People have been crowing about how Facebook newsfeed ads get insane CTR and larger placement. But if you’re a performance marketer, you care about CPC and conversion rates.
Jacob Sapochnick, a San Diego immigration attorney, tested newsletter signups on the right-hand side and in the newsfeed. Here is what happened:
The newsfeed ads got a 3% CTR, which is 61 times greater than RHS (Right Hand Side) at 0.49%.
Yet, the cost per conversion was 38 cents vs 45 cents in favor of the RHS placement.
Notice that RHS hit a frequency of 80.1, which means he BOMBARDED these attorneys. Yet, 73 of the 782 lawyers he reached converted. That is 9.3% of all people who saw the ad.
He spent $27.82 to drive 73 leads in this first ad. And we thought getting lawyers to engage socially would be difficult!
This second ad spent $29.14, a tad bit more, and drove 65 conversions. The frequency of 2.7 is lower since it’s the newsfeed. Similar reach.
The newsfeed ads cost $15 per thousand impressions (CPM), while RHS was only 44 cents. The cost per lead difference is marginal and in the realm of statistical noise. Thus, the trade-off in CTR washes out the CPM differential.
WHAT THIS MEANS
- Performance-based marketers should test which placements work best for them. Some types of messaging, offers, and businesses will do better in one placement vs another. Test it.
- When there are features available only in Power Editor or the API, use them to get an arbitrage advantage in performance. Once the features make their way to the web-based ads manager, the differential gets washed away.
- Be willing to bust long-held myths, such as that ads will burn out at high frequency or that giant audiences don’t perform. Sometimes things change or it’s just not true.
Mr. Sapochnick used optimized CPM to drive engagement on his most recent posts for a penny, helping him get to 100,000 fans.
What have you noticed recently?