Google Adwords vs. Facebook Ads – It Was No Contest

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
Facebook 286 1 (0.35%) $242 $242
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.

The Setup

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:

  1. Who live in Chicago, IL
  2. Between the ages of 18 and 45 inclusive
  3. Who are in the category iPhone
  4. English speakers only
  5. Men & women.
  6. Any education level.
  7. 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.

The Results

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.

10 thoughts on “Google Adwords vs. Facebook Ads – It Was No Contest

  1. Do I have your permission to post this on Twitter and LinkedIn? This is actually a really great study!!!! On another note I wish that I would have found you last year when I drove away in my car and my iphone screen was smashed in traffic. Somehow the phone still worked, but the screen was ruined! The Apple store in Deer Park told me I was SOL, and I could not find a company to assist.

  2. You most certainly have my permission to repost. As to your old phone, if you still have it around, give us a shout. We can probably still fix it for you. That way you’d have a spare phone or you could sell it on Ebay for some decent money.

  3. Scott says:

    See the problem here is you obviously have an idea how to do adwords as you have done them for 5 years but you don’t have a clue how to do Facebook Ads and that’s why your results suck.

    The worst part is you decide to publish it like you actually know what you are doing hereby continuing the myth that Facebook Ads don’t work.

    If you don’t know how to drive a car and you get in it and can’t get it to go does it mean the car doesn’t work? No!

    And if you are great at riding a bike would that make a comparison between the 2 methods of transport accurate. No. Coz you’d be advocating the bike.

    That’s effectively what you have done here….it’s not as obvious to the wider community but to those that understand how FB ads work, it’s just as stupid.

    • @Scott: Instead of calling us “stupid”, how about contributing something useful to the conversation by telling us what we’re doing wrong. I would love to find another good online advertising outlet for our business and if Facebook could be that outlet, I’d love to hear how.

      Please enlighten all us.

  4. Aamir says:

    Hi – interested to know if you were actually able to make it work.

    We sell furniture online.

    We tried and saw a 4x difference in conversion rate i-e adwords conversion rate was 4 times better.

    Since facebook cpc was half that of adwords – this left us with adwords being 2 times better then fb and fb not being a go.

    Perhaps there is a way to make it work better.

    • I haven’t attempted another shot at Facebook advertising since my post. That said, I’ve been wanting to try again. See the link above on Facebook advertising in one of my previous comments.

      One thing I’d like to know from you is if the Facebook ads you ran were profitable? If so, then, even if there not as profitable as Google, I would definitely still be running them. No reason to shut them off since it’s a completely different class of advertising than Google.

      Question: Were your Facebook ads showing a positive return on investment and, if so, how were you measuring that?

      • Aamir says:

        They were not showing a positive return on investment.

        I measure ROI as +ve contribution margin = gross margin on your sale – conversion cost.

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