Spend on a Facebook page or on Facebook ads?
July 17, 2018
Do Facebook pages hold their promise? Are they efficient at all and if so, in which specific ways? Could they simply be a waste of time for a local business? Here are some documented evidence.
Facebook created its “business pages” to differentiate personal communication (friends & family) from business communications, and to start making advertising money.
In 2012 I published an article in which I took the position that Google+ was holding more promise for businesses than Facebook itself. Time has proven me wrong: Google+ never fulfilled its promise and became a marginalized social network. (I will write an article on this monumental failure and the core reasons behind.)
On the contrary, Facebook has become ubiquitous in our web landscape, and today Instagram (owned by Facebook in case you didn’t know) is quickly becoming the next best thing with a real potential to disrupt seriously YouTube’s revenue model with small businesses.
But first, where do I draw my conclusions from?
Our clients are small local businesses, spread across multiple niche markets:
- Carpet & tile cleaning
- Mortgage brokers
- Entertainment/events venues…
Some of them were “always too busy” to create content, a few of them were eager to create content. “Content” is photos, videos and posts pertaining to their industry and their business. I don’t mean “memes” and “canned” pre-made posts. In my book, the latter type of posts is not “content”, just spam.
So we have worked with multiple types of service professionals and retail outlets, and with two types of owners: engaged and disengaged.
Between 2011 and 2014, local businesses became increasingly aware of the potential of Facebook and gotten somewhat excited with it. Many of them hired web agencies like ours to maintain their Facebook pages and grow their fanhood. From 2015, I observed a wavering in their interest, then a gradual dis-interest. Like a soufflé, the ‘Facebook for business’ hype has fallen, receded. Why?
Facebook pages: Good for reviews, not so good for fans
In the main, the attitude of consumers (Facebook users) towards Facebook business pages remained pretty much the same. After a period of moderate curiosity for these pages, they went back to being rather indifferent to them.
Truth be told, for most local businesses, the volume of interaction of the gen-pop with their Facebook page has been thin.
We have observed over and over that the Facebook pages of local businesses are NOT a place where consumers congregate.
They CAN be places where consumers MEET businesses BRIEFLY, but the latter rarely (if ever) return to a business page they have seen once, except in certain specific industries for reasons I will cover below.
Why is it that Facebook users rarely visit business pages?
1- In most cases, local businesses do not have enough interesting content to post and do not post content frequently enough to keep Facebook users interested in their pages.
2- Facebook remains primarily a Peer-to-Peer social network with an emphasis on friends & family…. and in a more ancillary way, a business-to-consumer network and a consumer-to-business network, where consumers can voice their opinions through reviews. Sometimes, when businesses allow people to comment, consumers vent about their concerns and specific issues.
Aside from the common types of interactions, consumer reviews have become a feature increasingly used by Facebookers in the past 2 years. Most of our clients have seen an acceleration in the frequency of reviews left on their business pages, just like other local business owners (see screenshots below). Many solicit their satisfied clients for reviews: 5-star reputations commands a premium on the marketplace.
But reviews are not ‘fanhood’.
A thin fanhood
Do a quick survey: Take a look at the number of fans gathered by local Facebook businesses pages in your city. How often do you see pages with a 4-figure fanhood? A 5-figure fanhood? They exist, but they are far and between.
Pages with 1000+ fans most often belong to the hospitality and entertainment industries (restaurants, hotels, concert venues)… These places see a lot of foot traffic on a regular basis, and they provide a sensory experience to their patrons.
A hotel stay is a 5-sense experience, good or bad. Same for restaurants, though less rich in sensory content. Entertainment venues solicit all senses.
As people’s senses are solicited, they are more prone to share the experience and Like the page. Fans come back. A great fan-gathering campaign on Facebook will produce a significant ROI for a venue situated in a cool locale.
Not so for trade professionals. An electrician for instance offers little-to-no sensory experience to home owners. Likewise, an HVAC company can’t do much to trigger an interesting sensory experience that will engage people to come back again and again to their business page.
Clients write reviews about the service, but they rarely become “fans”. Fans have had a live experience that they want to speak about and to re-live.
Except when a business provide a sensory experience that can be shown, shared and talked about, its Facebook business page is not a place where people congregate. Most of these local business pages are just not interesting enough.
Thanks but not interested
Why then do local businesses have a Facebook business page? According to many business howners:
- If they are not on Facebook, their competition certainly is…
- When a consumer recommends their business on Facebook, they want to be found in just one click.
Both reasons are more reactive than proactive. Small business owners have a 6th sense: if the ROI is low and slow to increase, they will quickly arbitrage their time in favor of tasks that have proven to get them cash and clients.
Outside of the hospitality and entertainment industries, most local businesses do not rely on their Facebook page to bring a regular stream of business. Their page does not trigger conversations, too few people visit it, and even less people come back to it.
There are however a couple of other types of local Facebook pages that often gather a solid fanhood and attract respectable engagement: artists, designers and specialized retailers in niche markets.
Case of a retailer in a niche market
Renegade Classics is a good example of a specialized retailer with a strong fanhood: 6,500+ fans for their Sacramento/Modesto stores; 2,000+ fans for their Tucson store; Almost 1,000 fans for their store in Baltimore.
These stores are positioned in a niche industry: motorcycle apparel and helmets. Bikers are known to be passionate consumers for everything that is motorcycling.
Additionally, the Tucson store and the Sacramento/Modesto stores are also event organizers. For several years now, they have been holding biker events in their locale and these events have gained reputation and audience. It’s a loop that flows back to the store: a great presence in the community is reflected by a strong following.
A quick survey of their pages will show nevertheless that bikers are not engaging with every type of post: in keeping with the independent mindset of this niche, the fans engage with entertaining posts, local biker event announcements and posts mentioning big sales. Product-oriented posts and regular news do not really engage this crowd. Anything “adsy” or “salesy” garners little attention. It has to be fun and event-related.
Strong fanhood, but weak engagement. How can these businesses bridge the gap?
Almost every time the Renegade Classics Tucson store advertises to its fanhood (target audience: “friends and their friends“), the engagement numbers go up.
Part of the why is linked to the way Facebook curtails the natural reach of a post on a business page.
Facebook wants businesses to advertise, not just benefit from free publicity and distribution.
When you post on your Facebook business page, your post only sees a few percentage points of your total fans… unless this post becomes quickly popular; in which case Facebook will allow its natural reach to expand.
But short of garnering clicks, views, comments, Likes and Shares (engagement) very quickly, any post will die without an audience because Facebook (1) wants to make money on your account, and (2) does not want to pollute their users’ feed (your fans, their users) with your commercial stuff unless it’s paid commercial stuff.
For local businesses, the deal is pretty simple: post things that get immediate attention and engagement, and these posts will be allowed to garner more eyeballs. OR pay to play, and buy your way to a wider audience through Facebook ads.
Brief case study of Facebook ads impact
When Renegade Classics Tucson announces a sale on their Facebook page but doesn’t “boost” the post (i.e., doesn’t turn the post into an ad), the post is seen by less than 100 fans (out of 2,000).
Of this number, engagement can be expected to reach between 3% and 5%. That’s 3-5 Likes and Comments.
By comparison, when a post is “boosted” to reach “friends and their friends“, the post audience jumps to 1,000 – 5,000 persons (depending on $$ spent) and the engagement numbers rise accordingly.
Examples of posts that have not been boosted (left) and been boosted (right)
You can see the post on the left did not reach many people (71 out of 2,000 fans) and only got 3 “reactions” (4% engagement).
By comparison, the post on the right was boosted for a few dollars, reached 3700+ persons and got 145 reactions, including 12 comments and 52 shares. Yummy! The engagement is about the same in proportion of the reach (3.9%) but both numbers (reach and engagement) are much better in absolute value.
Every time Renegade Clasics posts an ad for a sales week-end, this action is complemented by an e-mail blast to a strong list. As a result, sales always draw a crowd.
Facebook ads work for this retailer to announce their sales week-ends. They also work well for their community events.
The odds that a post on your Facebook page goes viral are overwhelmingly against you. So Facebook ads will definitely expand the reach of your posts (or your Facebook page if you promote your page itself).
Next logical question: Do Facebook ads generate sales? Create more fans? At what cost? What kind of money should you spend?
Spending your hard-earned cash
Facebook ads are not that costly, and you can meaningfully test the power of your ads for a mere $20.
In our experience, you will go through a trial-and-error period where you will spend more to become fairly certain of your results. As you build confidence in what kind of results you can get with what type of post and ad spend, your ad spend per post will decrease. Today, our clients rarely spend more than $50 to roll out a small campaign, and in most cases only do a couple of posts (or ads) on which they spend $10 to $20.
The following experiment was conducted for a furniture store in Tucson.
We posted photos of a single piece of furniture on their Facebook page and created an ad for a specific audience. The store did not have enough fans to boost the ad to “friends and their friends“, so we tailored a tight geographic targeting and selected additional “interests”. We spent a very limited budget on that ad ($20), just enough to test the waters. The response rate was satisfactory with a 2.2% engagement (reach 3300+, 89 reactions) considering the test was blind.
We did not sell the piece of furniture, we got 1 inquiry and some additional visibility. It was simply an experiment to see what type of engagement we could get.
If we were to run it again, we could conduct it differently. The sequence we would use is as follows:
- We first need to build the ‘fanhood’ (because promoting to ‘friends & their friends’ has proven to work much better than blind ads)
- We would build a simple landing page on the site to show photos of the product and similar products
- We would run a test ad, with no more than $20
- If the engagement is promising (3-5%) and we get interest (inquiries), we would add to the budget by increment of $10-$20
- If the engagement is below par, we would re-work the targeting and try again.
Bottom line: Don’t go hogwild on any Facebook ad campaign. Test with $10-$20, and progress from there (or stop).
All told, what’s up with Facebook pages?
Should you spend money updating your Facebook page and posting “funny little memes” or “feel-good posts”?
Probably not. This is the playbook of ad agencies and digital media agencies, not yours. In our experience, that’s a waste of money for most local businesses. If your business page does not increase your sales or the number of customers you see at your events or in your shop, don’t hire a social media agency to “grow your page”.
Instead of burning the $300-$600 a month these agencies typically bill to post these “memes”, feel-good or salesy posts on your page, spend $100-$300 on a super-targeted Facebook ad campaign with a really, really, really strong offer (an offer they can’t refuse): this will be more useful if the action is well executed.
Except if you are in an industry that offer a sensory experience, Facebook ads have a proven track record of generating leads. Facebook business pages don’t.
Go with the ads.
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