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Online Advertising Case Study: Facebook Ads vs. Google AdWords vs. LinkedIn
Posted on May 6th 2014
I am not a big fan of Pay-Per-Click advertising. I have always believed in solid content and excellent services. But in right situations and if done well, PPC ads can be quite effective - especially on such platforms as Google AdWords, Facebook Ads and LinkedIn Ads. I have used Google AdWords since 2009, mostly to attract extra traffic to my business website. Then I decided to expand my advertising horizons and explore Facebook and LinkedIn. Facebook and LinkedIn platforms are not as mature as Google, but in the world of online advertising they have made some meaningful inroads. As a business owner, my goal is to get best return for my investment. I set out to compare these three platforms side by side with a conservative budget of $10 dollars a day for each platform. I used almost identical ads for all three platforms with key objective to improve brand recognition in the geographic areas of our interest – Ottawa, Canada; Rochester, Minnesota; and Fargo, North Dakota.
Here is the scoop.
Google has become very expensive in comparison to what it used to be just a few years ago. Keyword competition is fierce and most common keywords associated with my industry – web design - are very expensive. Cost per Click (CPC) for popular keywords (e.g., build a website) ranges from $3 to $8 dollars. Keywords with high competition are out of reach for me right off the bat. I had to focus on keywords with medium to low competition where CPC ranged from $0.3 to $2 dollars.
I had to become very creative with my keyword strategies and use combinations of words – phrases, making assumptions about what my users might look for. Since it is impossible to get it right just with a few phrases, I tried to cover as many relevant combinations of keywords as possible by creating close to 100 phrases. My strategy was to see which combinations performed better so I could weed out the weak ones. The key was to focus on specific geographic areas identified above. In the past, I have set my geo areas too wide (all Canada or all US) and as a result got lots of bogus traffic with low conversion rates/high bounce rates. Yes, with wide geo areas, I was getting thousands of impressions and it was exciting, but results were very poor. The new strategy with narrow geo focus worked better, albeit less exciting.
On Google, you also have the option to either display ads only on Google's own search network or through display partners. Google's display partners are a loose group of web entities willing to place your ads on their website. First I tried to run my ads only on Google’s own search network. The results were pretty poor. My traffic was non-existent. Then I included display-partners and my traffic soared in a matter of hours. I amassed 25 clicks at $0.48 per in a day. It is interesting that most traffic from the partners’ network came at night. It is very difficult to assess the quality of this traffic, but my gut instinct tells me it is not that great. Based on Google Analytics, this traffic looks very transitory with a high bounce rate (91.67%) and low level of engagement with the content.
Possibly, my ad focus was not as precise as it should have been, but creating several ad combinations helped me to identify services that performed better.
All in all, Google advertising is expensive and complex, but very robust and with a huge reach. It works if you have a unique and popular product or service. The interface feels professional, with excellent reporting tools, great usability and many various options.
My Facebook Ads experience was the most satisfying. With a targeted audience of 30k and a $10 daily budget, I amassed 13,117 impressions, 17 clicks and 9 likes. My cost per click was pretty comparable to Google's and cost per 1k impressions was even better. Moreover, I have increased my fan base ready for my future promotions. All users seemed to be legit on close examination, however some of them were “habitual likers” with up to 2000 liked pages - suspicious.
The Facebook Ads interface is quite easy and robust. It took me 20 minutes to setup my ads. It took less than an hour to get them approved – both Facebook and Google admin teams are quite efficient – Kudos!
What I liked about Facebook right away was the demographic and geo focus I could create for my ads. Due to Facebook having tons of demographic information on each user, I was able to focus on specific geo areas, interests, age groups, marital status, gender education, etc. From the close to 600k users in my area, I was able to narrow my focus to just 30k. This paid off right away. Since my focus was on small business owners, I started getting that type of traffic very quickly. I could see that users liking my page are legit as I could check their public profiles right away. My goal was to draw traffic to my business Facebook page and create as many likes as possible.
The Like methodology has enormous potential. People liking your page, automatically become your fans, and unless they choose not to receive your notifications, they become available for your future ads and promotions. One thing about Facebook – it is a place of play and leisure as opposed to LinkedIn or even Google. The secret is not to become too serious in your ads and keep them simple.
I knew that, based on psychological research, people are drawn to images of human faces showing extreme emotions such as amazement, disbelief, anger and such. It also should be an attractive face to establish subconscious credibility. I used male and female faces conveying the sense of disbelief as the ad cover accompanied by actionable text. For example, one of the most effective ads I had was “Whaaaat? Your business does not have a website! We can help (image of man’s face in disbelief). This ad immediately drew attention and several likes in a matter of a day. It averaged to about one like per $3 dollars that was still quite expensive if you do not take into account future benefits of a fan base.
All in all, Facebook Ads proved to be very effective in building brand recognition. Even if Facebook users do not click on your ad or like your business, they still subconsciously register your brand name through side vision. Research indicates that subconscious recognition works. Even if a user just skimmed over your ad without consciously engaging with it, they may react to your brand more favorably when they see it in some other context (e.g., passing by your store). They may feel familiar with your brand.
This is another reason to keep messaging in your ads positive and informative. It is hard to put a price tag or ROI on such subconscious recognition, but advertisers have been capitalizing on subconscious recognition for years. You have probably seen sitcom heroes brandishing their iPhones or speeding away in their VWs in a bid to imprint on your subconscious. This works better in Google and Facebook where your ads are more visible on landing. LinkedIn ads, for example, are more hidden.
LinkedIn is a perfect place for your ad if you want to reach strictly professional audiences. It is probably not for you if you are trying to promote your fruit stand, but it definitely was for us since we are in the business of serving other businesses and building web solutions.
The LinkedIn ad interface is not as intuitive and simple to use as Google or Facebook. It feels like a supplementary afterthought. It took the LinkedIn admin team longer to approve ads (sometimes up to 12 hours, when with Facebook and Google it was no longer than two). It was difficult to navigate, and took me a while to figure out how to use it. After I did though, it was relatively easy to setup and get going.
My LinkedIn target audience based on my demographic was 10,866. LinkedIn offers two bidding modes – Cost Per Click (CPC) mode and the impressions mode (per 1k). Each option cost about $2 per measurement unit. I started in the impressions mode and had more than 5000 impressions in three hours, burning through my daily $10 budget at the rate of $2 per 1k impressions. I got 2 clicks out of that. It is hard to tell if my ads were engaging enough, or ad placement was too obscure to be noticed.
Then I switched to the Cost Per Click (CPC) mode for the 2.5 remaining days. Using exactly the same ads I had only 1,244 impressions and zero clicks! Nothing spent but nothing gained either. My only hope was that the ads might have the subconscious effect and build recognition of my brand.
This poor click conversion might have something to do with ad placement. My ads were presented below the fold of the page on the right hand side both in the CPC and impressions modes--not exactly prime real estate.
I also was quite puzzled by the results. My interpretation was that LinkedIn profited from showing my ads as many times as possible in the impressions mode and gave up on my ads in the CPC mode. LinkedIn reporting is primitive and only allows downloading a CSV report.
In conclusion, for my budget and focus, Facebook was probably the best investment. For the same amount of money I got much better results, but most importantly, I got lasting fans. People liked my business page and interacted with it. They further went onto my website.
Google would probably be a better option if I had a unique and popular product that could generate unique and affordable key phrases. LinkedIn, so far, has been a disappointment both on the admin side and in traffic conversion; albeit it may give better focus for certain business sectors or if you want to reach some very specific professional strata like executives in a certain sector.
There's a lot of strategy involved in advertising, which could take years to learn. But the biggest bang for my ad dollar was definitely Facebook.