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In our continuing series on Facebook advertising, today we turn our attention to e-commerce brands using Facebook and the Facebook Platform to reach their target niche demographics. While many small to medium sized etailers drive a large portion of their sales through search marketing, many are beginning to experiment with different marketing channels inside Facebook to reach new customers.
Inside Facebook recently sat down with Dave Eisenberg, VP of Marketing at Bonobos, a rapidly growing designer and retailer of high-quality hand-made pants for men. Below, Dave shares advice on reaching the right target demographic inside Facebook, his perspective on how the Facebook advertising market has changed over recent months, and the opportunities and challenges Bonobos sees ahead in 2009.
Thanks for your time today Dave. Could you give us a little background on your experience with Bonobos on Facebook?
We were one of the earliest folks to invest in the Social Ads platform. I quickly became very excited because the clicks that we were able to get from our targeted demographic were less expensive than those we acquired from people searching for men’s pants in particular.
Some of the early experiments we ran were against schools where we thought our products might be popular. We also had a particular pant that was done in the Chicago Cubs blue colors, and we were able to run ads against people in Chicago who had a Cubs interest. It was really easy to do targeted advertisements and track the clicks. From there I was able to use Google Analytics to track what was converting, and it was great to see what I could pay for a new customer.
We were one of Facebook’s top small business advertisers last fall. Since then, so many more people have jumped onto Facebook’s advertising platform that the costs have gone up, and the ROI decreased somewhat in December. We’re just not as unique any more.
Why did you want to be one of the earlier adopters of Social Ads?
In a way that is very different from SEM, Facebook offers a chance to do passive display using the information that Facebook users are sharing to help your targeting. For example, last year we named one pant after Obama and another after McCain, and we could target ads for each of them to people who supported one candidate or the other. This was a really cheap way to get people to show up on the site and check us out for the first time.
In addition, our ad was a breath of fresh air for people who were dissatisfied with the quality of the ads generally. We have spent the bulk of our efforts targeting men between the ages of 25 and 45.
How do you measure the ROI on your Facebook campaigns?
Any new business is interested in how many visitors it has. However, what moves the bottom line is a person who tries out our product, enjoys it, and comes back. There’s nothing as important as new customer acquisition for us.
That being said, visitors are important and word of mouth conversations that help people hear about us are also important. There are a lot of influential people on Facebook, and our ads have done better as more people over 30 have signed up for Facebook.
How would you suggest Facebook needs to improve its advertising solutions?
For one thing, in some cases national advertisers are starting to price out local advertisers. Clicks that started in the $0.10 range are now above $1.00, so Facebook will need to address the impression limitations that will arise. They almost need to subsidize the local advertisers.
However, in the bigger picture, Facebook needs to undertake figuring out who is willing to use Facebook for shopping and who isn’t. People who are should receive better ads, they should see more ads, and they should be more expensive to reach. Many of our clients say that we’re one of the only ads they’ve ever clicked on. We want to play against the relevant folks.
It’s part of a broader question about how internet advertising is going to evolve on a performance basis. I’d love to pay for acquired customers. Facebook could figure out more ways to promote our page. If it costs the same amount to promote my Facebook Page and my website, I’m going to choose my site because I can track what users are doing there. Facebook has worked for us for quite a long time, but now it needs to find the next new thing.
If Facebook were able to more deeply measure user engagement after the click, that could make for a more efficient pricing system.
Yes, you almost need a way to track user satisfaction or a mechanism for users to provide more guidance on what kinds of ads they would like to see. For example, my friends who are gay have said that they have seen racier ads on Facebook. Hearing that has made me more conscious about what I put in my profile. It’s almost like you want people to opt in to certain kinds of advertising.
There may also be some interesting opportunities with Facebook Connect coming up.
Facebook Connect is going in a great direction. All of the things that it enables are very powerful. Anything they did that would do more to let me show that I want to integrate shopping with social media would help. For example, integrating on landing pages. In a lot of ways we want the benefits of Beacon, but in a way that users understand. Deeper integration with sites where users want to engage with the ads would be great for everyone involved.
Thanks a lot Dave. Any final thoughts?
Facebook has been a very predictable channel for us. However, we’re starting to get squeezed out a little, so Facebook should start figuring out how to get small businesses back into the game more.
Dave was also kind enough to offer a special discount on Bonobos pants to readers of Inside Facebook. You can get $25 off your first purchase of Bonobos by using the coupon code insidefacebook at Bonobos.com.