In a 2014 study conducted by Neustar, social media advertising was found to be the most effective form of online paid advertising for increasing impressions, clicks and conversions at a low cost. As the popularity of social media advertising has increased, it is understood that most businesses now allocate around 28% of their marketing budget to social media advertising.

Is this the case?

As a digital marketing agency, we are asked about the differences between social media advertising and Google AdWords quite often. We are asked about the benefits, the costs and the likely outcomes for our clients. Our experience so far has shown us that, yes, some forms of social media advertising are far more cost effective than Google AdWords, and one of those is Facebook Advertising.

If you are operating in a business to consumer market, Facebook advertising could be the ideal cost effective solution for you. With many similar benefits to Google AdWords, Facebook Advertising also has a few other benefits which trump Google, the most important being a lower average cost per click.

Let’s start with the pros and cons.

Google AdWords

Pros

• Detailed measuring tool makes your campaign easy to track
• Large potential audience
• Immediate influx of traffic
• Complete control over your daily budget and maximum cost per click
• Instant return on investment (You can easily define a cost per conversion and understand at what point your profit is made)
• Targeting options, including regions, time of day, days of the week, and specific websites (if using Display Network)
• Different advertising options, including Display Network, Search Network, and Remarketing
• Targeting those who already have an interest and, therefore, are more likely to convert into sales

Cons

• If set up and managed incorrectly, it can be extremely costly
• Setup and management can be very time consuming
• Limited space within your ad (Three lines of text when you are using Search only)
• Unless you use other forms of Google advertising, such as Google Shopping and YouTube Advertising, you cannot include images or videos to sell products and services
• Depending on your industry, the cost per click (CPC) can be substantial (For example, one client paid between $9.90 and $22.84 per click)
• Depending on your target market, the majority of the large potential audience can turn out to be irrelevant

Facebook Advertising

Pros

• Campaigns are easy to track
• Immediate influx of traffic
• Complete control over your daily budget and maximum CPC
• Instant return on investment (You can easily define a cost per conversion and understand what your profit is)
• More targeting options, including, towns, regions, age, likes/interests, income bracket, and other demographics
• Easier to set up than Google AdWords
• The ability to reach people early on in the buying process, before they are aware of their need, whilst capturing those who are aware of the need in a subtle way
• You can use images and videos to capture the interest of your target market, helping you to sell your products and services
• CPC is relatively cheap, depending on your industry (On average, our clients have paid no more than $0.61 per click)

Cons

• If set up and managed incorrectly, it can be costly, but less so than Google AdWords
• Depending on your target market, the majority of the large potential audience can be irrelevant (For instance, we would not recommend Facebook Advertising if someone only served or supplied their products and services to one town)
• There is no option to target your ads at certain times within the day or on certain days of the week unless you choose a lifetime budget (Most of our clients request daily budgets)
• Only really suitable for those operating in B2C markets.
• Reaching people too early in the buying cycle could potentially reduce your goal conversion rate

The main con of Facebook Advertising is it is not recommended for B2B companies. However, we have tried LinkedIn with some of our clients, and have had similar results to Facebook Advertising.

Shall we take a look at some case studies?

Our first client provides tandem skydiving experiences from their airfield near Cambridge. They came to us wanting to use other forms of advertising to increase their sales conversions.

Because they were already using Google AdWords, we recommended Facebook Advertising.

We started with an image campaign attracting people within a two-hour radius of their airfield.

Targeting the ads to those who were interested in extreme sports and topics similar to skydiving within a suitable age range, North London Skydiving Centre was able to reach between 7,300 and 19,000 people.

We ran this ad for a month at first. Since the results were favorable, the client decided to increase their activity. We recommended trying a video views campaign. Providing us with the promotional video they wanted to include, we once again targeted this campaign to those who had an interest in extreme sports, lived within a two-hour radius, and were of the appropriate age.

Lifetime results of campaigns

Since February, NLSC has received over 14,000 website clicks, with an average click-through rate (CTR) of 1.25%. They have paid on average $0.58 per click, and have received a conversion rate of around 10%.

Since March, NLSC have received over 105,096 video views with an average result rate of 30.84%. They have paid on average $0.02 per video view.

In terms of website clicks, they have received over 6,000 website clicks, paying an average of $0.18 with a CTR of 1.79%. From the website clicks they have received within the video views campaign, they have achieved a goal conversion rate of around 3%.

Putting it all together

Since February, NLSC has received more than 20,000 website clicks with an average CTR of 1.52%, and has paid on average $0.38 per click for a conversion rate of around 6.5%. Also, NLSC has seen a sharp increase in the amount of group bookings and the size of those group bookings as people have commented, shared, and tagged their friends and family within the different adverts.

How do the different visitors behave?

We have found, via NLSC’s Google Analytics, that the visitors of each advertising channel behave in a very similar manner.

Those from Facebook visit on average 1.98 pages, with an average session duration of 86 seconds. Those from Google AdWords visit on average 2.21 pages, with an average session duration of 1 minute 51 seconds.

We also know from our data that 6.5% of people from Facebook Advertising convert into a booking. As you will see in the next paragraph, 10% of those coming from Google AdWords convert into a booking. Of course, with both of these methods, there is also the chance that people will look, research elsewhere, then come and book at a later stage due to the nature of the products and services being sold.

Comparing Facebook Advertising to Google AdWords

Since February, NLSC has received over 84,000 clicks, with an average CTR of 2.14%. They have paid on average $1.49 per click, and have received a conversion rate of around 10%.

Therefore, comparing Facebook Advertising to Google AdWords, NLSC has received more clicks using Google AdWords, but they have had to pay over $1.11 more per click. The overall goal conversion rate for Google AdWords was better, but they paid more per conversion, ultimately making less profit from it than Facebook Advertising.

We are not biased

We have also worked with other clients who have experienced significant success from Facebook Advertising when compared to Google AdWords.

Another client we have worked with, Country Boarding Kennels, provides boarding kennels for cats and dogs, as well as training and grooming from their location in Hertfordshire. They have received over 1,700 website clicks in a month from their Facebook Advertising campaign, paying on average $0.33 per click and receiving an average CTR of 1.84%.

Comparing this to their Google AdWords campaign, they received less than half the amount of clicks (just over 400) from a similar budget. They paid, on average, $1.03 per click, and received a CTR of 3.57%.

Their Facebook Advertising in this period contributed to 23.08% of their booking goal conversion, the same amount as their organic traffic. Comparing this to the amount Google AdWords contributed (7.69%), it is clear that Facebook Advertising is an extremely cost-effective solution for them.

Our logic

Although the case studies in this article show that Facebook Advertising is quite obviously the more cost-effective solution, we would not recommend relying solely on it for sales.

Like any marketing plan, there must be a variety of marketing tools and advertising channels. You want to capture your target audience at every stage of the buying process, whether that’s through Facebook Advertising, Google AdWords, PR, SEO, or print advertising.

What we would recommend is that instead of just relying on Google AdWords for online advertising, consider what other channels would probably work best for you, then test, test, test.

A few tips for writing a compelling campaign

As a helping hand, here are a few tips to get you started on the road to creating a successful Facebook Advertising campaign:

• Keep your information short
• Include an offer or price
• Include keywords
• Include persuasive or interesting imagery/video
• Include your URL above the image/video in the text section
• Use taglines and hooks to draw your potential customers in (i.e., "Make This a Year to Remember)

What have your experiences with Facebook Advertising been like? We'd very much enjoy reading of your experiences in the comments below.