We stopped advertising on Facebook • Hacker News Board

Re: We stopped advertising on Facebook

#41

Post by orclev » Fri, Jan 10, 2014, 4:03 PM UTC

wpietri wrote: post #32

bluedino wrote: post #10

Earlier quoted context omitted.

>> the Coca-Cola commercial you see on TV probably doesn't make a single person get up out of his chair, go grab his car keys, and drive to the store and buy a Coke. >> Yet, over time, get exposed to enough of those ads, and when it's time to buy, your hand instinctively goes for the one your brain is bombarded with ads for all day. I don't really think that has anything to do with it. At work we having both Coke and…

> I don't really think [brand advertising] has anything to do with it. [...] Soft drink choices come down to availability most of the time. Coca Coca spends about $3 billion a year on advertising. [1] I couldn't find a breakdown for how much is brand-building versus other goals, but I think we can agree it's a lot. That suggests two hypotheses: A) People in charge of a $3 billion budget for an incredibly profitable a…

I'm going to go with B. Just because "everyone is doing it" doesn't mean they know what they're doing. Coke spends a ton of money on advertising because they want more sales and common wisdom says the way to get more sales is to spend a ton of money on advertising. It might work, it might not, but it isn't a simple 1 to 1 thing and it works differently on different people.

On a personal note, I grew up drinking Coke (because my dad preferred it), and I generally prefer the taste of Coke most likely because it's what I grew up drinking. I've seen Coke ads, and I've seen Pepsi ads, and neither one makes me want to drink one or the other or go buy one or the other. About the only thing it might do is influence me to go get a Coke if I was already feeling a bit thirsty although even if it was a Pepsi ad it would probably still make me want to get a Coke. In this case it would be a win for Soda vs. some other kind of drink like say a Starbucks coffee, not specifically Coke vs. Pepsi.

Re: We stopped advertising on Facebook

#42

Post by babs474 » Fri, Jan 10, 2014, 4:05 PM UTC

toomuchtodo wrote: post #38

babs474 wrote: post #36

Earlier quoted context omitted.

Facebook style ads CAN convert in a tight window, the problem is people are looking in the wrong place for them. Nobody checks out their timeline, sees a coke ad and immediately clicks to buy. Those ads don't "convert". What does happen is the cumulative effect of those ads put your brand (coke) top of mind. Later when somebody is searching for "snacks" on google and paid search ad comes up, that person is more likel…

How does this model work when people block ads entirely online? Disclaimer: I'm 31, block all ads online, and don't own a TV. I haven't seen a TV commercial in years.

A single data point is too small to reason about. But lets say there was an ad campaign that was blocked at a high rate, or even just placed poorly where nobody was seeing it or something. Our scheme would assign those impressions a low value, ie it would come out that cranking impressions or lowering impressions isn't effecting conversion rates anywhere else, so why not turn the ad off.

Re: We stopped advertising on Facebook

#43

Post by unclebucknasty » Fri, Jan 10, 2014, 4:08 PM UTC

When launching something new about mid-last year, I went back on my long-standing feeling that FB was esentially worthless for companies (I generally don't believe that people really care about busineses on FB).

So, I went ahead and created a page, whereupon FB immediately began pushing me to buy likes (as I call it) or promote my page (as they call it). It felt extraordinarily scammy, especially given that I would then have to pay even more to reach those same people later.

But, I pushed through and tried it. The results were abysmal. Less than 100 likes, very little engagement, and a couple of conversions. Probably cost me about $1K.

Now, it can be argued that it was our message, service, etc. But, this story repeats itself all too often. I think the value of an FB like is highly overrated, even for "validation" purposes. People are increasingly turning a deaf ear to what their friends like and/or what shows up in their feeds. In fact, the very proliferation of like activity that FB and other companies push has diminished the value of likes over time until they are now completely meaningless or nearly so.

Re: We stopped advertising on Facebook

#44

Post by netcan » Fri, Jan 10, 2014, 4:13 PM UTC

I think Facebook is making mistakes.

Adwords grew explosively, but relative to the expectations of Facebook, Google looks patient. Adwords didn't start off with ten million customers with endless budgets. They started off letting people buy $20 worth of ads at 5¢-50¢ per click. Some people figured out ways of selling ebooks or whatnot at a profit and figured out things like split testing, conversion tracking and such. They were then qualified to be consultants and go door to door to electricians or removalists who got a good ROI and eventually allowed the consultants to spend an extra $350 per month. Then they hired an in house 'PPC Specialist' who spend their week figuring out new ways to profitably send Google more money. A lot of the campaigns set up 5 years ago are still active. I worked as a consultant back in 2007 and most of the campaigns I set up are still running.

It took some time to figure out that Adwords works for dentists but not for burgers or detergents. That wasn't immediately obvious. Burgers and detergents were the big spenders of the advertising world and a platform that didn't work for them was a toy.

There were a lot of ultimately stupid campaigns started. Half the initial customers tried to get a better CPM (cost per 1000 impressions) by optimizing for a low click through rate, benefiting no one. Google killed this off by creating adrank. The other stupid advertisers were eventually outcompeted by those who could turn their click into revenue more efficiently.

My point here is that Google put a tool out there. It took time before users (advertisers) were good enough at using it to put pressure on the bids and bring up prices. Someone figured out how to sell car insurance. Comparison sites were created. They signed deals with insurance companies. Ecosystems developed.

Facebook ads aren't useless. They just work for some stuff. The advertisers just need time to figure out what works. If you are having a town fete and want parents with small children to know you have a petting zoo, Facebook ads will get you customers physically driving to you for cents. Incredible value.

Facebook is just impatient. They keep moving the posts in an attempt to find a formula rather than making good tools, leaving them out there and letting advertisers find the formulas.

Re: We stopped advertising on Facebook

#45

Post by martinshen » Fri, Jan 10, 2014, 4:14 PM UTC

I just checked out nearby.lk's Facebook page and it's no wonder that they weren't getting performance out of Facebook Ads.

Facebook Ads are amazing. Nothing else has come close for us both for direct conversion and likes. Likes are far cheaper to acquire and can be extremely performant if used in the right ways.

Facebook has a huge learning curve though. As with all things, if your FB page doesn't have "page/audience fit" before the ad campaign, it won't after the ad campaign either.

Re: We stopped advertising on Facebook

#46

Post by chflamplighter » Fri, Jan 10, 2014, 4:19 PM UTC

orclev wrote: post #41

wpietri wrote: post #32

Earlier quoted context omitted.

> I don't really think [brand advertising] has anything to do with it. [...] Soft drink choices come down to availability most of the time. Coca Coca spends about $3 billion a year on advertising. [1] I couldn't find a breakdown for how much is brand-building versus other goals, but I think we can agree it's a lot. That suggests two hypotheses: A) People in charge of a $3 billion budget for an incredibly profitable a…

I'm going to go with B. Just because "everyone is doing it" doesn't mean they know what they're doing. Coke spends a ton of money on advertising because they want more sales and common wisdom says the way to get more sales is to spend a ton of money on advertising. It might work, it might not, but it isn't a simple 1 to 1 thing and it works differently on different people. On a personal note, I grew up drinking Coke…

Completely off topic, but reading this ^^ has made me go and grab a Coke from the office fridge. Can't say I wasn't thirsty but can say seeing the word Coke several times above did have an effect.

Re: We stopped advertising on Facebook

#47

Post by the_watcher » Fri, Jan 10, 2014, 4:20 PM UTC

I've run millions of dollars worth of Facebook ad campaigns. "Like" campaigns are the equivalent of brand advertising, a world in which there are no directly measurable metrics, so advertisers judge their performance based on metrics like "Did your ad campaign increase awareness?". Also, surprisingly, the most effective way I found for actually acquiring likes cheaply was to run direct response campaigns focusing on clicks to website, offer claims, and website conversions. So we got the best of both worlds, cheap fan-getting, as well as DR conversions. Basically, what I found was that to get their desired result of "people who visit your website then like the page," it is much more effective and cheap to focus on driving them to your page.

Re: We stopped advertising on Facebook

#48

Post by polymatter » Fri, Jan 10, 2014, 4:20 PM UTC

morley wrote: post #28

mercer wrote: post #25

Earlier quoted context omitted.

If that is true, why would these companies spend so much on advertising?

I don't think the person you replied to is 100% on the money, but assuming he is, the companies would still need to advertise so that the venue or the restaurant purchased that product. And the venue / restaurant is going to choose what they think people like, so smart brands would still advertise to the end consumer.

If you are advertising to decision makers in a restaurant, there are probably much more effective ways of reaching them than mass TV ads.

Re: We stopped advertising on Facebook

#49

Post by the_watcher » Fri, Jan 10, 2014, 4:23 PM UTC

netcan wrote: post #44

I think Facebook is making mistakes. Adwords grew explosively, but relative to the expectations of Facebook, Google looks patient. Adwords didn't start off with ten million customers with endless budgets. They started off letting people buy $20 worth of ads at 5¢-50¢ per click. Some people figured out ways of selling ebooks or whatnot at a profit and figured out things like split testing, conversion tracking and such…

"The keep moving the posts in an attempt to find a formula rather than making good tools."

I disagree. They have been rapidly improving their tools (which in the past were absolutely useless). The improvements are the main thing driving the change, and they are using what they hear from advertisers to inform their changes. The difference between Facebook and Google is that the intent piece of Google made building an ads product that is essentially native and noninvasive to the users much simpler than Facebook. The WSJ piece from recently spelled it out, but the leadership of Facebook only recently started thinking about putting its best people on the ads product.

Re: We stopped advertising on Facebook

#50

Post by the_watcher » Fri, Jan 10, 2014, 4:25 PM UTC

joelrunyon wrote: post #2

I've spend quite a bit of money on facebook ads for various of my own businesses & clients & I've basically stopped everything for a few reasons. I can't rationalize playing FB's game anymore. With the recent decrease in page reach, you're basically paying double time for FB. Once to "get" the fans and then again to "reach" them. Sure, we saw an increase in site activity, but it was debatable whether or not that actu…

Don't worry about promoting from your page to your fans unless you see high repurchase value from that channel. If most of your fans are on your email list, definitely don't bother. Use lookalike audiences and unpublished page posts to try and acquire new customers from Facebook. It's really not a great channel for retention (in my experience), but it is fantastic for acquiring new customers.