02 Jul 2012

Should Your Small Business Advertise on Facebook?

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Conflicting reports have shown Facebook ads to be both an effective and ineffective means for businesses to target their advertising dollars. But despite those dueling findings, small businesses may not want to automatically write off advertising on Facebook, especially if it is done correctly and expectations are managed. A report by Reuters/Ipsos which found that 80% of people said comments and advertisements on Facebook had not led them to make a purchase. On the other hand, a comScore report — which was co-sponsored by Facebook — showed that the ads did help purchases, sometimes as much as 38% over those not exposed to Facebook ads. Despite the different opinions in both those studies, they are both right… in a way.

What Benefits Do Facebook Ads Provide to Small Business Owners?

Facebook ads build a list, just like email or direct mail marketing, but with much more control and data. Compare this to the yellow pages, radio, TV, print where you get the ad, but you do not get the list. With Facebook ads, business owners can create a growing community of potential customers that will be with them for years potentially. Simply put, Facebook ads, when used effectively, are able to benefit greatly from word-of-mouth advertising in a way that other ads cannot. On Facebook, you see other fans of a business or product. You see your friends like them. These things matter and make for more effective marketing. Lastly, Facebook offers more options and data than any other online marketing channel. Ever. I can target an ad to editors that work at BusinessNewsDaily. I can target an ad at hiring managers for The New York Times. I can target people in my ZIP code that love BBQ. The options are endless. That gives a business access to marketing gold and relevance.

How Effective Are Facebook Ads?

First with Facebook, there is less competition for keywords than there is on Google or other pay-per-click sites. One of the biggest benefits for Facebook advertising is that you are reaching your target demographic in their comfort zone. When a person is logged into their Facebook page, they are comfortable. When they see your ad on their Facebook page there is a certain amount of trust that is inherent and that you don’t get when seeing a random link on a Google search. That trust can be a particularly important factor in the effectiveness of advertisements on Facebook. Typically with Facebook ads, you can go to the person’s Facebook page. The main difference between a Facebook page and a traditional web page is you can see customer feedback. If someone clicks on your Facebook ad and goes to your page, they can actually read what other people are saying about you. That helped build trust among your client base.

How Much Do Facebook Ads Cost?

Facebook ads can vary wildly in cost depending on who you’re trying to target. As an advertiser you can also control how much you spend by setting daily and ‘lifetime’ budgets for campaigns. The price of Facebook ads is among their most appealing features. Facebook ads can cost as little as $10 a day and as much as you want. We recommend a starting budget of $500 to $1,000 to get your feet wet. Test several ad types, images, landing pages with small investments of $10 a day. When you get it dialed in, pick your best performing ad and put a larger budget behind it. Barnett said small businesses should at least consider the option of Facebook ads because of their low cost.
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