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Pizza Delicious Bought An Ad On Facebook. How'd They Do?

110 points by iProject 14y ago

securingsincity 14y ago
Advertising is all about the number of touches sometimes. Just because they didn't say they were coming from facebook ads it may have been a combination of advertising that included facebook that would move a customer in your direction. We have seen a lot of success with facebook and linkedin advertising when trying to get a small group of doctors to attend live events. It may not make up the bulk of our registrations but when trying to reach a small niche audience we've found every registration counts and facebook lets us do that in a cost effective way.
patio11 14y ago
Advertising for local businesses is huge business (the yellow pages -- a list of phone numbers on dead tree passed out for free -- are worth billions of dollars a year, to say nothing of newspapers, radio, and their online would-be replacements like Groupon). The vast majority of it is unmetered and ineffectual. Anyone who successfully solves this problem will end up with a business which is, roughly, Google-scale. (As they always say about contents: many will enter, few will win. Many have entered, like every broken husk of a group-buying company before Groupon.)
- nikcub 14y ago
  > Advertising for local businesses is huge business $90B p.a in the USA and growing.
- rmATinnovafy 14y ago
  This is indeed my target market. Edit: added next comment afyer being downvoted for now obvious reasons. Could not copy and paste due to phone not having such feature.
  - rmATinnovafy 14y ago
    I apologize for not expanding a bit. I meant to say that this is my target market even though it is one of the oldest problems in business. It is not fancy or the latest fad. But it impacts everything directly. Marketing powers the economy. Jobs. Startups. Software. My choice was to design a solution with software that would allow businesses to attack this problem effectively and efficiently. The size of the pie available allows for others to join in. Innovation is greatly needed in this area. I encourage fellow engineers to take a deep look at the problem.
lwhi 14y ago
People need information about a pizza shop at the time they want to order a pizza. If you're advertising prior to the event, your customer will need an incentive to remember to order from your shop. Advertising only works as part of a larger joined up campaign or strategy.
- tocomment 14y ago
  Would offerrign some sort of coupon have helped give them an incentive to rememeber? Can you do coupons on Facebook? Maybe Facebook should move into doing some kind of deals thing like Groupon?
  - AznHisoka 14y ago
    Groupon already advertises in Facebook.
rickdangerous1 14y ago
What kind of pizza place is only open two nights a week? I know a way they could more than triple revenues in a flash....open 7 nights!
- 1123581321 14y ago
  My friends in the pizza shop business tell me those two nights would be about half the week's revenue and the majority of profit if the other five days are used for intensive prep work and administration.
  - mistercow 14y ago
    That's probably true; opening 6 or 7 nights a week would certainly not triple their business. It would, however, give them a lot more open-time to accumulate repeat customers. Whether or not that works out in their favor in the end depends on how leanly they can run on those slow nights.
    - Gormo 14y ago
      Assuming that the two nights they currently open are on the weekend, perhaps opening for the remainder of the week wouldn't triple their business, but there's probably relatively predictable demand for pizza on weeknights, and I'd assume they could do/have done the research to determine whether, given that demand, they'd make a positive ROI by opening seven days a week.
andreyf 14y ago
Had they randomly spent $240 on media elsewhere, would they have gotten a better return? For a pizza shop that's open two nights a week, I wouldn't expect so. Based on this data alone, the authors' conclusion is a bit grandiose and FUD inducing: ...social advertising is so new that nobody knows for sure [if it improves sales]. It's still unproven, untested and largely unstudied. This simply does not follow from the anecdote of one tiny campaign, so it's coming from somewhere else. I don't want to ascribe malicious intent to the authors, so let's rebute their conclusion directly: "social advertising" isn't wholly unlike other forms of advertising, with the principal difference being that you now have access to a lot more data when deciding who sees your ads, such as people's declared preferences and their social network. It's up to businesses to figure out a media strategy making use of those data. Sure, this might take time/experimentation, but also seems quite obviously a better deal than placing ads in the Yellow Pages or broadcasting them (nearly) indiscriminately on TV or radio.
- antr 14y ago
  flyers distributed in the zip code where the Pizza Shop is located is a fraction of the price, and targets the residents. For some niche, local businesses, flyers still work
  - achompas 14y ago
    Really? They only spent $240. Would flyers for the neighborhood cost less than that?
    - droithomme 14y ago
      They spent $240 and got no new customers. The $240 itself is irrelevant, the return on investment is what matters. Perhaps they will next spend $250 on photocopied flyers and get 500 new customers. Perhaps they will then spend $1000 on a quarter page color ad in a local paper and get 10 new customers. None of these raw amounts have any bearing on whether Facebook costs $240 for getting no customers. What matters is whether there is a return in the investment for the ad campaign. The implication that it is better to spend $240 on an ineffective campaign than spending more than $240 on a better campaign is not a reasonable comparison. Of course the campaign was not completely ineffective. It cost them $240 to find out that Facebook campaigns did not provide a good return in their specific case. This may or may not be applicable to other businesses. Apparently GM has reached the same conclusion with $10 million in ad money. The Pizza place is smart, they were able to come to GM's conclusions for their own case, but it cost them a lot less to learn this information than it costed GM.
look_lookatme 14y ago
There's not really much difference in evaluating the measure of success of online advertising and other mediums (minus coupons), but that hasn't stopped the buying industry/consultancies from holding on for dear life to action metrics and selling a bill of goods to people like Pizza Delicious.
nikcub 14y ago
A platform where you just run ads and then see success simply doesn't exist. It is the quality of advertisement, the targetting, follow-up marketing, landing pages, and a lot of other elements that also impact success and ROI. The equiv of this story on Google would be that they ran ads, got a few hundred click-through to their website but nobody signed up. What would you pinpoint as the problem in that situation?
- bad_user 14y ago
  On Google most hits would be from people searching for "pizza delivery" or something similar. Clicks on Google's ads are driven by intent, while clicks on Facebook's ads are driven by impulse. Facebook ads can work, but I don't think they work well for local businesses, but rather for big brands that want to build an image, more akin to TV commercials.
twodayslate 14y ago
> Those ads went viral. People use the word "viral" way to much
- TomGullen 14y ago
  Agreed! They mention 700,000 impressions, it's not really viral if you're just paying for it to get out there 700,000 times.
mistercow 14y ago
It's amazing how many businesses seem to completely not understand the concept of advertising. It doesn't matter where your clients say they heard about you. It doesn't matter how many people actually clicked on your ad. Advertising is about name recognition. And it works. It's just not very easy to directly measure its effects on a small scale. It's one thing for a couple of guys running a pizza place not to grasp this concept, but for a large corporation like GM, it's simply preposterous.
- JamisonM 14y ago
  I do not know why you would say that GM does not grasp this, can you explain? GM does lots of impression-based ads all over the Internet which is all about name recognition so they seem to understand what that is about. Do you know something more about why they are saying Facebook is ineffective that I have not read in the media? If any companies in the world should know how to evaluate advertising effectiveness I would expect it to be the auto manufacturers (and car insurance companies who also advertise their faces off).
- dodava 14y ago
  Advertising isn't about name recognition. It is about getting more people to buy more of your stuff and name recognition may or may not lead to more people buying more of your stuff. If you can't directly tie it to more people buying more stuff than you are selling faith in the power of name recognition. No business is likely to long base purchasing decisions upon faith.
ankeshk 14y ago
So there are quite a few things that Pizza Delicious didn't do right with their Facebook ads. 1. They target people who like Italian food. They don't target people who like Pizza. 15,440 people in New Orleans have liked Pizza on Facebook. 2. They don't target people who like other Pizza Outlets. Or other local restaurants. If a resident likes one local outlet, he is more prone to like other local establishments too. 3. They disregard targeting friends of people who already like Pizza Delicious. And by doing so - they don't use the most powerful feature Facebook has to offer: social proof. 4. That they do any kind of targeting beyond geographic targeting at all is probably erroneous for their type of business. Seriously - if they were running ads offline, would they run an ad in a magazine about Italy? Or would they run it in their daily local newspaper? Pizza is something that has a wide interest. There is no need to restrict based on any kinds of interest. 5. There is no benefit in Liking Pizza Delicious on Facebook. No special Facebook offers. Or discount coupons. And yet they were expecting people to like their page and come visit their place right away. Their call to action is weak. You can't expect facebook likes to convert into orders straight away - when you don't even ask for an order. 6. Their measurement method is very inaccurate. Asking people where they found out about you has been proven to be very very inaccurate. Instead, give them a coupon and track based on that. 7. There was a total mismatch with their online and offline metrics. Do you ever like a page on facebook without knowing about that brand from before? Yet, they are tracking the number of Likes online. But asking people how they found out about them offline.
- verganileonardo 14y ago
  TL;DR Don't blame the ad platform if you don't know how to market your business and measure your efforts
- atacrawl 14y ago
  I work at a marketing agency and I wholeheartedly agree with everything on this list. While some people will read the article and think "advertising on Facebook is a bad investment," the real takeaway should be "advertising anywhere will be a bad investment if you have no clue about marketing." And as a side note -- thank you for mentioning social proof. I'm constantly stunned at just how often this powerful concept is ignored or disregarded in marketing!
tokenadult 14y ago
John Wanamaker (1838 to 1922), an early operator of department stores and a pioneer of some of today's principles of advertising, is credited with the saying, "Half the money I spend on advertising is wasted. The trouble is, I don't know which half." There is a huge business opportunity in further refinements in measuring the success or failure of advertising efforts. http://www.economist.com/node/7138905 http://www.economist.com/node/7138905 Part of the difficulty in measuring success or failure of advertising efforts, of course, is that different businesses gain different forms of utility from successful advertising, with some businesses structured to gain from almost any increase in reputation, and others depending on prompting direct contacts with salespersons, and others desiring to increase direct, in-store customer visits. Each business client of an advertising campaign in a free enterprise economy should be allowed to define "success" in a way that is meaningful to that business, and each thoughtfully managed business will shop around for the advertising provider that best delivers success meaningful to the client. And of course providers of advertising compete with one another by offering reasonable targeting solutions at reasonable cost. From the submitted article: "Their first idea was to target the friends of people who already liked Pizza Delicious on Facebook. But that wound up targeting 74 percent of people in New Orleans on Facebook — 224,000 people. They needed something narrower." The clear implication here is that the restaurant could have reached the same huge number of people living in New Orleans through some other channel for less money.
uptown 14y ago
Anybody else wonder whether the email from the random customer mentioning the advertising campaign platform was actually from someone working in Facebook's ad sales department?
- tocomment 14y ago
  I absolutely did. The way he phrased his comment and the timing seemed very suspicious.
- liamondrop 14y ago
  If you had ever banged your head against FB's ad approval process, you would have a better sense of how little they give a shit about what their advertisers think. They most certainly don't have people posing as customers and sending warm fuzzy emails.
  - tocomment 14y ago
    But maybe things are a bit different if the advertiser is part of an NPR story ...
tocomment 14y ago
This thread has piqued my interest, does anyone know of further reading I could to learn more about advertising strategies for local, small businesses?
localhost3000 14y ago
they should advertise on yelp where people are, you know, looking to buy pizza.
- chrisrogers 14y ago
  Appears they are doing quite well on yelp: http://www.yelp.com/biz/pizza-delicious-new-orleans http://www.yelp.com/biz/pizza-delicious-new-orleans
quinndupont 14y ago
There's about a million things wrong with this story. First, advertising rarely works that quick, so making those kinds of leaps of logic need to wait weeks or months, when hard data has been crunched. Second, most advertising (basically, the effective kind) attempts to work on your subconscious, so you end up buying Pizza Delicious, but may not ever report remembering why. This is just basic Marketing 101, but this article got it all wrong.
cmillllllls 14y ago
I think the key takeaway here is that people put up ads and just hope to turn clicks into money. As Gary Vee says "don't try to close on the first date" Its just basic human nature that once I like a page, I'm not going to immediately go into the place and hand them money. You have to keep telling a story to build lifetime value. Internet marketing is not a sprint, its a marathon. Only exception is most types of affiliate marketing.
liamondrop 14y ago
>> But social advertising is so new that nobody knows for sure. It's still unproven, untested and largely unstudied. FB ads have been around for several years and there are plenty of businesses dropping $10Ks a day and making a very healthy return. It's been proven, tested, and studied ad nauseum. What is the agenda of these articles, exactly?
jsavimbi 14y ago
> Rob Leathern, a social media ad guru. There's your problem right there.
- deleted 14y ago
  [deleted]
chadyj 14y ago
This is a myopic article. I challenge any marketing channel to drive instant real world sales for a brick and mortar retail store. It just doesn't happen like the article expects with its naive assumptions. It is too early to measure the success of the ads in a real world scenario. These pizza ads are very much about exposure (and not BUY NOW) but the article presumes that the only metric of success is people running out the door, getting in their car and buying pizza immediately after seeing the ad. This behavior isn't reflected in other media, such as TV, magazine ads, billboards, PR, etc, so why hold Facebook to a higher mystical immediate marketing standard? Online ads can indeed drive immediate sales but that is for online businesses where there is buying intent, and this pizza store clearly isn't in that category. Another aspect overlooked is that unlike a google ad or magazine ad where you pay per exposure/view/instance, these Facebook ads serve a lead acquisition strategy that can be used multiple times. Pay once to acquire the customer, then market as much as you like for free. Once you have the customer as a "fan" you can market to them every week or even every day making the original investment much more valuable. Marketing is about repetition and exposure so it may take X Facebook posts before the consumer receives sufficient exposure.
rmATinnovafy 14y ago
Pizza Delicious made the same basic mistake we all do. They chose to advertise to people who don't know them, instead of marketing to people that do. This is so simple, yet 99% of us don't get it. To convince someone new to buy from you takes times and money. Lots of it. But what do we do after those customers are made? We ignore them. So we spend all that money to win over new people and then ignore them. If Pizza Delicious had instead focused on getting their current customers to buy again, then their investment would have paid out. In fact, the response ratio would have been higher due to the fact that more people would have responded. But sadly, big media like facebook promotes their advertising like some sort of fix all. When in fact, it works like advetising on the newspaper. As expensive. As innefective. For most businesses, that is just a waste of resources. If Pizza Delicious is reading, send me an email. I will build you a marketing system that will not only be cost effective, but will work. PS. Before using facebook, or adwords ads consider direct marketing. If you don't have an idea, then drop me a line. I'll help you get your business off the ground.
- mikeryan 14y ago
  I disagree with your premise that marketing for new customers is a mistake. Its entirely dependent on your strategy. But also its much harder to increase margins on existing customers then it is to gain margin by getting new customers. Take a Pizza place - say an average customer gets 12 pizza's a year. Pizza D can focus on trying to get more business out of them but how many more pizza's do they sell? Can they maybe sell 3-4 more pizzas per customer per year? Compare that to an entirely new customer each which brings an average load of 12 more pizzas a year. Even if it costs twice as much marketing to convert new customer its still worth it. Ultimately it comes down to your business and your campaign and which type is more valuable.
  - rmATinnovafy 14y ago
    Sorry, double post.
  - rmATinnovafy 14y ago
    My point is that focusing the majority of resources on getting new customers from big media is a mistake. The focus should be to sell more to current customers ( for the pizza business), and to make those repeating customers bring in new people. This is from experience, and from wasting my own money. Just like Pizza Delicious did.
RBerenguel 14y ago
1$ per fan. Seriously? I usually get around 5 fans/$, the worst I've got is 3 fans/$. And I've done more than 1 or 2 campaigns
Androsynth 14y ago
The best advertising I have seen yet on FB was from a burger company in West Covina, SoCal called Islands. They made really good burgers but they didnt have many customers, so they gave out free hamburgers on some random Saturday. You just had to print out a picture from their fb page (or just show it on your smart phone). I went with my gf and the burgers were great. We went back the next week and paid full price. I'm sure we will go back again.
- carguy1983 14y ago
  Islands is actually a fairly large chain in southern california (where all that is good and bad in hamburgers come from) and they make pretty damn delicious burgers and Mexican-American food, especially for a "theme" chain restaurant. For some reason it's not as popular as it used to be, which is a shame :( I think it's tough for them to compete against the heavily saturated advertising of Chili's, TGIF, Outback that sort of thing. They're kind of in a weird spot with tough competitors, even though they're way better in terms of the actual food they make. They're probably resisting the pressure to serve food out of microwaves and bags, and paying the price :(
ianferrel 14y ago
The thing that surprised me so much about this story is how many people "liked" them in response to the ad. I'm left wondering how many of those likes were from: 1. People who were already customers of PD and became more aware of their Facebook presence due to the ad. 2. People who were unaware of PD, but liked them in response to the ad. If most of their likes are people in category 1, that would explain why the increase in likes does not at all translate to an increase in sales. I'm curious how many people there are in category 2, who will just like random things advertised to them.
- KaoruAoiShiho 14y ago
  Right on, and #1 is actually an excellent result had the advertisers parleyed that into social proof for newcomers.
guelo 14y ago
Yelp is probably a much better ad platform for local businesses. Even though Facebook's overall revenue is 30 times bigger than Yelp's I wouldn't be surprised if local business revenue is in the same ballpark.
shuzchen 14y ago
Am I the only one that feels buying ads on facebook isn't meant to bring in direct dollars, but rather to get people to like your brand. The benefit comes later, because you now have a group of people that liked you, and you can run countless campaigns targeting them (without having to pay facebook a penny) for the rest of eternity (or until they remove your updates from their feed). In this sense facebook is the new newsletter, and this company just got 240 new subscribers that are local and perhaps interested in their food. If they just stopped at the targeted ads, they just gave up on a wealth of potential sales.
waterlesscloud 14y ago
My brother owns a restaurant in Flagstaff, which is the base town for the Grand Canyon. So massive numbers of tourists pass through the town every month. He's listed in all the guidebooks and so on, etc etc. What would be great would be if he had a way to target people who were on their way to the Grand Canyon or who had just visited that day. Obviously this is something Facebook could easily provide great insight into. But as far as I know, they don't. He's got a facebook page for his place, and it does well with the locals. And he gets his share of tourists via the traditional routes, but it seems like there's a wasted opportunity here with Facebook...

110 points by iProject 14y ago

Advertising is all about the number of touches sometimes. Just because they didn't say they were coming from facebook ads it may have been a combination of advertising that included facebook that would move a customer in your direction. We have seen a lot of success with facebook and linkedin advertising when trying to get a small group of doctors to attend live events. It may not make up the bulk of our registrations but when trying to reach a small niche audience we've found every registration counts and facebook lets us do that in a cost effective way.

patio11 14y ago

Advertising for local businesses is huge business (the yellow pages -- a list of phone numbers on dead tree passed out for free -- are worth billions of dollars a year, to say nothing of newspapers, radio, and their online would-be replacements like Groupon). The vast majority of it is unmetered and ineffectual. Anyone who successfully solves this problem will end up with a business which is, roughly, Google-scale. (As they always say about contents: many will enter, few will win. Many have entered, like every broken husk of a group-buying company before Groupon.)

nikcub 14y ago
> Advertising for local businesses is huge business $90B p.a in the USA and growing.
rmATinnovafy 14y ago
This is indeed my target market. Edit: added next comment afyer being downvoted for now obvious reasons. Could not copy and paste due to phone not having such feature.
- rmATinnovafy 14y ago
  I apologize for not expanding a bit. I meant to say that this is my target market even though it is one of the oldest problems in business. It is not fancy or the latest fad. But it impacts everything directly. Marketing powers the economy. Jobs. Startups. Software. My choice was to design a solution with software that would allow businesses to attack this problem effectively and efficiently. The size of the pie available allows for others to join in. Innovation is greatly needed in this area. I encourage fellow engineers to take a deep look at the problem.

lwhi 14y ago

People need information about a pizza shop at the time they want to order a pizza. If you're advertising prior to the event, your customer will need an incentive to remember to order from your shop. Advertising only works as part of a larger joined up campaign or strategy.

tocomment 14y ago
Would offerrign some sort of coupon have helped give them an incentive to rememeber? Can you do coupons on Facebook? Maybe Facebook should move into doing some kind of deals thing like Groupon?
- AznHisoka 14y ago
  Groupon already advertises in Facebook.

rickdangerous1 14y ago

What kind of pizza place is only open two nights a week? I know a way they could more than triple revenues in a flash....open 7 nights!

1123581321 14y ago
My friends in the pizza shop business tell me those two nights would be about half the week's revenue and the majority of profit if the other five days are used for intensive prep work and administration.
- mistercow 14y ago
  That's probably true; opening 6 or 7 nights a week would certainly not triple their business. It would, however, give them a lot more open-time to accumulate repeat customers. Whether or not that works out in their favor in the end depends on how leanly they can run on those slow nights.
  - Gormo 14y ago
    Assuming that the two nights they currently open are on the weekend, perhaps opening for the remainder of the week wouldn't triple their business, but there's probably relatively predictable demand for pizza on weeknights, and I'd assume they could do/have done the research to determine whether, given that demand, they'd make a positive ROI by opening seven days a week.

andreyf 14y ago

Had they randomly spent $240 on media elsewhere, would they have gotten a better return? For a pizza shop that's open two nights a week, I wouldn't expect so. Based on this data alone, the authors' conclusion is a bit grandiose and FUD inducing: ...social advertising is so new that nobody knows for sure [if it improves sales]. It's still unproven, untested and largely unstudied. This simply does not follow from the anecdote of one tiny campaign, so it's coming from somewhere else. I don't want to ascribe malicious intent to the authors, so let's rebute their conclusion directly: "social advertising" isn't wholly unlike other forms of advertising, with the principal difference being that you now have access to a lot more data when deciding who sees your ads, such as people's declared preferences and their social network. It's up to businesses to figure out a media strategy making use of those data. Sure, this might take time/experimentation, but also seems quite obviously a better deal than placing ads in the Yellow Pages or broadcasting them (nearly) indiscriminately on TV or radio.

antr 14y ago
flyers distributed in the zip code where the Pizza Shop is located is a fraction of the price, and targets the residents. For some niche, local businesses, flyers still work
- achompas 14y ago
  Really? They only spent $240. Would flyers for the neighborhood cost less than that?
  - droithomme 14y ago
    They spent $240 and got no new customers. The $240 itself is irrelevant, the return on investment is what matters. Perhaps they will next spend $250 on photocopied flyers and get 500 new customers. Perhaps they will then spend $1000 on a quarter page color ad in a local paper and get 10 new customers. None of these raw amounts have any bearing on whether Facebook costs $240 for getting no customers. What matters is whether there is a return in the investment for the ad campaign. The implication that it is better to spend $240 on an ineffective campaign than spending more than $240 on a better campaign is not a reasonable comparison. Of course the campaign was not completely ineffective. It cost them $240 to find out that Facebook campaigns did not provide a good return in their specific case. This may or may not be applicable to other businesses. Apparently GM has reached the same conclusion with $10 million in ad money. The Pizza place is smart, they were able to come to GM's conclusions for their own case, but it cost them a lot less to learn this information than it costed GM.

look_lookatme 14y ago

There's not really much difference in evaluating the measure of success of online advertising and other mediums (minus coupons), but that hasn't stopped the buying industry/consultancies from holding on for dear life to action metrics and selling a bill of goods to people like Pizza Delicious.

nikcub 14y ago

A platform where you just run ads and then see success simply doesn't exist. It is the quality of advertisement, the targetting, follow-up marketing, landing pages, and a lot of other elements that also impact success and ROI. The equiv of this story on Google would be that they ran ads, got a few hundred click-through to their website but nobody signed up. What would you pinpoint as the problem in that situation?

bad_user 14y ago
On Google most hits would be from people searching for "pizza delivery" or something similar. Clicks on Google's ads are driven by intent, while clicks on Facebook's ads are driven by impulse. Facebook ads can work, but I don't think they work well for local businesses, but rather for big brands that want to build an image, more akin to TV commercials.

twodayslate 14y ago

> Those ads went viral. People use the word "viral" way to much

TomGullen 14y ago
Agreed! They mention 700,000 impressions, it's not really viral if you're just paying for it to get out there 700,000 times.

mistercow 14y ago

It's amazing how many businesses seem to completely not understand the concept of advertising. It doesn't matter where your clients say they heard about you. It doesn't matter how many people actually clicked on your ad. Advertising is about name recognition. And it works. It's just not very easy to directly measure its effects on a small scale. It's one thing for a couple of guys running a pizza place not to grasp this concept, but for a large corporation like GM, it's simply preposterous.

JamisonM 14y ago
I do not know why you would say that GM does not grasp this, can you explain? GM does lots of impression-based ads all over the Internet which is all about name recognition so they seem to understand what that is about. Do you know something more about why they are saying Facebook is ineffective that I have not read in the media? If any companies in the world should know how to evaluate advertising effectiveness I would expect it to be the auto manufacturers (and car insurance companies who also advertise their faces off).
dodava 14y ago
Advertising isn't about name recognition. It is about getting more people to buy more of your stuff and name recognition may or may not lead to more people buying more of your stuff. If you can't directly tie it to more people buying more stuff than you are selling faith in the power of name recognition. No business is likely to long base purchasing decisions upon faith.

ankeshk 14y ago

So there are quite a few things that Pizza Delicious didn't do right with their Facebook ads. 1. They target people who like Italian food. They don't target people who like Pizza. 15,440 people in New Orleans have liked Pizza on Facebook. 2. They don't target people who like other Pizza Outlets. Or other local restaurants. If a resident likes one local outlet, he is more prone to like other local establishments too. 3. They disregard targeting friends of people who already like Pizza Delicious. And by doing so - they don't use the most powerful feature Facebook has to offer: social proof. 4. That they do any kind of targeting beyond geographic targeting at all is probably erroneous for their type of business. Seriously - if they were running ads offline, would they run an ad in a magazine about Italy? Or would they run it in their daily local newspaper? Pizza is something that has a wide interest. There is no need to restrict based on any kinds of interest. 5. There is no benefit in Liking Pizza Delicious on Facebook. No special Facebook offers. Or discount coupons. And yet they were expecting people to like their page and come visit their place right away. Their call to action is weak. You can't expect facebook likes to convert into orders straight away - when you don't even ask for an order. 6. Their measurement method is very inaccurate. Asking people where they found out about you has been proven to be very very inaccurate. Instead, give them a coupon and track based on that. 7. There was a total mismatch with their online and offline metrics. Do you ever like a page on facebook without knowing about that brand from before? Yet, they are tracking the number of Likes online. But asking people how they found out about them offline.

verganileonardo 14y ago
TL;DR Don't blame the ad platform if you don't know how to market your business and measure your efforts
atacrawl 14y ago
I work at a marketing agency and I wholeheartedly agree with everything on this list. While some people will read the article and think "advertising on Facebook is a bad investment," the real takeaway should be "advertising anywhere will be a bad investment if you have no clue about marketing." And as a side note -- thank you for mentioning social proof. I'm constantly stunned at just how often this powerful concept is ignored or disregarded in marketing!

tokenadult 14y ago

John Wanamaker (1838 to 1922), an early operator of department stores and a pioneer of some of today's principles of advertising, is credited with the saying, "Half the money I spend on advertising is wasted. The trouble is, I don't know which half." There is a huge business opportunity in further refinements in measuring the success or failure of advertising efforts. http://www.economist.com/node/7138905 http://www.economist.com/node/7138905 Part of the difficulty in measuring success or failure of advertising efforts, of course, is that different businesses gain different forms of utility from successful advertising, with some businesses structured to gain from almost any increase in reputation, and others depending on prompting direct contacts with salespersons, and others desiring to increase direct, in-store customer visits. Each business client of an advertising campaign in a free enterprise economy should be allowed to define "success" in a way that is meaningful to that business, and each thoughtfully managed business will shop around for the advertising provider that best delivers success meaningful to the client. And of course providers of advertising compete with one another by offering reasonable targeting solutions at reasonable cost. From the submitted article: "Their first idea was to target the friends of people who already liked Pizza Delicious on Facebook. But that wound up targeting 74 percent of people in New Orleans on Facebook — 224,000 people. They needed something narrower." The clear implication here is that the restaurant could have reached the same huge number of people living in New Orleans through some other channel for less money.

uptown 14y ago

Anybody else wonder whether the email from the random customer mentioning the advertising campaign platform was actually from someone working in Facebook's ad sales department?

tocomment 14y ago
I absolutely did. The way he phrased his comment and the timing seemed very suspicious.
liamondrop 14y ago
If you had ever banged your head against FB's ad approval process, you would have a better sense of how little they give a shit about what their advertisers think. They most certainly don't have people posing as customers and sending warm fuzzy emails.
- tocomment 14y ago
  But maybe things are a bit different if the advertiser is part of an NPR story ...

tocomment 14y ago

This thread has piqued my interest, does anyone know of further reading I could to learn more about advertising strategies for local, small businesses?

localhost3000 14y ago

they should advertise on yelp where people are, you know, looking to buy pizza.

chrisrogers 14y ago
Appears they are doing quite well on yelp: http://www.yelp.com/biz/pizza-delicious-new-orleans http://www.yelp.com/biz/pizza-delicious-new-orleans

quinndupont 14y ago

There's about a million things wrong with this story. First, advertising rarely works that quick, so making those kinds of leaps of logic need to wait weeks or months, when hard data has been crunched. Second, most advertising (basically, the effective kind) attempts to work on your subconscious, so you end up buying Pizza Delicious, but may not ever report remembering why. This is just basic Marketing 101, but this article got it all wrong.

cmillllllls 14y ago

I think the key takeaway here is that people put up ads and just hope to turn clicks into money. As Gary Vee says "don't try to close on the first date" Its just basic human nature that once I like a page, I'm not going to immediately go into the place and hand them money. You have to keep telling a story to build lifetime value. Internet marketing is not a sprint, its a marathon. Only exception is most types of affiliate marketing.

liamondrop 14y ago

>> But social advertising is so new that nobody knows for sure. It's still unproven, untested and largely unstudied. FB ads have been around for several years and there are plenty of businesses dropping $10Ks a day and making a very healthy return. It's been proven, tested, and studied ad nauseum. What is the agenda of these articles, exactly?

jsavimbi 14y ago

> Rob Leathern, a social media ad guru. There's your problem right there.

deleted 14y ago
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chadyj 14y ago

This is a myopic article. I challenge any marketing channel to drive instant real world sales for a brick and mortar retail store. It just doesn't happen like the article expects with its naive assumptions. It is too early to measure the success of the ads in a real world scenario. These pizza ads are very much about exposure (and not BUY NOW) but the article presumes that the only metric of success is people running out the door, getting in their car and buying pizza immediately after seeing the ad. This behavior isn't reflected in other media, such as TV, magazine ads, billboards, PR, etc, so why hold Facebook to a higher mystical immediate marketing standard? Online ads can indeed drive immediate sales but that is for online businesses where there is buying intent, and this pizza store clearly isn't in that category. Another aspect overlooked is that unlike a google ad or magazine ad where you pay per exposure/view/instance, these Facebook ads serve a lead acquisition strategy that can be used multiple times. Pay once to acquire the customer, then market as much as you like for free. Once you have the customer as a "fan" you can market to them every week or even every day making the original investment much more valuable. Marketing is about repetition and exposure so it may take X Facebook posts before the consumer receives sufficient exposure.

rmATinnovafy 14y ago

Pizza Delicious made the same basic mistake we all do. They chose to advertise to people who don't know them, instead of marketing to people that do. This is so simple, yet 99% of us don't get it. To convince someone new to buy from you takes times and money. Lots of it. But what do we do after those customers are made? We ignore them. So we spend all that money to win over new people and then ignore them. If Pizza Delicious had instead focused on getting their current customers to buy again, then their investment would have paid out. In fact, the response ratio would have been higher due to the fact that more people would have responded. But sadly, big media like facebook promotes their advertising like some sort of fix all. When in fact, it works like advetising on the newspaper. As expensive. As innefective. For most businesses, that is just a waste of resources. If Pizza Delicious is reading, send me an email. I will build you a marketing system that will not only be cost effective, but will work. PS. Before using facebook, or adwords ads consider direct marketing. If you don't have an idea, then drop me a line. I'll help you get your business off the ground.

mikeryan 14y ago
I disagree with your premise that marketing for new customers is a mistake. Its entirely dependent on your strategy. But also its much harder to increase margins on existing customers then it is to gain margin by getting new customers. Take a Pizza place - say an average customer gets 12 pizza's a year. Pizza D can focus on trying to get more business out of them but how many more pizza's do they sell? Can they maybe sell 3-4 more pizzas per customer per year? Compare that to an entirely new customer each which brings an average load of 12 more pizzas a year. Even if it costs twice as much marketing to convert new customer its still worth it. Ultimately it comes down to your business and your campaign and which type is more valuable.
- rmATinnovafy 14y ago
  Sorry, double post.
- rmATinnovafy 14y ago
  My point is that focusing the majority of resources on getting new customers from big media is a mistake. The focus should be to sell more to current customers ( for the pizza business), and to make those repeating customers bring in new people. This is from experience, and from wasting my own money. Just like Pizza Delicious did.

RBerenguel 14y ago

1$ per fan. Seriously? I usually get around 5 fans/$, the worst I've got is 3 fans/$. And I've done more than 1 or 2 campaigns

Androsynth 14y ago

The best advertising I have seen yet on FB was from a burger company in West Covina, SoCal called Islands. They made really good burgers but they didnt have many customers, so they gave out free hamburgers on some random Saturday. You just had to print out a picture from their fb page (or just show it on your smart phone). I went with my gf and the burgers were great. We went back the next week and paid full price. I'm sure we will go back again.

carguy1983 14y ago
Islands is actually a fairly large chain in southern california (where all that is good and bad in hamburgers come from) and they make pretty damn delicious burgers and Mexican-American food, especially for a "theme" chain restaurant. For some reason it's not as popular as it used to be, which is a shame :( I think it's tough for them to compete against the heavily saturated advertising of Chili's, TGIF, Outback that sort of thing. They're kind of in a weird spot with tough competitors, even though they're way better in terms of the actual food they make. They're probably resisting the pressure to serve food out of microwaves and bags, and paying the price :(

ianferrel 14y ago

The thing that surprised me so much about this story is how many people "liked" them in response to the ad. I'm left wondering how many of those likes were from: 1. People who were already customers of PD and became more aware of their Facebook presence due to the ad. 2. People who were unaware of PD, but liked them in response to the ad. If most of their likes are people in category 1, that would explain why the increase in likes does not at all translate to an increase in sales. I'm curious how many people there are in category 2, who will just like random things advertised to them.

KaoruAoiShiho 14y ago
Right on, and #1 is actually an excellent result had the advertisers parleyed that into social proof for newcomers.

guelo 14y ago

Yelp is probably a much better ad platform for local businesses. Even though Facebook's overall revenue is 30 times bigger than Yelp's I wouldn't be surprised if local business revenue is in the same ballpark.

shuzchen 14y ago

Am I the only one that feels buying ads on facebook isn't meant to bring in direct dollars, but rather to get people to like your brand. The benefit comes later, because you now have a group of people that liked you, and you can run countless campaigns targeting them (without having to pay facebook a penny) for the rest of eternity (or until they remove your updates from their feed). In this sense facebook is the new newsletter, and this company just got 240 new subscribers that are local and perhaps interested in their food. If they just stopped at the targeted ads, they just gave up on a wealth of potential sales.

waterlesscloud 14y ago

My brother owns a restaurant in Flagstaff, which is the base town for the Grand Canyon. So massive numbers of tourists pass through the town every month. He's listed in all the guidebooks and so on, etc etc. What would be great would be if he had a way to target people who were on their way to the Grand Canyon or who had just visited that day. Obviously this is something Facebook could easily provide great insight into. But as far as I know, they don't. He's got a facebook page for his place, and it does well with the locals. And he gets his share of tourists via the traditional routes, but it seems like there's a wasted opportunity here with Facebook...