We’ve heard a lot recently about the benefits of advertising (or not) on Facebook: General Motors’ Joel Ewanick doesn’t think it works for him, WPP’s Sir Martin Sorrell says it’s good for branding but not harder-working ad campaigns (assuming there’s a difference).
Here Craig Robinson (left), editor of Facebook campaign tool Qwaya, explains how you can work the real cost of recruiting those much sought-after Facebook fans.
Understanding the Cost Per Fan
Regardless of whether you’re an extremely popular product in the real world, if you’re just opening up shop or introducing a new brand to the public at large, everyone operates on a clean slate when they first create a Facebook page – and everyone is looking for the same thing: Fans.
Having fans on Facebook is incredibly important if you’re hoping to have any measure of success over the long haul. The more people who like your ads and your page, the more people will ultimately find out about it. It’s a cycle that needs to be created and the first step in the process is finding fans. However finding fans can be a costly venture.
While you’re dealing with things like CPC and CTR, you also have to consider CPF – the Cost Per Fan.
On a regular business site, you’re looking to gather email information and to engage your customers. You’re essentially trying to make fans out of them. Facebook allows this to be a literal reality and, as long as you’re correctly marketing to people, you can build up fans. Of course, it comes as a cost. You have to work out what you’re paying to get these fans.
Why CPF Metrics are Important to your campaign
The first step here is to actually calculate what you’re paying per fan. This is the only real way to understand the significance of your efforts; it’s also an invaluable piece of information to use going forward. Understanding this new metric can help you to revise any campaign to collect more fans at a lower cost.
To gauge your CPF, first open up your ad manager and run the conversions report. What you’re looking for here is the Advertising Performance report on the ads report page. From here, you will be able to tell which ads are doing well. Then it’s just simple math. You’re looking for your conversion rate versus your cost per conversion. If each ‘like’ is a fan, then each conversion is a fan. It’s a new name for an existing metric, but it’s a new way to advertise in order to target fans specifically for a low cost.
There are some other ways as well to make your Facebook Ad campaigns more cost efficient and you can find tips through this guide article to Facebook costs.
As you track your conversions and understand what’s working and what isn’t, it becomes simple ad management. The goal should always be to test your ads and to tweak your formula until you find a successful campaign. And by understanding what people are liking, you can significantly drop your CPF using different Sponsored Stories and different CPC rates.
Your cost per fan is always there. Just because it now has a name doesn’t mean you weren’t always paying for fans. In fact, that’s what businesses have always done with advertising. You’re paying for conversions. The goal here should be to recognize what you’re paying so that you can maximize what’s working to cut costs.