Posts Tagged online advertising

Latest Facebook Ad Campaign Results

We did another campaign on Facebook for our January Sale. It was run over a period of 7 days. The ad looked like this.

facebook-ad-2

The landing page for the ad was our home page and after the 7 days the stats looked like this:

Impressions: 116,744

Clicks 170

Click Through Rate %: 0.15

Cost Per Click: $0.16

Total Cost: $26.78

Looking at Google Analytics I see that we received one conversion from the campaign. The bounce rate was also quite high at 44.27%.

Conclusion:

The cost per sale of $26.78 was high – much higher than the cost per sale for our Google Adwords. As we found in our previous campaigns, Facebook Ads are not great for conversion to sales as users are not in a shopping mode at the time. They are good for getting traffic to your site and for brand awareness.

I’m going to try another experiment with Facebook Ads again soon. For the next campaign I’ll attempt to get signup to our newsletter and maybe incentivise by offering entry in a prize draw. I expect that the conversions for signups will be higher than conversions for sales. It will make an interesting experiment anyway and I will publish my results here.

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Looking forward to 2009

Last week I wrote a post looking back at 2008. Now to look forward and set goals for the New Year. I hope I’m not too late as over 5% of the year has passed already.

  • Expand the PuddleDucks range. Include more of the products that are successful and remove products that are not so popular with our customers.
  • Review enable the site. Allow customers to enter reviews on the site and by text.
  • Expand the number of shops, schools and creches we supply.
  • Create more professional looking newsletters. Maybe change email supplier from Constant Contact.
  • Blog more often. Find an audience – write content that appeals to the demographic of our customers i.e. parents of young children.
  • Try Ebay again – I have experimented not very successfully with Ebay for selling single items. I’d like to try it again and maybe create an Ebay store this time
  • Improve performance and Return on Investment on  Online Advertising with Adwords and Facebook.
  • Get better organic Google results by concentrating on website content.
  • Find opportunities to get coverage by creating and sending interesting Press Releases.
  • Create a number of surveys and send results of at lease one in a Press Release.
  • Expand our Facebook Fan page, get some interaction going, give fans reason to be fans and provide offers and one-off deals to members.

If I get all that done then I’ll be happy.

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Measure Return on Investment on your Online Ads

The great thing about Online Advertising is that you have all the data to measure the Return on Investment (ROI) of the campaign. This is a huge advantage over offline advertising in a newspaper or magazine where this level of measurement is just not possible. For an ecommerce business, the best way to measure the ROI is to calculate the Cost per Sale i.e. how much you are paying to get one sale from the online advertising campaign. The method I user to calculate this is outlined below.

 pd-on-google

In a recent post Seth Godin says that being able to measure the cost per sale negates the idea of having a set advertising budget. As long as you can acurately measure the cost per sale of the online campaign and compare it to a threshold based on your average order size the investment can in effect be unlimited.

I had previously posted about trying out a Facebook Ad campaign back in October and comparing it to our ongoing Google Adwords campaign. I gathered lots of data at the time but didn’t calculate the Cost per Sale. So in the Christmas shopping period I ran another Facebook Ad campaign and here is how I worked out the cost per sale for it and for Google Adwords.

1. Get the average Cost per Click

This can be obtained online from Google Adwords and Facebook Ads Manager. The cost per click for our campaigns was:

Google Campaign:  €0.30

Facebook Campaign: €0.42

2. Get the Percentage Conversion to Sale

Get this from Google Analytics.

Google Adwords Conversion Rate = 3.03%

Facebook Ads Conversion Rate: 1.35%

3. Calculate the Clicks to get a Sale (CTGAS)

Calculate this from the Conversion Rate. For example if the conversion rate was 5%, this would mean that the Clicks to get One Sale is 20. Or to put it another way – on average for every 20 clicks we will get one sale. So for the conversion rates above:

Google  Adwords CTGAS = 33

Facebook Ads CTGAS = 74

The formula is CTGAS = (100*Coversion Rate as a Percentage)/100

4. Finally Calculate the Cost per Sale

This is calculated by multiplying the Clicks to get a Sale by the Cost per Click

Google Adwords: 0.3 * 33 = €9.09

Facebook Ads: 0.42 * 74 = €23.68

Analysis – are they worth it?

For PuddleDucks our average order size is approximately €60. From this, we need to ask oursleves how much we are happy paying for a sale from the online ads – taking into account 1) markup and profit 2) covering operating costs 3) you may get repeat orders from the initial sale 4) you may get word of mouth orders from the initial sale. This is a soft number and I have decided that for us it’s €14. That means that if the cost per sale of our online campaign continues to come in under €14 we’ll continue to run it. In Seth’s blog post he says that Amazon had a similar threshold of $33 – but we’re a little smaller than Amazon!

On this criteria our Google Adwords campaign will continue but the Facebook campaign will not. During 2009 I will continue to measure our cost per sale for Google Adwords and keep trying to keep it as low as possible by changing keywords, adjusting cost per click, changing landing pages and the ad text. I’ll also try out Facebook Ads again on a limited basis and see if I can get the Cost per Sale down.

More thoughts on Facebook Ads: 

They will always have a higher cost per sale than Google Adwords due to the mode that the user is in at the time of click. For Google they are in a search mode – looking for a product or service. For Facebook Ads the user is going through their normal Facebook stuff when they happen to see the ad. So the Facebook Ad is akin to Banner Advertising really – although it is better targeted than normal banner advertsing due to the demographic selection you get when setting up the ad. So Facebook Ads will show a better ROI than Banner Ads but not as good as Google Adwords.

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Facebook Ads and how they compare to Google Adwords

Since reading some posts a few months back on Damien’s Blog and the eWrite blog about Facebook Ads, we have recently tried them out for PuddleDucks. We were lucky enough to get the free $100 of advertising from the Visa Network Application. So I set up our Facebook ad on the 2nd October and off we went. I set the daily budget to $5.00 Here’s the ad we ran:

Setting Up:

It’s quick and easy to get going. I love the way you can select your demographic of the Facebook users you want to see the ad.  As most of our customers are mothers of kids, I tried to get this selection when setting up the ad. Unfortunately Facebook doesn’t store any information on whether the member has kids or not. This is a pity. So I had to do my best to get as close to our ideal selection as possible. I did this by selecting women over 27 and under 50 – either married or in a relationship. It’s the best I could do – I hope this isn’t sexist or anything!! The only problem with this is I could never see the ad actually appear on a Facebook page as I don’t meet these criteria! 

Amount of Clicks:

We were getting between 8 and 12 clicks per day with an average of about 10. The click through rate was very low – it varied between 0.07% and 0.14%. For instance yesterday I got 12 clicks out of 9,019 impressions which is a CTR of 0.13%. By comparison, our Click through Rate for one of our Google Adwords campaigns was 2.45% for the last week. This difference is understandable – by its very nature the CTR for Facebook Ads will be a lot lower than for Google Adwords.

Cost:

I set the budget to $5.00 (€3.87) per day. And I originally set the cost per click to $0.60. After a few weeks I reduced the cost per click to $0.40 and then the number of clicks I got per day increased slightly. On most days we were only charged between $3 and $4.

Pages Viewed and Bounce Rate (data analysed from Google Analytics):

[For those unfamiliar, bounce rate is a measure of whether a visitor directed to a website moves from the initial landing page (usually the home page) or whether they “bounce out” of the website immediately back to the source webpage.] 

Facebook Ads compare quite favourably with Google Adwords. Visitors from Facebook Ads viewed an average of 3.72 pages and the Bounce Rate was 33%. The comparable figures for Google Adwords in the sample period was 5 pages per visitor and a 29.5% Bounce Rate. I am quite happy with Facebooks results here considering that visitors from Google Adwords are expressly looking for a product while the visitors from Facebook are clicking the ad they happen to notice while they were going about their normal Facebook activities.

Conversion to Sales:

For us, Facebook does not fare very well in getting many sale conversions directly from the Facebook Ad click. Our conversion rate was less than 1% whereas we are getting over 5% conversion to sales from Adwords. (according to Gloogle Analytics)

Conclusion:

I enjoyed trying out Facebook Ads for PuddleDucks. We got good traffic but the conversions to actual sales were quite poor. The future benefit of the Facebook Ad traffic is not tangible but I think it can show positive benefits for brand awareness and hopefully some of these visitors will come back, independently of Facebook and purchase at some time in the future. Now that we have used up our free $100 advertising I think I’ll pause it for a while and think of other ways we can use the Facebook Ads in the future. Maybe promote specific products (with clicks to specific landing pages), maybe do something for the Christmas market and maybe bring visitors to our Facebook fan page rather than the website home page. I’ll continue with Google Adwords as it always brings satisfactory sales. In the meantime I’d be interested in hearing of anyone else’s experience of using Facebook Ads to generate sales.

— Aedan

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