The value of Facebook advertising: a Q&A with Dennis Yu

May 18, 2011
Posted by: Matthew Hammer, VP- Marketing

Dennis Yu, the CEO of Blitzmetrics, is the best guy I know for helping brands to integrate Facebook advertising into their overall marketing plans. He’s sharp and opinionated, which is why I know he’ll make such an outstanding contributor to my panel on best practices in Facebook News Feed Optimization (NFO) at BlogWorld & New Media Expo next week in New York City.
To get you warmed up for our BlogWorld discussion, here’s a brief Q&A with Dennis on the value of Facebook advertising.
Bryan: Advertising isn’t often talked about as a critical component in effective News Feed Optimization. In general terms, can you explain why advertising does matter?
Dennis: Content is content, whether you pay to send the message or not. Marketers have no problem paying an e-mail application service provider to send e-mail messages to their customers, so it should be no different to pay Facebook to be able to reach fans in their News Feed.
From a pure News Feed Optimization standpoint, Facebook’s EdgeRank algorithm, as we are told, doesn’t over or underweight interaction that was originated from an ad. And if you think about it, why would a “Like” from a Sponsored Like Story be worth any less than one from the News Feed?
Facebook has been pushing new ad units that leverage automatic connection targeting. In other words, they are making it easier for brands to do word-of-mouth marketing — now called News Feed Optimization in a social context.
At the end of the day, NFO is about getting the folks who love you in real life to express that love to their friends. And we have to use a variety of mechanisms to get a combination of exposure (NFO) and engagement. For you to even get that interaction, you must show up. And advertising is how Facebook wants us to get that going.
Bryan: Advertising to acquire new Facebook fans vs. advertising to better engage existing fans. Which approach is more integral to NFO?
Dennis: Would you rather I cut off your left arm or your right arm? Seriously, the prescription for any particular brand is based on where they are in their Facebook maturity.
If you have only a few thousand fans, running ads to those fans isn’t going to give you much power. If anything, you risk campaign fatigue by overcommunicating to this audience. If you have a ton of fans already (and “a ton” is different for everyone), then you have to examine what your relative health is and how that compares against your goals.
If you’re Lane Bryant and looking to get a million fans by the end of the year, there is a greater current focus on fan acquisition than engagement. If you’re Red Bull, with 18 million fans, then you want more engagement on that base.
NFO should not be an end to itself, but rather, a set of techniques that tie directly to a client’s goals. If you want engagement, go for engagement— and know how to measure it and what is a reasonable expectation. Same for fan growth.
Do not pursue increasing a metric such as EdgeRank, which cannot be measured externally or be actionable. In the world of paid search, there is a current obsession with Quality Score and the many factors that go into it (primarily clickthrough rate). Raising CTR is a good thing, but isn’t raising profits better?
This post is part of an ongoing “31 Days of Facebook Marketing” series from LiveWorld.