Facebook Advertising

Facebook Advertising is comprised of various advertising methods via the social network Facebook. Companies can post ads for their own fan page or external websites. Each advertiser has various grids for available external sites.


Since its establishment as a campus network in 2004, Facebook has developed into a global social network, which is now used by more than one tenth of the world’s population. In order to finance the immense costs for servers and development, founder Mark Zuckerberg had to find ideas to monetize the network early on. The basic orientation of “thefacebook” lends itself excellently to display advertising to target groups, because all users provide their hobbies and other important targeting criteria in addition to their gender.

Shortly after the launch of “thefacebook,” small companies or even students were able to book “flyers” with which they could specifically advertise on “thefacebook.” The cost at the time was about 10 to 40 Dollars a day for displaying a “flyer.” Flyers were often used to promote parties or other events on campus. In the first year the daily rate for ad displays was changed to a fully-fledged advertising model on a cost per click basis. Marketers were able to use network-internal targeting to control the orientation of their ads and to minimize wastage.

PartyPoker was the first major corporate customer to join the social network in 2004, which by that time was called “facebook.” The operators of Facebook received high advertising revenue through very high commissions. In 2005, Apple launched its own Facebook group and paid 1 dollar to Facebook for each new member. Following this model, more large brands joined the successful network.

Since 2008, any company can start their own Facebook page regardless of size or revenue. The intention behind it was that if a company has their own page on Facebook, it will also spend money to make this page known. Facebook Ads were a tool for this purpose.

As early as 2009, Facebook enhanced targeting for its advertisers. Moreover, advertisers could create their ads and control the placement of banners themselves.

Through the launch of the mobile Facebook app, the social network eventually reached even more target groups for its advertisers and expanded the reach of the ads. In 2012, Facebook launched mobile ads within the Facebook app and mobile version of the social network. The introduction of the Like-button for external websites in 2010 increased the number of hits on Facebook pages.

To date, Facebook Advertising is constantly being expanded. The social network is increasingly competing with the great rivals Apple, Google and Amazon. With the launch of Facebook Exchange in 2013, Facebook eventually entered the retargeting sector and offered companies real-time advertising based on the real-time bidding principle for its ad spaces.


Placing ads on Facebook[edit]

The requirements for using Facebook advertising is a private Facebook profile, a fan page or a business account. Additionally, advertisers can also book their ads through a special business account. However, this must first be applied for. Another requirement is a monthly minimum advertising volume of 3,000 Euros. The advantages of a business account are personal support from Facebook and advanced analysis tools.

To place an ad, you only have to do three steps:

  • Content and formal design of the ad
  • Targeting
  • Specify a daily budget and bid proposal

Facebook offers CPC (cost per click) or CPM (cost-per-mille) billing models to its customers. The cost per click is based on click rate. The better the click rate, the smaller the actual click price, presumably.

Forms of advertising on Facebook[edit]

Facebook offers different ad formats to advertisers, which basically can be divided into two groups: standard ads and sponsored posts.

  • Standard ads are always structured the same way, with title, URL destination, image and text. These ads can direct either to an external URL or to a page within Facebook, even events or apps.
  • Sponsored stories: to date, customers have seven different options to choose from. Such stories appear as an “extended newsfeed” and direct exclusively to Facebook fan pages. Interactions by fans, the frequency of “like button actions” or activities within apps play a role. Thus, sponsored stories are dependent on the degree of interaction of users within a Facebook fan page. The following formats are possible: like story, page post story, page post like story, app used story / game played story, story share app, check-in story, story domain.

Targeting in Facebook advertising[edit]

Facebook has continuously expanded the targeting options possibilities for its advertisers. If an ad is created, various targeting options can be selected. If the user selects a new option, the number of potential recipients of the ad automatically adjusts in its own box.

Following are the targeting options provided by Facebook:

  • Age and gender: Advertisers can specify in which age group they advertise or if they want to address men or women.
  • Location: Ads can be targeted specifically to countries or cities. The location of the recipient is determined by querying the IP address as well as the information in the user profile.
  • Links to Facebook: Advertisers can specify whether they want to exclude already existing fans of their Facebook page from their advertising.
  • Interests: Targeting according to user’s interests is one of the strengths of Facebook advertising because you can refine your selection based in part, on the “Like” indications of users as well as their actually stated interests and Facebook topics.
  • Advanced demographics: Facebook offers its advertisers the option to address users specifically on their birthday or target advertising based on sexual preference or the relationship status of users.
  • Work and education: Based on user specifications, advertisers can target their ads based on profession, industry or the employer.
  • Links on Facebook: Specific users or user groups can be excluded.

Facebook Ads versus Google AdWords[edit]

So far, it is assumed that Facebook advertising is used mostly for brand building or in support of advertising campaigns. Thus, it distinguishes itself partly from Google AdWords as being just a section of SEA. Google offers its customers on the AdWords platform the option to place ads directly above the search results lists. It can be assumed that there is higher purchase intent for users who click on AdWords ads, while Facebook users click on a Facebook ad within the network probably less from an interest in buying but more from a general interest in a product or out of curiosity.

Criticism of Facebook advertising[edit]

Although the targeting for Facebook Ads is widely praised, there are always voices that criticize the fact that Facebook keeps the rules for the quality of ads not very transparent. Likewise, it is not easy to see why a particular ad is posted with preference by Facebook and another is neglected. Facebook tries to answer as many open questions as possible in a separate Help Center.

Link to SEO[edit]

Facebook advertising is a classic marketing tool for branding or to promote campaigns. Through exact targeting, target groups can be addressed very precisely with advertising on Facebook. Since there is the possibility to direct to external landing pages on the WWW directly through Facebook ads, Facebook advertising can be used for short-term traffic increase similar to banner ad campaigns. At the same time, a brand can be established through additional banners on Facebook. The result would be more direct type-ins and the strengthening of the brand in search engines like Google.

If you strengthen your fan page through Facebook advertising, you can indirectly control the optimization of social signals because the stronger your fan base in a social network, the more Likes and Shares of your website you are going to have on the net.

Web Links[edit]