I’ve always been a bit skeptical about just how profitable social media really is.
But below are the results from some tests I’ve been running that are promising.
Really, what I’ve been trying to answer is whether I should be putting my money into places like Facebook® or stick with Google® Adwords or do both.
My recent speedbumps with Google make social media pretty darn attractive (despite my earlier post about some trouble getting Facebook® ads approved). It seems that Google is changing and slowly going the way that all big companies end up going.
The numbers from my test below remind me of the early days of Google® Adwords.
Now this niche I’m talking about is a pretty small niche, but you can flirt with six-figures with only about 300 customers ordering every other month. The product wears out, so the customer has to come back and order more.
I like that part.
In the past, pay-per-click has pretty much been my only paid traffic source. In particular, I’ve used it to generate newsletter subscribers.
It’s been a while (I put this business on hold for a bit to concentrate on other stuff) since I’ve used pay-per-click ads for this business, but to the best of my memory, I used to pay somewhere between $1 and $2 per new newsletter subscriber. So to be conservative, let’s just say $1 per lead.
Considering my average order value and customer lifetime value, that’s no sweat.
So that’s about $1.00 per person I can contact from pay-per-click (Adwords and Yahoo).
Here are the results from a recent Facebook® campaign to generate FANS.
For this campaign, I spent $228 to generate 1255 clicks and end up with 604 fans.
That’s 604 people that I can talk to about something they’ve already told me they’re interested in.
Before social media, those 604 people (I’ll call them subscribers) would have cost me over 600 dollars on Google® (mainly because there are quite a few advertisers who aren’t too savvy when it comes to marketing and just keep throwing more money at Google®).
Plus, with Adwords, you lose the viral component. So if you use Adwords to generate 100 leads, that’s all you get.
There’s really no synergistic effect where you spend enough to get 100 leads but actually get 400.
With social media, that can happen, no problem. In fact, if you’re actually selling something people want it will tend to happen.
With Facebook® and other social media, you can spend $1 and get back $4 worth of leads because someone else spread your message for you.
I’ll take it.
Now I can’t verify that ALL of those fans came from clicks, but I can (obviously) verify that all the fans were generated by my ad or by the “viralness” of Facebook®.
So here’s the quick (and non-scientific) roundup:
| Traffic Source | Cost Per Lead |
| Google AdWords® | approx. $1.00 | Facebook® | approx $0.38 |
Now you can argue whether or not my “Fans” are buyers or not.
But I’m not interested in immediate sales as much (even though immediate sales are clearly up). I’m interested in the number of qualified people in the conversation I’m having about this particular product.
I realize this “not being able to completely track results” thing is direct marketing heresy or something. But I’m interested less in following the rules and more in whatever’s working right now.
There’s a reason that marketers are finding their response falling and their big over-hyped launches falling flat.
As Jeffrey Gitomer always says, “People Don’t Like To Be Sold, But They Love To BUY!”
And now that people can SPEAK and share information with each other online (thanks to Facebook® etc.), they’re no longer interested in having a sales message smack them in the face every time they read their email.
With social media, you can sell without interrupting, which gives a completely new feel to the whole process.
But does talking lead to sales?
Ahhhhh….. good question.
The answer seems to be, “Most likely, as long as you know what you’re doing.”
What I know is my sales are up. And I’m communicating with people I doubt I would have ever found via traditional pay-per-click.
But better than that is that other people are communicating about me with each other. That’s golden right there.
And what’s more, since I haven’t been able to actually GET a pay-per-click ad going on Google® for this business, I know pretty much that social media is currently responsible for my traffic.
(Some of my Adwords keywords coincidentally overlap with some company’s trademark for something TOTALLY not related to what I’m selling. It’s enough to trip Google’s trademark flag and send my ad to the Under Review abyss, even though a high school kid could make the determination that we’re not talking about the same thing. Instead, my ad has been “Under Review” for about 2 weeks. No thanks Google®)
And here’s what’s even better…
If you haven’t noticed Google® Adwords has gotten pretty crowded.
If you’re competing against people that know what they’re doing, you can usually do pretty well. You just have to know more. And that’s easy to do.
But when you’re competing against advertisers that don’t know what they’re doing and simply keep throwing money at Google®, well… you can do well there too… but I find it more annoying keeping up with that.
Here’s what I like about social media:
I think social media has a nice barrier to entry that will most likely keep it profitable for some time.
That barrier to entry is that it actually takes time and work to do it right. You actually have to take the focus off of you and put it squarely on the people you are talking to. (I think they used to call that old fashioned selling.)
That’s game over for a lot of people who aren’t serious. And that should keep most people away over the long term. At least the lazy ones.
So in a nutshell, here’s my super secret social media system. It has 6 steps.
1. If you have something no one wants or wants to pay for, give up on social media and all of the “secret marketing techniques” for now and work on getting something that will actually sell.
2. Figure out if your market can even be reached via social media. Some can’t.
3. Treat people like people. Not like subscribers. Not like numbers. PEOPLE. Real People with names. They tend to like it that way.
4. Get dirty and actually care about your folks. Start TALKING to them instead of trying to make them do what you want.
5. LISTEN and you’ll know how to move forward towards helping them.
6. Go to Step 1.
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