What does Facebook mean to you? Facebook is many different things for a lot of people. To a business it can be a way to create strong relationships with new and existing customers.

Who uses Facebook? Your Customers
The ability of Facebook to provide a wide array of functions makes it the most popular site on the Internet. As an advertiser you want to be where your customers are and they are probably on Facebook. Over 30 million Brits use the site giving it a 49% reach of the UK population and a 70% reach of the Internet population; meaning 7 out of 10 people have a Facebook profile. A Facebook user is no longer just the 18-34 year old market, although this does make up a little over 50% of British users, there are increasing numbers of older and younger users. The split between Male and Female use is 48.1% and 51.9% respectfully.

Facebook Use vs. Watching Television
In the UK television viewing is declining as more Brits spend time social networking instead of watching TV. The continuous improvement in smartphones and tablets has helped with the national daily average of time spent on Facebook using smartphones being 2 hours. This might seem a lot of time but it demonstrates how well Facebook is suited for mobile use, making it ubiquitous.

Overall daily Facebook use stands at 2.5 hours per day, with nearly a quarter of users spending 3.5 hours per day. TV on average only gets 2 hours daily of our time. Needless to say the advertising potential for TV is only limited to the ad breaks whilst Facebook advertising can be experienced with every page view. The other benefit is you can track Facebook more using analytics tools far more efficiently you can TV making it much easier to work out your return on investment. For many companies TV advertising is too expensive, however you can get started with Facebook advertising on a small budget.

Facebook Advertising

Advertising revenue on the site for 2011 is predicted to be twice the volume of spend in 2010, according to eMarketer. With such a massive engaged audience it is no wonder companies up and down the country want to be there. The problem is however many companies lack the knowledge, experience and resources to use Facebook to its full potential. Many businesses are using a 'me too’ approach. However, without direction and strategy you can get lost. Advertising on Facebook, like any website, is fully measurable. The ability to track views, clicks and engagement makes it easier to optimise for finely tuned campaigns.

Facebook Advertising Stats

As with many banner advertising sites the Click Through Rate on Facebook is low. This is because web users are savvy to adverts and can block them out a noise. This being said a well targeted campaign which has good creative and copy can still perform. The average CTR for 2010 was 0.051%. However click costs are cheap at US$ 0.49. Due to the low CTR CPM rates are very cheap at approximately US$ 0.25 and the average cost per fan campaign is currently at US$ 1.07. Costs however do appear to be rising as the competition increases.

Facebook Response Rates

In a report performed by Webtrends where 2.2 million clicks on 11.2 thousand ads was measured it showed people are more likely to click on adverts with age, until the age of 65 when the CTR drops slightly again. The data also shows women are more likely to click on ads. Due to Facebook being a social network and the primary reason for most users still being to have fun industries which are more fun or social tend to experience higher CTRs. News and Blog site ads achieved a 0.17% CTR and Media and Entertainment achieved 0.15%. Facebook rewards these social advertisers with a lower cost per click and greater visibility in the News Feed. This is a similar idea to the way Google AdWords Quality score works.

If your social media agency understands how Facebook differs from other advertising spaces you can use it to your advantage. Display adverts are not the only way to engage with customers and getting a loyal Fan base can increase your website traffic, brand exposure and ultimately increase sales.