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Why Pay for Facebook Advertising?

Facebook has initiated a push toward paid advertising. However, the question is: Is paid advertising worth it to your company?

Why Pay for Facebook Advertising?

Posted Monday February 01st, 2016 by in Trends + Technology.

In November 2007, Facebook introduced the world to a marketing concept that would change the face of advertising for multi-billion dollar and mom-and-pop businesses alike. In one single day, over 100,000 business pages launched, giving companies the opportunity to reach out to their target audiences with little more than some text, photos and a few clicks of a mouse. The ad rate for this new form of marketing? $0.00.

This free marketing tool seemed too good to be true, and in October 2013, the business world discovered that it was. Analytics began to show that pages were only getting about a 16% reach to the full business page audience. This number continued to drop, hitting an average 6.51% by February 2014. Today, the organic reach is between 1-2%.

What happened?

Facebook explains: The increase in posted content has grown so exponentially that the company had to develop an algorithm “designed to show each person on Facebook the content that’s most relevant to them.” At any given time, each person’s News Feed has over 1500 available posts, but the capacity to show only 300 of them. Unless the specific user is consistently engaged with your business’ posts, which in Facebook terms means liking, commenting or sharing, it is unlikely that your content will be deemed relevant enough to reach the personal News Feed. If this is the case for every user who follows a business page, you can see how reach has declined. Therefore, growing your audience is essential because when you consider the percentage of feeds that will show your posts at any specific moment, the larger number of people who like your page, the greater your overall reach.

In response to declining organic reach, Facebook has initiated a push toward paid advertising on the site. However, the question is: Is paid advertising worth it to your company?

The unequivocal answer is: Yes.

Sproutsocial, “a social media management and engagement platform for business,” has compiled some astounding Facebook statistics, confirming that the site usage is growing by double-digit percentages every year. With this amount of potential customers in one place, you certainly don’t want to ignore the value of Facebook as a gainful marketing resource. The shareholders are certainly paying attention; the Facebook stock is up 160% from its IPO.

However, while a billion-person-plus audience sounds great, are all of those people actually a part of your target audience? When you use paid Facebook advertising, you get to select exactly who you want your marketing to reach.

The Facebook ad tool allows you to choose an audience by a number of different factors:

  • Location
  • Demographics (age, gender, interests, language)
  • Behavioral Interest
  • Shopping behaviors (what types of things are they shopping for)
  • Connections (friends of friends of friends)

Then, once you get your target audience’s attention, you can encourage people to:

  • Talk about your Page and posts
  • Connect with your business on Facebook
  • Go to your website
  • Shop or take action on your website
  • Install or use your app
  • Shop in your store
  • Invite others to your events
  • Redeem offers

GEM Advertising has seen substantial growth in its clients’ marketing reach when utilizing Facebook paid advertising, and highly recommends it to every client we work with.

One GEM client with a modest $4,000 per month native advertising budget had the following results for December 2015:

  • 14,804 people taking action
  • 4,196 clicks on posts
  • 817 page likes
  • 14,220 engagements
  • 268,189 impressions
  • 180,746 people reached (at an average CPM of $13.95)

Clearly the benefits of paid ads are extensive, but the cost is minimal, typically at a 25‒33% or higher discount to the cost of traditional media buys. One of the most pragmatic aspects of social media is its flexibility and the ability to change, alter and redirect campaigns to meet a brand’s needs.

The face of Facebook advertising may be changing, but it’s doing so in a way that will allow you much more success in reaching out to your specific target audience with the flexibility necessary in our constantly-changing market.

Remember that while we all love free things, you do get what you pay for. So if you’re looking to profit from using Facebook marketing strategies, make sure that you allow an allocated budget for native advertising that will allow you to reach a larger, and more importantly trackable, audience.


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