Should You Friend Facebook PPC?

A now infamous Newsweek article in 1995 confidently predicted that the Internet was just a fad, perhaps like the pet rock of the 1970s. At one point, the author noted: “Discount the fawning techno-burble about virtual communities. Computers and networks isolate us from one another. A network chat line is a limp substitute for meeting friends over coffee.”

Fast-forward to today – a mere 15 years later – and Starbucks is trying to get people into its coffee stores via Foursquare, and Facebook has attracted more than 500 million users. Naysayers still exist. When it comes to advertising on social media like Facebook, many vehemently contend that Facebook PPC is more of a fad than a trend. Some advertisers decry Facebook PPC as bordering on fraudulent, while others have simply concluded that the “return on effort” pales in comparison to established online marketing mediums, like Google AdWords, display, or e-mail.

Facebook PPC is still in its early development, but I believe it’s here to stay and will in fact become a major force in online marketing. While it’s not yet right for every advertiser, ignoring Facebook PPC – like ignoring the Internet in 1995 – is shortsighted at best. I see five very good reasons to start exploring Facebook PPC today:

1. Demand creation: Internet marketing is broadly divisible into two types of advertising: demand creation and demand fulfillment. Search engine marketing is almost entirely “demand fulfillment” – users tell you exactly what they want by entering a keyword query, and all you have to do is optimize your ad text and landing page such that you convince them that you’re the right vendor to service their need.

That’s great, assuming you have a product that people already know they want. But what if you’re marketing a new mousetrap? For example, if you were the marketing manager of TiVo when it launched in the late 1990s, what keyword would you buy – “alternative to VCR”? For new products or even new entrants to an existing market, it can be very difficult to uncover search keywords that actually work for your business. For this reason, promoting your offer to people who don’t yet know that they want your product is often the only effective strategy. This is known as “demand creation.”

Facebook PPC is a demand creation medium. If you know your product’s target audience, Facebook enables you to serve ads against precise psychographic and demographic profiles. And unlike many other places online, where consumers are apt to lie about their personal information to avoid targeting, on Facebook, users are – as of now – generally honest.

2. Branding: “Mass media” used to mean TV, radio, and newspaper. Depending on your target audience, however, sites like Facebook are now more effective mass mediums for creating frequency and lift than traditional offline media. And Facebook advertising not only gets your message in front of potential customers, it also enables them to interact with – and promote – your brand. Users can “like” your product and join your fan page, where they can suggest product enhancements, ask questions to your team, or just share their experiences. And your happiest fans are likely to become brand advocates, acting as personal promoters of your brand to their friends. When you combine detailed targeting, a massive audience, interaction, and personal referrals, Facebook PPC can drive huge brand value.

3. Arbitrage: If you are a direct response marketer (i.e., you don’t care about brand at all – you only care about profits), you have likely seen your profits on AdWords drop over the last few years. This may be due to increased competition, rising CPC prices, changes to quality score, the increasing reach of the AdWords broad-match algorithm, or a combination of these forces. Regardless of the reason, many direct response advertisers are finding it harder to squeeze profit out of AdWords.

Facebook PPC is uncharted territory compared to AdWords. Competition is light, and Facebook’s advertising guidelines are, for now, much less restrictive than AdWords’. If you can master Facebook now, you’re likely several years ahead of most of your competitors. Translation: opportunities for high profits similar to the early days of AdWords are still possible.

4. Budget diversification: Even if you’re still getting great results from AdWords, Facebook PPC can help you to diversify. As noted, competition on AdWords is only increasing, quality score is always changing, and a general truism in life is to avoid having all of your eggs in one basket. Facebook offers a great opportunity to reach consumers who may not use Google, or at least who may not have searched for your product or service on Google.

5. Future opportunity: Facebook is here to stay, and so is Facebook PPC. As Internet advertisers, we have no choice but to follow Internet users, and these users are increasingly spending more hours on Facebook. Part of the fun – and challenge – of being an Internet marketer is identifying and capitalizing on consumer trends, and Facebook is 100 percent trend and 0 percent fad.

Facebook PPC isn’t currently right for every advertiser. The user interface is difficult, campaigns often require a lot of maintenance (for example, frequent ad text and image changes to keep CTR high), and time-constrained advertisers simply may not have the time to spend on anything but their AdWords campaigns. All of that said, Facebook PPC is an underutilized platform and is quickly increasing in importance. Getting familiar with Facebook PPC sooner rather than later is a smart decision for most Internet advertisers.

This column was originally published in SES Magazine in August 2010.