Facebook advertising can deliver conversion rates greater than 2X Google Adwords

See our newly published data about U.S. facebook users (New)

InterneXperts is an Internet strategy and marketing firm, specializing in Facebook advertising. Recently, we ran a two month green marketing campaign for a major international outdoor apparel and equipment manufacturer and retailer. The objective of the campaign was to have consumers register for an environmentally-focused social network that was branded with the manufacturer’s eco-friendly product line.

InterneXperts ran the campaign in the UK and the US on Facebook, Google Adwords, Yahoo Sponsored Search, and Microsoft network. Facebook traffic converted at 3X the rate of traffic from Google, Yahoo, and Microsoft:

Facebook Advertising Conversion Rates by Ad Network
Facebook 4.56%
Google 1.41%
Yahoo 1.13%
Microsoft 1.70%

More importantly, the overall cost of registering a new user was 75% less with the Facebook traffic than with the Google traffic.

What makes advertising on Facebook so effective?

Our research shows that for every 100 consumers that might be interested in something, fewer than 10 actually go to the trouble to search for that item on a search engine. Facebook and other social networks focus on the other 90 consumers. For example, I love my iPhone and generally I am interested in learning about and potentially buying iPhone accessories. This is one of multiple interests that I have at any one time, but my interest is not so pressing that I want to go to google to search for “iphone accessories”.

So, how does Facebook know that I might be interested in an iPhone accessory? Facebook’s answer is “interest categories”, a highly-effective form of behavioral targeting. When Facebook users set up their page, they can provide a variety of unstructured information about their interests, hobbies, careers, etc. Facebook scans this information, and when enough users share the same common word (e.g. “iPhone”), they create an interest category that an advertiser can target.

What makes these interest categories so powerful is that they are completely self-selected. Without any prompting, if I decide to write in my interests that “I love my iPhone” it must be relatively important to me and something that I’m keenly interested in. Hence, if I saw an ad for an interesting iPhone accessory, there’s a pretty good chance I might click on the ad to learn about it. By the way, there are more than 400,000 facebook users in the US that can be targeted with the word “iPhone”.

Demographic targeting is also important

You might be surprised to learn that the fastest growing segment of the Facebook populations is 50+. What may surprise you even more is that our consistent experience is that the older the facebook demographic group, the better the response rate. In a recent campaign, facebook users in the 35 – 64+ age group, clicked on an ad at twice the rate of the 18 – 34 age group.

Finally, gender also very important. While across facebook the users are split 56% female, 44% male, that distribution changes greatly by age group. In the 35+ age group, women outnumber men on Facebook 2:1. More importantly, in many of our campaigns, our research shows that women, particularly in the 35+ age group, click on the facebook ads and convert at 2X the rate of men in the same age groups.