If you’re a small business owner like me, you’re busy. You don’t have a ton of time to read this or any other articles. So let me start with the conclusion:
Google Adwords is a significantly better and more cost effective marketing tool than Facebook.
For the past 12 days, we’ve been running our first Facebook ad campaign and I’ve been comparing it to our Google Adwords (which we’ve been doing for 5+ years). We saw 42 of the people that clicked on our Google Ad became customers in that time frame. Exactly 1 person that came from a Facebook ad became a customer. I’m not missing a zero there. The score was 42-1. Not even close.
Here’s the full set of results:
|Campaign||Clicks||Conversions (%)||Total Cost||Cost/Conversion|
|Google Adwords||354||42 (11.86%)||$295||$7.04|
The next obvious question is, are these results valid? I believe they are but I’ll tell you how we setup both campaigns and you can judge for yourself. Before I proceed, let me say that if you’re new to all of this and anything I say below (or said above) leaves you confused, don’t hesitate to leave a comment and ask. I’ll happily answer you. You should also feel free to comment if you think any of our methodology is flawed.
To try to make it a fair fight, we decided to focus this study on just one of our repair services at one of our locations. We selected the iPhone 4 screen repair at our Chicago location. We already had a Google Adwords campaign for this and simply had to create a Facebook ad. We linked both of them to the same landing page to ensure no bias once the user showed up on our site.
For the Google Adwords campaign we have it set to show only to people in the Chicago metro area and to target keywords like “iphone screen repair”, “cracked iphone”, etc.
For the Facebook Ad we chose the following settings for our audience:
- Who live in Chicago, IL
- Between the ages of 18 and 45 inclusive
- Who are in the category iPhone
- English speakers only
- Men & women.
- Any education level.
- Any relationship status.
This gave us a total possible audience of 527,520 people that presumably were associated with iPhones.
We consider a “conversion” to be any customer that schedules an iPhone repair at our shop using our online scheduling tool. There is no doubt that some customers schedule by calling us and those we can’t really track. That said, I know from working in the store that a lot more people schedule using the online tool than call to schedule. But there’s no doubt that these numbers are not 100% accurate. That said, I think they’re pretty close.
As shown at the very top of this post, the Google Adwords campaign was far more successful – not just at getting us customers but doing it in a very quick and cost effective manner. A total of 42 conversions versus 1. In addition, the conversion rate is staggering for Google – almost 12%. The reason should be obvious: Someone only triggers our Google Ad if they type something like “chicago iPhone Repair”. If you’re typing that into Google, you probably need our service.
Facebook, on the other hand, gets shown based on someone’s interest in the iPhone. The vast majority of people interested in iPhones don’t have a cracked screen, so they’re not really a potential customer. What’s interesting to me, though, is how effective Facebook was at getting the full $15/day out of us (that’s what we set our daily limit at).
Besides not converting well, Facebook also lost out on some other metrics. Our analytics showed that Google Adword visitors viewed, on average, 3.00 pages, spent 1:57 on the site, and had a bounce rate of 42.75%. For Facebook ad visitors, these numbers were 2.11 pages viewed, 1:04 on site, and had a bounce rate of 63.82%. In other words, about 2/3 of all Facebook referrals saw the landing page and just left.
I have a theory about why Facebook bounce rates are so high. I can’t prove this but I believe it none the less. Facebook gets so many visitors and they spend so much time on Facebook that the odds of an accidental click are high. Looking at the analytics, 111,000 people were shown our ad an average of 8 times each. That’s about 900,000 views in 12 days – or roughly 75,000 views per day. It’s not hard to imagine that some small percentage of those will end up as accidental clicks.
Does this mean that no one should use Facebook ads? Probably not. But the fact is that Facebook is more of an interruptive type of ad. You’re viewing your friends data and something catches your eye, you click on it – even if you have no interest in the product at that moment. Google ads, on the other hand, are interactive. You just told Google exactly what it is you’re looking for and they’re going to show you ads for that exact thing. They have a much higher probability of showing you an ad at the instant you want to buy the product.
Facebook might work great for brand building or for products that a specific demographic always wants (like shoes for all women 25-30 years old with a college degree making $75K/year). But if you have a product that people need when they need it – like buying a car or getting your iPad fixed – Facebook is not the right answer. It’s just not a good bang for your buck. In fact, in our case, we’d go out of business in a hurry if we had to rely on Facebook to generate new customers.