Facebook vs. PPC

Advertising for small businesses

Facebook vs. PPC

Before the widespread use of the Internet, small to medium sized businesses (SME’s) might have used a combination of free ads, yellow pages and local radio/press to get by. Even up until 2010 few SME’s would use PPC advertising.


Companies without an agency might find it complicated, while others were simply priced out as big brands made certain PPC terms prohibitively expensive. Out of all this, SEO became a more appealing option and this is why your inboxes get bombarded with (often comical) SEO approach letters.

 

How Facebook changed this

The advent of Facebook Ads changed the accessibility of granular advertising for SME’s, meaning you didn’t need a dedicated marketing department to reach an audience of thousands. It enabled companies to target people by region (like PPC) but in a way that was closer to display advertising, with images & text. On top of this, only a tiny budget required. Today, this budget is as low as £1/day.

 

A short history of the Facebook Ad

When Facebook originally introduced sponsored posts in January 2011 many users questioned whether it was becoming too commercial and intrusive. Come March 2012 Facebook had rolled this feature out to mobile and people doubted whether ads on mobile would work given the small screen.

As we now know, mobile has gone from strength to strength and the introduction of the tablet cemented mobile advertising as a proven channel for communicating with prospective consumers. While both PPC & Facebook advertising has evolved, Facebook pushes image-led creative that naturally lends itself to the smaller screen & app driven use of mobile, unlike Adwords that tends to lower user experience of a mobile browser.

Facebook ads represent the most accessible and cost effective advertising solution for SME’s, achieving multiple objectives such as brand awareness, traffic to website & ROI driven data for less than a 50p per click.

The average cost-per-click (CPC) being 0.30p vs. Adwords £1.53. Average costs aside, we recently ran two campaigns; one in Europe/ Latin America, the other in Exeter each returning 0.04p and 0.03p respectively. This was exceptionally low!

 

The buying funnel

The reason behind the increased cost for Adwords is due to the biddable process; the higher the demand – the higher the cost for businesses bidding on that term. An example of an expensive keyword would be ‘travel insurance’. It’s a general term that is relevant for lots of brands in an already highly competitive industry. Unsurprisingly, terms like these are often owned by the big high-street brands as CPC’s of £15+ price out SME’s.

Nevertheless, long-tail keywords are still a viable solution. Long-tail keywords are less popular keywords as they have a lower search volume and less competition to rank for. For example, ‘family holidays’ vs ‘pet friendly family holidays in devon’.

If your objective is attribution, revenue or to simply be seen when people are actively searching and your intended keywords are not excessively expensive then PPC is a great option, especially for high margin products. However if you want to get potentially relevant visitors to your website and increase your companies awareness online then Facebook should be seriously considered. Even if you don’t have a Facebook brand page.

Facebook does not target via keyword terms, so there is no bidding war like you might get with a PPC campaign. Instead it operates in a similar way to display advertising (web banners). It uses data such as education, employment, interests, location, age, gender, and relationship status for you to select your key demographic and target them with visual, cost-effective adverts.

The key democratising element of Facebook advertising is that the website is unique in its volume of reach, engagement & granular level of personal data.

 

Return on investment

It could be argued that Adwords has contributed to many businesses (& agencies) undervaluing brand awareness. It’s been the dominant form of paid advertising for over 10 years and in terms of revenue it still dominates Facebook (Q4 2014: £10.33bn vs. £1.43bn).Brand awareness is what people most commonly associate with Facebook advertising but gaining a more comprehensive tracking setup via a conversion pixel gives you the option to be far more calculated on ROI.


 

Facebook tracking pixel


Despite this accessible tracking and the ability to go a step further with retargeting against recent visitors to your site or email database, HubSpot found that in 2013, 34% of businesses do not calculate inbound ROI at all.


If you are interested in discussing your current activity and to see whether or not you have the right solution in place, drop us an email. We’ll be happy to help.

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