Business of Advertising on Facebook

With lots of companies to deal with, tons of data to manage and ample of ads to design for companies, Hussien Fazal CEO of AdParlor, comes up to share with us the vast knowledge of advertising on Facebook. AdParlor manages around billion impressions a day for various brands, game developers, ad agencies. It exclusively manages the GROUPON`s Facebook advertising. We are going to discuss the interesting information about the business of Facebook advertising.  Before we start with the ads, we put a light on what works on Facebook? Where google is intent based advertising on the contrast Facebook is not. Intent means if a person has to buy something like books, book a travel ticket or something, the person go for the purchase and makes a payment through his credit card. This leads to a larger amount of deep conversion opportunities. On the contrary, people go to Facebook as a casual surfing, where there is a lesser chance of people going to make a purchase intently. This makes Facebook as a shallow convertor for the business point of view.  But now days, ad agencies are working on making such ad which helps in generating intent based purchases on Facebook itself.

There are basic Creative tips to create and develop an ad for Facebook. One should use small and clear text with the proper brand or product name. Images of the products should be used with bright colours and proportions to make the ad more attractive and approachable.  Before we proceed further we get some idea about the Ad optimization. It gives us an idea how much an ad will cost, how much will be the fan cost and click cost? One of the most important factor in deciding the ad cost is CTR (Click through Rate). In this, company or ad agency pays Facebook some fixed rate for each click. Higher is the click rate lower the rate of an ad will be. For example there is an awesome looking ad of some fashion accessory. People click on the ad every time they surf Facebook.  People click and click and click and there are around a million hits on the day. The rate could be as low as 1 cent per click. Now to put an ad on Facebook, Ads API partners go to Facebook, put titles, images and text to create an ad, sets its targeting and upload an ad. Instead of one single ad, the API partners creates thousands of variations of a single ad so that it keeps the ad fresh and attractive every time it is displayed.

There has been a lot of trends changing in the Facebook advertising in the years. There is a trend of sponsored stories in the Facebook advertising these days. Sponsored stories are like something will appear on a user’s news feed and that is used as an ad unit. For example you like Samsung and you click on the Samsung Facebook page and like it. It will appear on your page as well as your friend circle will come to know about the same. In same manner anyone from your social circle can click on that news feed and will go to that products page. It’s more like becoming as a fan of that product. Now the question arises, how much will be the fan cost in such way? Fan cost in dependant on the click through rate. As in sponsored stories a fan page is made for the fans of that product or service. Fans like that page and starts getting news feeds about that products on their pages. This is how the click for that rate in generated and the fans cost is decided as per the CTR. This trend of sponsored stories has also helped in boosting the conversion rates. Hussien Fazal discussed that the trend of advertising is moving towards the stories. Now the stories are not just settled at liking and sharing them but it is more towards engaging the people with custom actions like Mr A is playing some game, Ms P is shopping at X Mall and so on.