Facebook Ads: The Cheapest Traffic You'll Ever Buy

Whenever people talk about Facebook Ads (or even more generally "Can Facebook justify their $50bn valuation?") the conversation always tends to swing around to how poorly Facebook Ads perform.

That drives me crazy.

For the last four months Facebook Ads have been the single best source for paid traffic for my startup CoderStack - I pay less for better converting traffic. 

This wasn't always the case. When I started out running Facebook adverts I saw low click-through rates (CTRs) and expensive costs per click (CPCs). Initially I was left with the same impression as everyone else: this doesn't work.

But part of me didn't quite believe that, so I set out to read everything I could on Facebook Ad optimizations, and when I discovered that wasn't much, I started putting time (and money) into running experiments. After about two months worth of experiments my ad performance had increased dramatically (literally a hundred-fold). I'd discovered that with a little work Facebook Ads can be hugely profitable.

I gave a talk on this topic at the London ProductCamp in February and more than a few of the audience were surprised at how much difference tweaking ad copy and targeting can make. I think what convinced people at the talk more than anything was the hard-data, when I said "I'm paying 1p/click" that's when the audience really started paying attention.

Unfortunately there's very very little hard data out there to convince people about how effective Facebook Ads can be, while I was willing to share my real-world performance data at an unconference I'm hesitant to publish it in public where my competitors could use it to compete against me.

Given the inherent commercial nature of advertising everyone else seems to have the same opinion on secrecy so very little real hard data gets published, and most of the data that gets published tends to be from ad campaigns that haven't done well (as the information doesn't give competitors any advantage).

To rectify that (and also to test my optimization skills) I decided to run an ad campaign from scratch for one of my side projects (my webcomic Theory of Geek) and publish the data.

In the interest of openness I should declare at this point that I got approval from Facebook prior to publishing this data, but that they didn't see this data beforehand, they just knew I was writing an article about Facebook Ads and wanted to publish ad campaign data.

Here's the screenshot of the Facebook Ads Campaign five days after I started it (I've blurred out some of the ad names but none of the other details have been changed):

The important column to look at is CPC as that's how much we're paying per ad click, the worst performing advert was at £0.58 and the best performing was at £0.003. That's a difference of 200x. For those of you who aren't familiar with buying ads, a CPC of below £0.03 is practically unheard of on any other ad platforms, and what we're getting on Facebook is 10 times cheaper than that.

Of course you could argue that as I'm advertising a webcomic I'm going to get a much higher CTR (and thus lower CPC) than if I was advertising something more "serious".

For my software developer job board to target software developers I am paying more than in this ad campaign, my best ad for CoderStack was 3x more expensive than my best ad for Theory of Geek. But despite that I'm still paying an order of magnitude less on Facebook than I'm paying on any other ad networks.

I'd also like to comment on how this entire ad campaign and all the optimizations were done with a budget of under £20. Even if you're running a bootstrapped startup, you'd have to be crazy not to at least experiment with buying Facebook Ads given the low cost of experimenting and the high potential upside.

I plan to write some more articles on Facebook Ads, covering the practical side of doing ad optimizations and also what I think Facebook should be doing in order to make their ad platform better for advertisers, if you'd be interested in reading them then follow me on twitter @imranghory where I'll post links to my articles as I write them.

UPDATE: Just to clarify a couple of points that people have asked about:

  1. My ad campaign targeted only the US and UK markets, CPC was slightly lower for the US than for the UK due to a higher CTR. 
  2. Overall engagment seems to be fairly high, on par with organic search traffic. Bounce rate was 35%, and non-bounce visitors viewed an average of 4.5 pages. For CoderStack the figures are in the same sort of ballpark. 
42 responses
Hey, good post. I wrote a similar post a few months back on how we at diPoll were able to get FB ads consistently for $0.01-$0.02 PPC, you might find it interesting (data at bottom): http://www.dipoll.com/blog/2010/11/six-steps-to-run-cheap-and-successful-face...
Question 1: Does this approach you're using scale? It looks like you've spent about 20 bucks...

Question 2: Are these highly targeted ads? Or very broad?

Basically same question as Max Mullen. How do you optimize these ads? Just trial and error based on targeting criteria and ad-format or is there 'method to the madness'?
What Geography are you targeting?

US only? Or the Philippines? Or India? Or Brazil?

If you're talking about US traffic, then I think this would be more compelling.

>1000 clicks for £3.50? That's really impressive! I'm really amazed at that.
I'll have to give it another look.
Wow - this is impressive! I thought I was on to something with Adwords & Adcenter at $0.07 PPC - can you share some links/tutorials you used to learn about optimizing facebook ads?
With fb it all depends on what you are selling. In your case, an amusing diversion. Exactly what fb is for. You did a pro job on the ad and maximised clicks, nice one. Does not mean it will work for the majority of shit folks try to sell on there. Fb is not a market worth investing effort into for the majority of businesses. All the horror stories you hear are true. The product is the rub.
I agree that Facebook ads have and undeserved bad reputation. They can produce a huge surge of cheap targeted traffic quickly. While not a good long term solution, they're great for quick traffic boosts.
This articles gave great inside into (potential) CPC rates of Facebook ads. I was digging more into Google adsense, but this article convinced me to take a close look into Facebook ads as well.
You are targeting very uncompetitive keywords; thus, no wonder the results are yeilding very low CPC/CPM - also as others have noted, what geography are you targeting? CPC for UK/US for a highly competitive term is going to be above $2 per click, just try competing against Groupon/Living Social for "deals" keywords.
It would be great if you could share some of the things you did to achieve such a dramatic improvement in performance.
It is fair to assume you see much better results (lower eCPM) paying on a CPM basis v a CPC basis? Looks like you only tried one on a CPC basis.
Folks... this post is 100% accurate. I too am paying a few cents per click.

The key is to test and track. Then once you're averaging more than .5% CTR, switch from CPC to CPM.

I have a Facebook ads tutorial about this here:

I just can't imagine how this actually works. I've followed all the steps, and I have a website that works in multiple niches for which I've tried tons of interest-specific targeting with super broad and international demographics, and Facebook still suggest that my bids be over $1.00.
This is an interesting view:

Facebook’s Ad Ineffectiveness is a Short Term Challenge
Post by Tomas Tunguz (@ttunguz) VC at Redpoint Ventures

I would also love to learn how exactly did you achieve this.
A great article on Facebook ads, as you targeted fb, i would like to share some thing about google adwords , here it is, http://smartbananas.com/google-adwords/
Thanks for the article on Facebook ads. This is an area we want to expand to. See if we can get it cheaper then google.
Thanks for your detailed post, very interesting and easy to follow. You brought up a fantastic point of test and run it like an experiment.
Also, if you're looking for very cheap advertising, you can contact sites like this one: limerencemag.com/advertise/

Ads start at just $3.50 per placement and they even design ads for free if you don't have one.

Alse if you're looking for targeted website traffic, you can order from my site http://the-cheapest-traffic.com
You could not have said it any better.

" I pay less for better converting traffic. "

The traffic needs to convert, so its a human at the other end.
Any traffic that makes your stats look good but does not buy is expensive traffic, its not worth buying any more.

It is a real pity that more data is not available in the market to enable true comparisons between the advert networks - especially Google Ads & Facebook system..I guess over time this will change. Facebook ads are getting more expensive in 2012 - so we will have to see if it will continue to be better for us than Google Ads. Thanks for the article.
Facebook Ads sure beat the heck out of SEO, the next Google Update could see all your hard work go up in smoke.
I am doing some research on this for my own project right now, and this was the only article I have found that actually has useful numbers in it!

Really impressive results after just two month of experimenting. Will likely follow your example!

I would like to thank you for the efforts you have put in writing this site. I have been looking all over for this! It was excellent and very informative. I think this is one of the most vital info for me. And i'm glad reading your article. It's really a great and useful piece of info.
Good post about Cheap facebook traffi.

I know a website which give Cheap real Targetted visitors www.maxvisits.com
They give real 10,000 visitors just for $9.99 and will get 10,000 USA or UK visitors for just $11.99. Just try it.

tell me plz how did you achieve this i also want to create ad on facebook.
lol a $20 test yields very different numbers then a $200 test. Its rather easy to achieve those numbers with high competition sales and rebill cpa offers on a $20 test. Stop fooling all these noobs and post some good substantial data.
Insightful post. Facebook ads are definitely under utilized by internet marketers. They are are great way to test marketing strategies and even promote brand awareness. You could run a campaign there for as little as $10.
Hey, Great Post.. I am on the hunt for cheap faceboo advertising and I think I will be focusing on that traffic source to master it. Again, thanks for this great post..
i have new blog, anybody can help me some find traffic about game , game product, thanks
Sorry to see that this post didn't contain any useful information. Anyways, I can confirm the authors statements and I've been paying as low as $0.0018 CPC on some ads but it requires a lot of time practicing and tweaking but when you reach that, you are all set as it is extremely cheap and the traffic high quality.
I work for an entertainment and news media website called http://iQuestionMusic.com and I have been looking for a way to make Facebook convert to returning visitors or even better paying customers. But can you really get quality clicks from the U.S. at those prices?
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