Facebook Advertising: the biggest marketing opportunity in 2010?

April 13, 2010
by Andrew Harris

Let me be blunt. If you’re not advertising on Facebook, you should!

Facebook is currently boasting phenomenal engagement statistics. They claim to have over 400 million active users, with the average user spending more than 55 minutes on Facebook each day. This site is one of the fastest growing businesses online today and therefore should be a vital channel for every marketing plan in 2010.

Late in 2007, Facebook unveiled its ad system which enabled business to connect with target audiences based on their location, demographics, interests and finally by education and work.

Has this marketing opportunity been embraced by big brands and SMEs?

The uptake on fan pages has been huge, with over 3 million active pages now available on Facebook. From this 3 million however, how many are Businesses engaging the Facebook community with insights and purchased led incentives?

The low CPC’s available on Facebook when compared to Pay Per Click prices via Google Adwords would suggest very few Businesses are capitalising on Facebook, and therefore the opportunity for big brands and SME’s to cash in on this traffic is huge. The table below highlights the CPC economies of Facebook compared to Adwords for a range of generic and niche sectors;

The table shows that the reach on Facebook is lower than Adwords, however the targeting options used to reach the audience are highly specific – for example the Designer Clothes sector targets women who have stated an interest in fashion , and are aged between 18 and 40. This is then compared to the search volume on Google for the relatively generic keyword “Fashion”, which generated 30m impressions in March (2010).

The table highlights that the average CPCs for each sector are lower than Adwords, indicating that the levels of advertiser competition on Facebook are also lower than Adwords. This therefore offers advertisers a massive opportunity to capitalise on low-cost qualified traffic, and to steal a lead against competitors.

Advertising options available on Facebook

There are two ways improve your exposure on Facebook.

1) Targeted adverts featuring an image and text. These adverts will link directly to your website; and contain an image, along with a bold headline and description.

These adverts can then be delivered to your desired audience with a number of targeting options, and the advertiser will only pay when the advert is clicked, following Google’s popular Adwords model. ‘Likes’ for your adverts will help to reduce your CPC over time and bring extra return on investment.

2) Corporate/Branded fan pages are also a great way to engage your client base and promote special offers and new products/services. This strategy can be risky, requiring sensitivity and understanding towards your audience, however if managed correctly, these sites can generate huge interest. A recent Bank Holiday Sale by fashion giant American Apparel was publicised via Facebook, driving 2000 shoppers to their London Brick Lane store. The store clearly underestimated the power of the campaign… http://www.timesonline.co.uk/tol/news/uk/crime/article7086535.ece

Econsultancy.com has recently reported how fan pages can now be used as ecommerce platforms and suggests how Facebook will evolve over 2010. http://econsultancy.com/blog/5672-goodbye-e-commerce-hello-f-commerce

It is obvious that Facebook has the volume and the tools to deliver your message to your target audience; therefore we only have one remaining question to answer in order to understand the opportunity available on Facebook…

Can Facebook generate sales?

One of the best ways to assess the potential of any marketing channel is to analyse the amount of revenue it is generating. The revenue Facebook generates from its advertising platform is growing nearly as quickly as its user base, with reported estimates of £725 million advertising revenue in 2010, compared to £420 million in 2009.

Latitude has been managing Facebook clients for a number of years now, and we know how successful Facebook’s platform can be when used to engage an audience. We have an expert team with a proven history of generating sales and a healthy ROI via Facebook.

Additional case studies can also be found here

http://www.facebook.com/FacebookAds?v=app_7146470109

References

http://www.facebook.com/press/info.php?factsheet#!/press/info.php?statistics
http://www.facebook.com/press/info.php?factsheet#!/press/info.php?timeline
http://www.iabuk.net/en/1/facebooktomakeabilliondollars040310.mxs