Productivity & social

Do social media ads really work? We put them to the test!

@christophernull
Christopher Null

Christopher Null, PCWorld

Christopher Null is a veteran technology and business journalist. He contributes regularly to PC World and Wired, and is a technology columnist for Executive Travel magazine.
More by Christopher Null
Social media sites already offer free advertising in the form of tweets and Facebook posts, but these tools can only take your brand so far. The next step involves paying for social media ads, and if you're considering this option, you're probably most concerned with one big question: What will my return actually be? Will spending money on an ad on Twitter or Facebook bring more customers to my business than the same amount spent on Google AdWords?
I put that question to the test by setting up experimental ads across five services: Google AdWords, Facebook, Twitter, LinkedIn, and StumbleUpon. I wanted to see exactly how these tools benefited my own content-creation and corporate blogging business. Indeed, Null Media is exactly the kind of small business that could benefit from social media ads—in theory.

Google AdWords: The baseline

Google's own ad for AdWords
First, a few words about the baseline for this experiment—Google AdWords—where I had already been running ads for several months. For this test run, I raised my overall budget to $25 a day to make it comparable with the social media sites being evaluated. (See page 2 for how I tested.) I quickly discovered that my budget wasn't being exhausted because my bids were too low. By raising these bids to about $2 per click, in line with other services reviewed here, I received more traffic, but not much.
Over the course of the ad run, at both low and high bids, I received 13,970 impressions and got 65 clicks for a total of $80.74. That's an 0.47 percent clickthrough rate at an average price of $1.24 per click.
The verdict: What may sound like poor performance is actually quite good, and since those ads are delivered to people who are actively searching for terms I'm targeting with my keyword ads, that represents a worthwhile investment.

Facebook: Heavy exposure, light clickthrough

Over 1 billion served, but what about your customers?
Setting up my ad with Facebook was by far my most complicated experience with these services, although its management system and tracking services are quite powerful. The hassles began right from the beginning. I waited all day for my first ad to be approved, but it was "pending" indefinitely. I canceled it and tried again the next day, and it was abruptly approved within minutes.
My ad on Facebook
Facebook offers both CPC (cost per click) and CPM (cost per thousand impressions) ads. I settled on a CPC ad, targeting Facebook users who expressed an interest in various business topics, with a bid of $0.15 per click. Twelve hours later, the ad had received no impressions, likely because the bid was far too low. Facebook suggested a higher bid of $0.57, which got things moving, but slowly. A day later, Facebook's reporting tool suggested an even higher bid of $1.41. Again, impressions increased, but not clicks. Another day later, I raised the bid yet again to $2, at which point Facebook suggested a bid between $2.58 and a whopping $7.30 per click.
The final ad results from Facebook.
What was going on here? I'm still baffled. Is Facebook's ad bidding a bait-and-switch system or just bad programming? Regardless of how much you pay, Facebook encourages you to pay even more. Yes, higher bids result in additional clicks because your ad is displayed more often, but shouldn't Facebook's system be smarter about its recommendations?
After four days, the numbers were in, at a mammoth 253,207 impressions and a mere 25 clicks. The total clickthrough rate was an infinitesimal 0.01 percent, at a total expense of $37.70. That works out to an average CPC of $1.51.
The verdict: The numbers aren't terrible, and the heavy exposure, even without many clicks, is worth something. However, the scant number of actual visits makes me wonder if Facebook was the wrong venue for this ad. (My business page did, however, get one extra "Like" during the ad run.)

LinkedIn: Making impressions, not leads

LinkedIn makes a special pitch for SMBs.
I'm advertising a B2B service, so LinkedIn sounded like a perfect match. Like Facebook, LinkedIn offers both CPM and CPC ads, so I gave a CPM ad a whirl for my first day, bidding the minimum allowed rate of $2 per 1000 impressions, targeting a fairly broad segment of LinkedIn users with job descriptions relevant to my product.
My final LinkedIn ad.
My ad began showing within about 10 minutes, and took off. I hit my $25 limit within an hour. The results for this first day were 13,643 impressions and 6 clicks, for a 0.044 percent clickthrough rate and a whopping $4.17 CPC.
The CPM ad did not feel cost-effective, so I switched to a $2 CPC bid and turned on the "Collect Leads" option, which encourages people who click on your ad to provide contact information.
LinkedIn results.
The final tally: After four days, my ad had 51,192 impressions, 13 clicks, and a low 0.025 percent clickthrough rate. My total spend was $41.50 for a $3.19 average CPC. Take out the first CPM-ad day, and the clickthrough suffers—a net 0.019 percent rate—but the CPC of $2.36 (more than my bid, oddly) is more affordable. I never received any leads from LinkedIn, however.
The verdict: After my ad ended, LinkedIn emailed suggestions on improving my ad's performance. It said the site's "better performing ads" averaged a 0.02 percent CPC, so my ad actually seems to have been a pretty solid performer for LinkedIn, compared to those by other advertisers.
Next page: Twitter, StumbleUpon, and what you need to know before launching an ad...

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10 comments

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YesimTin avatar
YesimTin
03/14/2013 05:17 AM PDT
Your FB CTR (%0,01) is very low, therefore FB Ads seems the highest price.
It depends images, texts, target audience you choose, your industry and competitors, day, time, media planner's skills and many other factors. :)
I think if you really fairly compare the results, you have to manage more than one campaign digital media and more than 100$ budget. :)
WisdomandHealth avatar
WisdomandHealth
03/14/2013 07:42 AM PDT
I sincerely appreciate the effort here. But looking at a single ad makes it difficult to determine which is the best platform. Really the best approach is to continuously A/B test ads within each platform (i.e., AdWords). So in AdWords, you should run two ads, then pick the winner. Once you have a winner, drop the loser and create a new "challenger." Continuous improvement in the ad text and keyword selection should drive CTR upward.
Another consideration is how much revenue did the clicks generate? A lot CTR with a high Revenue might be a good result, especially if those customers are repeat customers.
In our experience, we've had some success with AdWords and poor results with Facebook. StumbleUpon works to drive traffic to our blog, but not to generate sales. We've never tried LinkedIn nor Twitter ads.
mbloof avatar
mbloof
03/14/2013 08:14 AM PDT
I suppose it depends on your market and how 'technology literate' your potential customers are.
I surf with Firefox with Adblocker+ loaded. I never see ANY advertisements on Facebook, here and else where. While the advertisements might be getting sent to my PC they are never displayed. This might explain the dismal click through rates.
This is where attempts to advertise on the web always FAIL. Users can simply avoid them by not installing Adobe FLASH and employing free browser utilities that remove them from viewed web pages.
Submitting information about your companies products and services to websites that specialize in showcasing similar items ought to be much more effective as users that land there may actually actively seeking out what you are offering.
null
03/14/2013 08:28 AM PDT
Your FB CTR (%0,01) is very low, therefore FB Ads seems the highest price. It depends images, texts, target audience you choose, your industry and competitors, day, time, media planner's skills and many other factors. I think if you really fairly compare the results, you have to manage more than one campaign digital media and more than 100$ budget.

CPC ads, by definition, are priced per click, not by impression. Therefore the clickthrough rate is irrelevant in determining the price you pay. Looking at the actual CPC, however, Facebook ads were half the price of LinkedIn ads.
Anandamide avatar
Anandamide
03/14/2013 11:31 AM PDT
StumbleUpon does offer engagement tracking via their Reports tab. More info on that can be found here- http://www.stumbleupon.com/ads/blog/slice-and-dice-your-data-with-advanced-reporting/
Also, since they send visits straight to your site, you can simply tag your URL with Google Analytics or Omniture parameters to track visitor activity.
paddyomaddy avatar
paddyomaddy
03/14/2013 01:22 PM PDT
Has anyone ever actually brought anything via these web ads? I never have, I don't know anybody who ever has. Maybe I should should just shut up before the ad buyers realize the uselessness of it all, and I have to start paying to use Google etc.
LizGross144 avatar
LizGross144
03/14/2013 01:43 PM PDT
You've already listed this as a disclaimer, but I really think it's worth more than a note at the end - running one ad on each network with a small budget for just a few days does not constitute a test. The fact that you only got one like on your Facebook page leads me to believe that you could have benefited from some different creative or ad placement (it looks like you chose only to run a standard right column ad. Why not a sponsored page like ad in the newsfeed or a sponsored post that would be relevant to your audience? Also, lately I've found that manually bidding for your CPC in Facebook can be too time consuming and result in missed impressions (as you found). You could have used optimized CPC or CPM to boost the ads performance. Ultimately, advertising a generic message that links to a generic homepage is not the best fit for a content-heavy network. Perhaps it's your strategy, not the platform, that could use some tweaking.
All that being said - I appreciate the comparison of what it's like to purchase the ads. Not all of us have used all of those services, so that was useful. I just don't rightfully think you can call this a "test" - maybe more like a dabble.
null
03/14/2013 05:03 PM PDT
You've already listed this as a disclaimer, but I really think it's worth more than a note at the end - running one ad on each network with a small budget for just a few days does not constitute a test. The fact that you only got one like on your Facebook page leads me to believe that you could have benefited from some different creative or ad placement (it looks like you chose only to run a standard right column ad. Why not a sponsored page like ad in the newsfeed or a sponsored post that would be relevant to your audience? Also, lately I've found that manually bidding for your CPC in Facebook can be too time consuming and result in missed impressions (as you found). You could have used optimized CPC or CPM to boost the ads performance. Ultimately, advertising a generic message that links to a generic homepage is not the best fit for a content-heavy network. Perhaps it's your strategy, not the platform, that could use some tweaking. All that being said - I appreciate the comparison of what it's like to purchase the ads. Not all of us have used all of those services, so that was useful. I just don't rightfully think you can call this a "test" - maybe more like a dabble.

For the record, the ad did not link to our Facebook page at all, so there was no expectation of getting additional likes. Ditto with Twitter.
Buttonman317 avatar
Buttonman317
03/15/2013 08:36 AM PDT
I have to say Facebook is crazy expensive but your better off creating a fan page linked to a-weber to create leads to send an e-mail campaign to. Paying over $2 a click for an ad is crazy if your not getting conversions!
LizGross144 avatar
LizGross144
03/19/2013 11:16 AM PDT
For the record, the ad did not link to our Facebook page at all, so there was no expectation of getting additional likes. Ditto with Twitter.

I guess that's just one more thing I don't understand - it's so easy to link a Facebook ad to a Facebook page (even if you're promoting another link on your site) and tap into the social functions of the site...I guess I don't understand why you wouldn't do it.

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