In my Alcohology. In the first five days it sold 79 units. Not very good. Numerous people recommended Facebook Ads, so I decided to give it a shot. For the past week I’ve been playing with them and this my field report.

The Platform

Facebook Ads work via bids. You choose an amount to pay per click (CPC) or per 1000 impressions (CPM). Bid too low and it will not be served. Once created and configured it will be automagically served to users. You set daily and lifetime maximums to control how much you spend.

The CPC recommendation for my first ad was about $.70 – $1.20. Everytime I changed something the recommendation changed. Now it tells me $2.70 to $4.00. The range for impressions (CPM) is $.40 to $.70. They change drastically and randomly. I do not know why.

My First Ad

What does an ad look like? I’m glad you asked!

It’s a small block that appears on the side of a user’s page. There is a 110×80 image, 25 character title, and 135 character description. Clicking the ad takes you to an external URL, fan page, application page, event page, etc. I sent users to my website. Next you get to take advantage of Facebook’s most powerful ad feature – targeting.

All my ads featured the same targeting. Users who live in the United States/Canada/Australia/United Kingdom, are aged 21-30, and are interested in Beer/Wines/Spirits or iPhone. I could not target users who were interested in Beer/Wine/Spirits *and* iPhone, only or. This gave me a total potential reach of 22 million people.

Campaign #1 – Alcohology

A campaign is a group of ads. For my first attempt I used seven images with identical text. This would let me figure out which image worked best. The budget was $30 total and $.80 per click.

 

This is kinda fun. My ads were shown to 73,000 unique users out of the 22 million targeted. There were a total of 19 clicks, 18 from just 3 ads, with a click through rate (CTR) of .013%. The tiny sample size is a bit of a problem. The data is heavily skewed with just a few clicks.

You may notice that the ads were not evenly served. The ads that were clicked were shown more. This is nice, but can bias results. The issue may go away with a real budget.

The actual price paid is less than the bid amount. You pay less if the ads are served to users outside of your specification. Via click reports I found that users are put into age buckets, 18-24 and 25-34, even though my specified range was 18-30. I believe clickers in the 18-20 and 31-34 ranges cost less money. I wonder if this can be min/maxed for fun and profit?

Campaign #2 – Alcohology Redux

The first campaign had a few clear winners – the bright blue and bright orange background images in particular. For my second campaign I targeted the same users and created 11 ads all using the orange robot image, but each with different text.

I made a few mistakes here. The first campaign spent $14.19 in 36 hours, while the second only spent $5.47 in 60 hours. What happened? The biggest issue I believe is the sheer number of ads. In all campaigns ads were served equally up to ~3000 impressions. After that the ads that received clicks continued to get impressions while the others were left to die. Survival of the fittest.

The base ad in campaign #2 had a reach of 6,728 and 1 click for a CTR of .01%. The exact same ad in campaign #1 had a reach of 34,463 and 8 clicks for a CTR of .015%. That’s a massive difference. It’s hard to draw a conclusion.

Campaign #3 – Alcohology Cubed

Despite campaign #2 having questionable results I decided to combine my best images from #1 with the best text from #2.

This is surprising. In campaign #1 orange out performed blue. Yet in this case orange received zero clicks while blue got 14! My guess is that the orange ad had a poor start so Facebook decided to let it die. The blue ad however had a CTR of .017% which seems respectable. It did not use the entire $15 budget.

Campaign #4 – Alcohology the Fourth

For the fourth run I took the blue ad from #3 and decided to give impressions, rather than clicks, a shot. Exact same targeting parameters as before, but with a bid rate of $.20 per 1000 impressions and a $20 budget.

Wait, what!? Zero reach? Zero frequency? Twelve clicks? Twenty dollars? What happened? Honestly, I don’t know. Facebook’s stats reporting appeared to, and I quote a friend, shit the bed.

I learned an important distinction here. Facebook shows, or at least tries to show, reach. Reach is the number of unique users the ad is served to which is not the number of impressions. Impressions is reach times frequency.

Campaign #4 generated 166,000 impressions (via extrapolation…) for $20. It was the first campaign to spend the entire budget, which it did with ease. Campaign #3 generated 89,000 impressions for $9.90. Paying per click cost (CPC) less than per 1000 impressions (CPM) for me.

In theory an effective ad is cheaper to pay CPM than CPC. In practice I don’t know if that’s true. Who knows what Facebook is doing behind the scenes?

Campaign #5 – Alcohology: Alcohol Harder

My fifth and final campaign was the same as the fourth, but used the orange image instead of blue and had a $10 budget.

Curiously, like campaign #4, there is no information on reach or frequency. Very strange.

The fourth campaign had a CPM bid of $.20 and actual price of $.12. I initially set the bid rate to $.10 for campaign #5. After twelve hours the total spend was only a few cents. Cranking the bid back to $.20 led an instant rush of views. Dropping it to $.15 led to spending most, but not quite all, of the budget. Clicks and click rate were unimpressive.

Final Stats

I spent a grand total of $59.54 for 62 clicks during the experiment. In the three days before my first ad went live I sold only one copy. During the campaign I sold 23 units generating $48.30 in revenue. How many of those sales are due to ads I have no way of knowing.

With word of mouth sales Facebooks Ads could break even quickly. Is it worth reinvesting what meager revenue I have into ads? I don’t know. Maybe?

Conclusions

What have I learned? Honestly, I’m not sure. Playing with Facebook Ads feels like a game. An expensive, gambling like game, but a game none the less.

I’ve read a quote that said “Over 50% of money spent on marketing is a waste. The problem is that no one knows which dollars work and which are wasted.” Facebook Ads definitely feel like they could be a worthy investment. With no way of knowing how many clicks are converted into sales it’s a big guessing game.

I’d love to hear what kind of results other folks have had. I’ve heard a click through rate of about .015% (1.5 in 10,000) is common. If anyone can share numbers please do so in the comments! :)

Future Endeavors

What’s next? First, I’m going to stop all ads for a bit. If sales drop back to zero that may be an indication the ads were working. If sales hit and stay at zero I’ll turn ads back on and see if there is a change.

It does requite a bit of focus on create and monitor ads. I made various duration, budget, and bid adjustments while campaigns were running. I’m working on an iPad version and may halt most ads until then.

Cheers.