Advertising to Facebook Fans Improves Conversions, Says Study

Source: ReadWrite Biz
By John Paul Titlow
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The cost of converting people to sign-up for events, purchase products and register for services decreases considerably when businesses run Facebook advertisements that target existing fans, as opposed to non-fans. Registration acquisition costs can be 44% cheaper, while event sign-ups cost 33% less and purchases are 15% cheaper to achieve.

This is according to a recent blog post on Inside Facebook, who was privy to data from the social advertising agency TBG showing these results. Over the course of a thirteen-client, 4.1 billion ad impression study, TBG found that targeting Facebook fans was more effective than targeting non-fans when it comes to these specific types of conversions.

It makes sense that consumers who have already declared their appreciation for a brand are more likely to purchase their products or sign up with that company. If I'm not yet acquainted with a given brand, I'm probably going to be far less inclined to spend my time or money with them.

To get consumers to that point, these data suggest, businesses would be wise to invest more effort in acquiring Facebook Fans, since these people appear to be so much more inclined to act.
Thanks to studies like this, we can begin to see the answer to that ever-elusive question: Does all this social media stuff actually offer any ROI to businesses?
Explains Josh Constine on Inside Facebook:

For instance, if a health care company planned on acquiring 1 million registrations over a year via Facebook ads at $10 per registration, it could save $4.4 million by advertising to its Facebook fans instead of the general Facebook population. This means if the cost of attaining enough fans from which to secure 1 million health care registrations is less than $4.4 million, the company has produced a direct return on investment on its Facebook fan acquisition strategy without even counting the value of being able to communicate directly with the fans through Page updates.

Results may of course vary depending on industry, market and the nature of the ad campaign. But by analyzing billions of ad impressions TBG is able to provide a pretty solid and reliable sample size.

What have you been seeing with your Facebook ad campaigns? Do fans or non-fans seem to offer greater value? Any other take-aways?

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Homer Nievera Business Development. Digital Marketing. Social Media.
http://homernievera.net