What I’ve Learned about Facebook Advertising by Spending $1,000 – Lots of Promise, Lots of Work to Do

Over the past few months, I’ve been really interested in developing a better understanding for how effective Facebook’s advertising tools are. I’ve done this strictly for my own events business, not for Serious Business. For a total expenditure of slightly over $1,000, I feel like I’ve come up with a few opinions / thoughts on the whole experience:

Facebook fans might have a nebulous value, but Facebook fans respond to targeted communications with benefits (discounts, free stuff). I still don’t know what a Facebook fan is “worth” to me – specifically, I have no idea what the maximum CPA I’d be willing to pay to get an additional Facebook fan. What I do know, though, is that putting out an offer (discount code, free ticket, etc) to your Facebook fan gets real activity. Our most popular posts / messages were ones that offered discounts, deals, or really relevant updates on new speakers. Surprise, surprise – people respond to offers for free stuff or relevant information.

Facebook has a gaggle of products that could be simplified and unified – As a newbie advertiser, Facebook still has too many disjoint products. They have Fan Pages, Events, and Groups. My feeling is that they’re pushing most professional organizations to use Fan Pages. I have a group as well, but the tools for managing it are very basic. And you can’t (as far as I can tell) easily integrate a group into a Fan Page. And Facebook has Events. Events are great, but you can’t link an existing event with your Fan Page – you have to create events from scratch from the Fan Page to make them easy to find for your Fans. That’s something they should fix.

You know what would help? Facebook should pick a locus of activity and I think they have – it’s the Fan Page. Now they just need to make sure that as many of their tools / offerings as possible seamlessly integrate into the Fan Page experience.

Facebook advertising needs the same kind of 3rd party tools ecosystem that Google AdWords has – Overall, I feel like Facebook has really rudimentary tools when it comes to measuring the efficacy of your advertising campaigns and automating the whole bid optimization process. If you’ve spent money on Google Adwords or internet advertising more broadly, you know that there are tons of tools out there to help you maximize the efficacy of your spend, compare performance within and across networks, and to tune your creative. Facebook doesn’t have that tools ecosystem, but they’re still a young company. To make this a truly powerful platform for SME advertisers, Facebook will either need to beef up their tools or create a good 3rd party ecosystem where other people can do that for SMEs and earn a profit doing so. My money is on the company doing the latter – it’s more consistent with many of the things they’ve done to date.

Facebook advertising can deliver real results if you track it properly – For our latest conference, the Virtual Goods Summit, we managed to sell 16 tickets that were directly attributable to Facebook. To be 100% clear, that means that we sold 16 tickets where the transaction was completed by someone who clicked on a link where the referring source was Facebook. If you’re an Eventbrite user, this means that 16 of our tickets came from tracking URLs that were sent to the Facebook audience. Facebook was our second most fruitful channel for customer acquisition – the only channel that outperformed them (based on tracked, directly attributed ticket purchases) was our own mailing list. Not bad for a 5 year old company with a relatively new advertising platform.

Longer term, though, the value of having a strong presence on Facebook is that it is a relatively friction-free way to communicate with people who are interested in your brand. Email is clogged – it has been taken over by spammers. Reaching people through that channel is difficult. It’s hard to get people to give you phone numbers – that’s too private and not disposable. So I do think that having a low-friction channel with high responsiveness is a good thing for people who want to advertise. Facebook, though, will have to bear the responsibility for setting the rules of the road and keeping this channel from getting clogged.

If you want to take part in my FB marketing experiments, become a fan of the Virtual Goods Summit or the Social Gaming Summit. If you have thoughts on your experiences using Facebook’s marketing tools, let me know in the comments.