Sofanatics quits Facebook advertising. This is why.
We have been spending a couple of thousand euros per month in advertising on Facebook advertising, but it doesn't work anymore for us.
For the time being, we have decided to quit advertising on Facebook. It has become just too expensive. We know that this decision will have a huge impact on the growth of Sofanatics, but we cannot justify the investment anymore - especially when we do not have all the revenue models in place.
There has been lots of discussion around growing Facebook ad prices. There are even some statistics about it. For us the average click price has risen about 50% in a half a year. And I have to say we have been extremely effective in optimising the ad costs by timing, targeting, and using super clever bidding strategies.
Also, the conversion rates are now lower. The worse precision is, perhaps, due to harder competition amongs the bidders. Worse conversion and higher click prices have doubled our customer acquisition cost.
Another (funny) thing is that that the converted users seem to be less active and their retention is lower than earlier. The poorer ad targeting affects not only the conversion rate but the quality of the converted users too. Again, I have to say we have been optimising the targeting a lot.
Sofanatics had the first "non-advertising day" Yesterday. We had slightly less visitors, but the average time on site doubled. In stead of 13 minutes it was almost 25 minutes. Fan spending 25 minutes on our site is far better basis for the growth than an expensive visitors lost in Sofanatics.
I know we won't be the only one doing similar decisions.
See Sami's post how this change will benefit our users
