship status, and interests. You can choose to target people who are fans of your company's Facebook page or friends of your fans. Or avoid your fans altogether, if your goal is to broaden your pool of customers.
You can also advertise only to Facebook users who mention certain words in their profiles or status messages. For example, Howie Goldklang, co-owner of The Establishment, a hair salon and spa in Milwaukee, occasionally targets young women in Milwaukee whose pages mention the names of pop stars such as Justin Timberlake and Lady Gaga. Zeroing in on a specific audience lets you get the most bang for your advertising buck, but be careful about narrowing your focus too much. When Chris Lindland, founder of Cordarounds.com, a clothing site based in San Francisco, attempted to target specific colleges in an ad campaign, he didn't get many clicks. "I thought there was a chance to cordon off influencers in some way," he says. "But I had to realize, everyone wears pants."
2. Test, test, and test some more
Ad prices on Facebook are determined by auction, as they are on Google AdWords. You can pay based on either the number of times people see the ad or the number of times people actually click on it. The majority of Facebook advertisers choose the latter, says Tim Kendall, Facebook's director of monetization. Still, it's worth testing both payment types to see which is more cost effective, says David Berkowitz, senior director of emerging media and innovation for 360i, a digital marketing agency. He suggests spending about $20 or so for a small ad buy using both methods. "It's incredibly cheap to run tests," says Berkowitz.
Testing various target demographics is also a good idea, says Adam Golomb, the head of e-commerce at Eat'n Park Hospitality Group, a Pittsburgh-based company that runs a chain of 76 restaurants. Golomb launched an ad campaign last spring, hoping to draw more visitors to Eat'n Park's Facebook page, where the company posts surveys, contests, and coupons. In testing, Golomb found that an ad targeting women performed better than one that targeted both sexes. "The click-through rate dropped dramatically when we went out to both," he says. After he began advertising only to women, the company was able to add nearly 1,000 new fans over a two-week period.
3. Do your own tracking
Facebook keeps tabs on how many times your ads are shown and the number of clicks they receive. But it doesn't track what users do after they click -- did they make purchases or just browse and move on? That's the largest drawback of Facebook's ad service, says Lindland of Cordarounds.com. "Return on investment is not immediately trackable," he says. Facebook's Kendall says the company is working to include more information in its reporting tools. Until that happens, it's critical to do your own tracking. "The beauty of microtargeting an ad buy based on location, age, and sex is the data you're going to get out of that," says Michael Kahn, senior vice president of marketing at the digital marketing firm Performics. "To not take advantage of that would be a terrible waste of an opportunity." Sawits of Frutels uses two analytics programs: Google Analytics, which is free, and HitsLink, which starts at about $10 a month, to track which Facebook ads result in purchases. Sawits, who spent $50,000 on Facebook ads in 2009, says her rate of return is about 2 to 1.
4. Make your ads pop
Companies write their own ads, which may include a short headline, ad copy of 135 characters or fewer, and a small image. Ads must be crafted carefully, because it's tough to get noticed. Typically, three ads from different advertisers run next to one another. And, of course, there are photos and messages from friends that compete for Facebook users' attention. "It is a social network, so if you put up a traditional ad, you're going to be pushed to the side," says Goldklang. Edgy advertisements, he says, seem to work best for his hair salon, which caters to a young clientele. One advertisement that performed well last year proclaimed, "Springtime is here. Time to get waxed." "I find just being irreverent and trying not to write in traditional copyspeak connects us the best with potential clients," Goldklang says. Since he started advertising on Facebook a year and a half ago, the number of new clients who discovered the salon online has risen 20 percent.
Facebook will reject your advertisement if you use an image that is deemed too risqué or language that is deemed offensive or lewd. But it usually pays to push the envelope. Sawits says one of Frutels's Facebook ads that includes a photograph of a woman licking a lollipop gets the most clicks.
For Facebook's list of common advertiser mistakes, go to facebook.com/ads/mistakes.php.