The ROI for Facebook Advertising

I have been reading a lot of bloggers that are speaking about their horrible return on investment for their Facebook advertising campaigns. As I mentioned previously, there were reports of advertisers getting a 0.04% click through rate on average for their campaigns. Even if their ads were not effectively targeted, this is pretty bad. So how do you increase the ROI on Facebook advertising? Three words: develop an application. Facebook application development has become the most cost-effective form of advertising. An interesting statistic shows that close to half of all Facebook applications have less than 500 users. So how can I say that Facebook applications are an effective medium of advertising when close to 50% are having nominal results? There are two reasons that those applications are failing to reach the critical user base to experience exponential growth: their application sucks and they are not marketing their applications effectively.

I have seen way too many applications that aren’t good or don’t provide a great value proposition to the users. If you want to experience amazing results from your Facebook application, you better work to develop an amazing application. Secondly, once you develop that application you better market the hell out of it. There are a number of techniques for marketing your application that I won’t delve into now (I don’t want to give away my trade secrets), but you need to market the app. If you expect that simply adding your application to the Facebook application directory will provide you with exponential growth, you are in for a surprise. The days of every application getting hundreds of thousands of users are long gone. By effectively reaching out to targeted users within Facebook you can experience exponential growth within a matter of days and maintain that growth for weeks. Prior to adding the application to the directory you can expect 20 – 50 percent daily growth with close to 10 percent of those users visiting your own website (if you are using this as a marketing tool). After you add your application to the directory you can expect an increase in growth for a period of time. While the growth rates vary from one application to the next, they are still phenomenal rates of return on your investment. So for all those that are saying that Facebook is a horrible place to advertise, go develop your Facebook application and tell me if you still think that’s the case.