Facebook Changes Its Advertising Tools to Fight Google

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

facebook-advertisingLast summer, Facebook came out with something called a tracking pixel, which is a bit of code that lets advertisers track how their customers come to their sites from ads on Facebook. For some companies, such as Little Passports, which is a small company that sends a packaged to children each month to teach them about geography and history.

In the summer, it started to test ads to see which were more effective in bringing in more customers. Last June, the firm spent $30,000 on Facebook advertisements and the firm earned about $130,000 for the month. But by the end of the year, the company was spending $150,000 per month on Facebook ads and it was earning $700,000 per month.

The owner of the site said spending $150,000 is a lot for a firm that earns $2 million per year, but she noted that they were able to triple their customer base in a few months.

This new tracking pixel is just one of many changes that Facebook is making to its advertising tools. Advertisers now have the ability to specify objectives such as how to boost traffic to a site, how to get more ‘likes’ or how to convert more sales. They now can choose if they want ads to show in Facebook newsfeeds or in a column on the right side of its pages. And they are able to target demographics that they want to hone in on precisely.

Facebook, which is now seeing apps come out that let you sell on the site, has stated publicly that it has made these changes in part because only one million small businesses advertise on its site, although it has 25 million small businesses on there. On the other hand, Google Adwords is used by many more small businesses, although some say it is too expensive for them to use.

Experts say that it is clear that Facebook is trying to make this an alternative to Google Adwords, but the Facebook activity is more passive so it’s a bit different. That is, you are seeing ads based on things that you put in your profile, sometimes years ago. You are not necessarily actively looking for a product.

Another change in recent months has been sponsored ads in news feeds, which is where most users spend their time. These ads are labeled as sponsored but can be harder to distinguish as advertisements.  The ads that run on the right side of Facebook have lower click through rates and some experts say their value is very low. Those ads also do not run on mobile applications.

Let’s wait and see how effective Facebook is with its new tracking pixel. We don’t know if they will ever be able to challenge Google, but it may allow advertisers to use Facebook more effectively.

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