02.13.08
Advertising on Social Networks
Have you ever had a chip in your windshield? It really annoys you for the first month, but after a while you don’t even see it anymore. Ads on Social networks are the same way. You don’t look at them, especially if they blend in. I recently ran an experiment where I ran two ads with the same text on Google’s content network (ads that are not on the search results page) and on Facebook. I targeted the same keywords.
My Facebook Click Through Rate was .08% my Google Content Network was 1.9% While I paid a pitiful 3 cents per click on Google I was charged 12 cents on Facebook. From both a Brand awareness and a Cost per Acquisition standpoint Facebook lost. Why? Because most people didn’t even notice the ad sitting on the left margin. Adding an Image to the Facebook ad got me to .4% and didn’t cost me any extra, but it still is about 1/5th the CTR of the least qualified Adsense campaign.
Seeing as I was able to target the FaceBook ads to a razor sharp point if I wanted to You would think that I could hit targets that were exactly what I am looking for, unfortunately that doesn’t seem to be the case. I tried several experiements where I tried to target groups of Varying sizes ranging from 320 people to 1.2million, and my CTR’s didn’t vary much at all. In Fact running ads that had nothing to do with the keywords they were run against seemed to have about the same CTR. The Best example of this was an ad campaign I ran for a Psychic Hotline had the same CTR, run against users with the word Psychic in their profile as against the word atheist in their profile.
With all this additional targeting you would think that the price of advertising on Google would be coming down over all with a higher Price Per Click. Because the Ad was more targeted you would pay more per click but you would get a better sell through so your over all cost would be down. You would also think that the money earned as a publisher would be up, since the ads on your site would be better targeted, so the Earnings per Click would be up, and the CTR would be up, but this is not what people in the Blogosphere are seeing. It is in fact the opposite.
I am paying more to run my ads, my CTR is falling, and my site earnings are down. How can this be the case? Well Google doesn’t share a fixed percentage with its Adsense users, so small changes in their commission can make huge ripples in the earnings and the costs associated with advertising.
Lets say for example that Google changes their commission on an Ad Campaign that is buying ads at .03 cent CPC, and that the commission is variable based on the size of the order. All of a sudden a small campaign that was doing 100k impressions a day and spending $150 a day may have an effective bid that is lower than it was the day before, so they are now only getting 50k impressions, and because the bid is lower is hitting less qualified pages so it is now spending $6 a day.
If I was the top hit for the keyword that small campaign was targeting I am likely no longer getting 50% of that $150 on my page, but instead have a larger big brand Ad that is being shown on lots of pages and so my audience likely has already seen it, and my CTR falls. My Page can go from doing $75 a day, to doing $4.
As someone who makes his living "owning" terms this can wreak havoc on my pages. I am in a constant battle to fend off ads that I know my users won’t click on. You can run ads all day long for Blemish removers but they are not going to get clicks on my how to Calibrate your HD Home Theater page. Nor are all the Human Growth Hormone ads. So I am losing and so is my audience.
Now is a great time to be doing branding campaigns however. I can get you 10 Cent CPM’s for your ad. (and I will still get atleast my 30% buyer’s fee) You want 10 Million people to recognize your logo, you give me a call, I’ll help you out.
This ariticle is in response to: Social networking and ads-who’s paying attention-