Advertising your software on Facebook (=Fail)

Facebook previously didn’t allow the advertising of downloadable software. Someone told me that they had relaxed this policy, so I checked their guidelines. Sure enough they have removed the offending line in their guidelines that used to say:

No ad is permitted to contain or link, whether directly or indirectly, to a site that contains software downloads, freeware, or shareware.

It says in their guidelines that downloadable software that does naughty things such as “sneaks onto a user’s system and performs activities hidden to the user” is not allowed, which is fair enough (see section 14 of their ad guidelines for the details).

Woohoo! As part of my ongoing project to try every legitimate form of promotion known to man, I can try advertising my seating planner software to, for example:

I ran 5 different ads over a couple of weeks. For example:

advertising software on facebookTrying to fit an attention grabbing and informative ad into the very limited strapline and image size was challenging. But I didn’t spend too long agonizing over the ‘creative’ (image and text), as this was just a feasibility study. The biggest problem was the minimum bid prices. Facebook was recommending I bid at least £0.40 per click. Given that the majority of my customers buy a single licence for £19.95 and typical conversion rates for clicks are around 1%, I would be likely to lose money if I bid £0.20 or more (especially when you consider ecommerce fees and support). I bid £0.10, but got no impressions at all. I bid £0.20 as an experiment and got a reasonable number of impressions. As soon as I dropped the bid to £0.15 the impressions slowed to a trickle.

Here are the stats from my experiments, as reported by Facebook:

Impressions: 357,366
Clicks: 310
Click through rate: 0.087%
Total cost: £46.60
Average cost per click: £0.15
Average cost per 1000 impressions: £0.13

Any of you who are used to Google Adwords might be surprised how low the CTR is. But apparently this is quite a reasonable CTR for Facebook. This isn’t too surprising when you consider that people are on Facebook to socialise, rather than to search for stuff.

Of course, the most important metric is the profit. So how many licences did I sell? According to my own cookie tracking: zero. Zilch, nada, nothing, not one. Cookie tracking isn’t 100% reliable, but it seems that a 1% conversion rate might be highly optimistic for a facebook ad. Advertising a £19.95 product on Facebook to people who might be planning to get married obviously wasn’t going to be profitable given my price point, the minimum bid prices and low conversion rate. So I created a new ad to try to target a more focussed demographic, who might convert better and perhaps buy one of the more expensive versions of my product. Ad number 6 was disallowed one minute after it had been approved.

Eh? This ad was very similar to the previous 5 approved ads and for the same product. Their email said:

The content advertised by this ad is restricted per section 5 of Facebook’s Advertising Guidelines. Restricted content includes, but is not limited to: 1. Downloadable products that may affect the user’s computer or browser performance in unexpected or undesirable ways; 2. Get rich quick and other money making opportunities that offer compensation for little or no investment, including “work from home” opportunities positioned as alternatives to part-time or full-time employment or promises of monetary gain with no strings attached. 3. “Free” offers that require users to complete several hidden steps or make additional purchases in order to receive the promised product. We reserve the right to determine what advertising we accept, and will not allow the creation of any further Facebook Ads of this type. Ads for this product, service or site should not be resubmitted.

I didn’t feel my ad/product violated any of those criteria. It was clear in the ad that only the trial was free (not the product) and it doesn’t do anything nasty or sneaky. I emailed them for clarification. Here is the response:

Hi Andy,

Thanks for your email. Please note that we don’t accept ads for downloadable products through our self-service advertising channel. We reserve the right to determine what advertising we accept, and will not allow the creation of any further Facebook Ads for this product.

In order to maintain legitimacy of the products and services promoted on Facebook, ads for downloadable or installable products are only permitted through a direct sales partnership with Facebook. At this time, we’re only able to provide this service to a small set of qualified advertisers.

We’re committed to providing high-quality support for all of our advertisers, and we’ll keep you and your business in mind for the future growth of our ads product. In the meantime, please continue to email us here with any questions you may have and we’ll be happy to answer them for you.

If you have any further questions about why your ad was disapproved for Restricted Content, please refer to our Help Center about downloads at:

http://www.facebook.com/help/?faq=18665

Thanks,

Gloria

Online Sales Operations

Facebook

So apparently, they still don’t accept advertising for downloadable software, unless you are an approved partner, because it ‘may affect the user’s computer’ (even if it doesn’t ). This wasn’t at all clear in their guidelines and they let me run 5 ads before they enforced it (these ads are still running BTW). Thanks Facebook, I like you less with every passing day (and I didn’t like you much to start with). At least I got enough data to show that I was unlikely to ever get a return on advertising a £20/$30 product. I also console myself with the fact that PerfectTablePlan is doing better financially than Facebook (after 7 years and with 500 million users Facebook are finally cash flow positive, but nowhere near recouping the estimated one billion dollars in venture capital) and my product will hopefully still be selling profitably after Facebook has  been buried by the ‘next great thing’ that comes along so regularly in the world of social media.

29 thoughts on “Advertising your software on Facebook (=Fail)

  1. Ross

    I suspect they use low quality outsourced labor to check each advertising. It can be rejected once or accepted in other case by chance. They don’t spend too much time to check the details and look for some words to reject you advertising in a second, like “Download … free …”

  2. Steph

    Thank you very much for sharing the information. From what I had heard Facebook advertising is pretty low margin. I still don’t get how some people are able to come out ahead.

    Btw, you may be interested in this recent blog post by someone who was able to drastically reduce their Facebook CPC, to a point where it could almost be worthwhile. Assuming you have more than 0 sales ;)

    http://www.dipoll.com/blog/2010/11/six-steps-to-run-cheap-and-successful-facebook-advertising-campaigns/

    Of course in that post there is no discussion on sales conversions or anything as such, just on traffic and CPC. Two very different things…

  3. Sunil T

    A billion here, a billion there, soon you’re talking real money…

    I find it ironic that facebook is uber-protecting users from potentially instrusive content delivered by ads, when their own privacy practices have been questioned so often.

  4. Johann

    I had recently a chat with a marketing guy of Red Bull. He is responsible for Portugal and Brasil (apparently portugese speaking countries). He told me that FB ad is extremely efficient for their goals as a FB profile contains many more information about the user than a Google profile does. As such the placement is much more accurate.
    He even told me that he can serve the Portugese and Brazil market for as much as 600 Dollars / month and that the statistics guys have a very positive strong relationship between the moment they started to use FB ad and sales.

    1. Andy Brice Post author

      I can see how FB might appeal to big brands that cater for particular demographics. If the lifetime value of the customer is high enough (RedBull fans might drink 100s of dollars of the stuff a year) and you don’t fall foul of their ambiguous and obscure guidelines then FB ads might be worthwhile financially. 600$/mo doesn’t sounds like much though. And I wonder if the Red Bull guy is able to show any correlation between FB ads and sales. If not he might just be wasting money.

  5. Jon Harrop

    We had a similar experience with Google ads (except we didn’t get banned!). However much we spend on them, we recoup it back with no extra profit. So I think they are a complete waste of time for us.

    The strongest correlation I have observed is that we get around 20p in sales for each visit to a sales page. We don’t get anywhere near 1% visit->sale conversion though. Then again, if we did then I could afford to buy a new house every year!

  6. abc

    They’re saying that for a £0.13 CPM, they can’t afford to police the software people offer to make sure it never has spyware snuck it. Seems reasonable enough to me.

  7. Charlie B

    Wow, nice experiment. I had heard that using facebook advertising was not generally worth it. I took a look at buying advertising for the company I work for a while back on the various social networks, but found that it really wasn’t cost effective compared with other types of advertising. We ended up making a FB page for the company, and trying to build a community instead. I think the company ended up paying for some special features of that, but I just worked on some of the research aspects, not the final buy decision.

    For a microISV, I think FB is still a ways off from being a profitable advertising channel. Thanks for putting some numbers in there!

  8. Gubatron

    Facebook certainly needs to ease it a little bit on what they accept as ads, specially with software, it’s really sad they are so bi-polar in what goes through and what doesn’t. Sometimes your ad goes through, you raise your budget and then it’s pending again, and then denied, it’s a total piss off.

    Now, If I were you I would never expect to sell a single copy out of mere 310 clicks, that’s just almost impossible. Your conversion rate needs a lot more clicks for you to sell your product. I didn’t check your purchase page, but I’d try to make sure the purchasing process is a convenient as possible maybe you are getting willing customers but there’s something in the process making people leave.

    1. Andy Brice Post author

      If I can’t make a sale in 310 clicks then I have no chance of getting a return.

      My adwords and organic traffic is converting just fine, so it isn’t a problem at my end.

  9. Peter - Software Marketing Secrets

    I have the exact same experience.

    My ads weren’t disapproved even thought offering downloadable software, but the bid prices are way up there and trying to keep a reasonable just led to my ads being shut down instead. I didn’t mind cause the conversion rate wasn’t there anyway.

    Getting better results even with Google content ads.

  10. Christopher Bruno

    I cant believe Facebook wont allow PTP advertising, given the other shady, questionable products that are advertised on there (e.g. online degrees from fly by night diploma mills). They should clearly see that PTP is a legit product from a legit business, and should be bending over backwards to get Andy’s money.

    The good news is that facebook sucks as an marketing alternative for a mISV anyway, so their idiocy in this manner is really a blessing in disguise.

  11. Christopher Bruno

    Follow up: I did some advertising on facebook earlier this year for a web app I run for math teachers. Here are my stats:

    Targeting
    who live in one of the countries: United States, I…See More
    age exactly 18 and older
    who like math teacher, mathematics teacher or physics teacher
    who graduated from college
    who speak English (UK) or English (US)

    Imp. Clicks CTR (%) Avg.CPC($) Avg. CPM ($) Spent ($)
    97,675 136 0.14 0.13 0.18 18.01

    My measure of success is how long a clicker stays on the landing page. For facebook, the result wasnt bad, it averaged over a minute. Nonetheless, my web app is FREE, and I think thats key. Facebook users are used to getting things for free.

  12. Anthony

    Is it me or you are bitter? The last sentence really gives the impression that you are not happy that your ad was rejected by Facebook and so you decided to put Facebook down.

    Your post is about advertising on Facebook but the last sentence (especially “Facebook [...] buried by the ‘next great thing’”) has nothing to do with it.

    Objectively, if your Ad had not been rejected and if it had driven traffic to your site would you have still written the last sentence and criticised the way they run their own business?

    1. Andy Brice Post author

      I am quite happy to write off £46.60 as an experiment. But I am annoyed that they didn’t make it clear in their guidelines that you can’t advertise downloadable software (unless you are a preferred partner). And this is on top of all the other reasons I already had to dislike Facebook.

  13. Ryan

    To everyone claiming “Sour Grapes” – clearly its a yes… and so? Nobody likes having their time wasted.

    @Andy – a bit OT and sure you’ve been asked/considered – but have to thought of moving PPT to this ere ‘cloud’ thing I’ve been hearing about? ;)

    A web app would solve a lot of problems besides Facebook (installation/tech support/piracy). It sounds like Patrik McBingo is having good success and wouldn’t go back to downloadable.

  14. David haddad

    It’s too bad that Facebook doesn’t allow advertising downloadable eosycrsfor small companies. But your experiment might have ended up differently. You ran your ad for a very short period. And my sense is that while there is intent to marry among the group you targeted, the practical effort to organize the wedding would only happen at the end of that engagement period. My suggestions are two fold. One, is target your ad to people who ‘like’ brands, companies, or services related to weddings. Two, try to sell your software to wedding organizing companies, that they an add to the services they offer, and maybe offload some of the work they have to do along with the couple to setup the seating arrangments. In this case the ad would be targeted topeople who list ‘event organizer’ or ‘wedding planner’ as their job.

  15. Gary Elfring

    You need a better way of tracking orders from facebook ads (although I think fb ads are a waste of time for virtually all software).

    We use Google ads all the time, but do *not* use Google analytics to track orders. We don’t use Analytics because we do not want Google to know just how profitable some low cost ads are. (Somehow the minimum bid for those ads seems to rise when you get a lot of sales.)

    So how do we track orders from specialty ads? We just duplicate the landing page on our web site and put a coupon on it. Offer the customer a discount, or something extra if they enter a coupon code on the order. Only the specialty landing page has this coupon offer. Make sure there is no link from your web pages to this specialty page. So the only way to get the coupon is to click on an add. Then count the number of coupons used.

    1. Andy Brice Post author

      >We use Google ads all the time, but do *not* use Google analytics to track orders.

      You can Google conversion tracking without using Google Analytics.

      >Somehow the minimum bid for those ads seems to rise when you get a lot of sales.

      I don’t think Google would dare to use analytics data to set minimum bid price. But I could be wrong.

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