Last night, I was watching the Angels game and it so happened to be “social media night” at the stadium and it reminded me of people asking me from time to time if we do social media marketing, since it’s pretty trendy these days. My reaction is “no, we currently don’t”. And a lot of people are surprised, asking, “Well, if people want to do it for their business, don’t you want to make money off of it?”

2 Main Reasons Customwave Doesn’t Do Social Media

1) There’s two main ways to do social media marketing. The first is by spending time having conservation with people. It’s really no different than networking face to face. Something we can’t really do for a client.

I mean, some marketing companies try and network for small business clients, but it’s a double-edged sword. Meaning that there’s a lot of times networking with a client’s customers and potential customers, that the conversation could go bad and lead people to not like the business, rather than the other way around. So we stay out of it because we don’t want to do anything that would endanger Customwave’s most important asset: our business relationships with our clients.

2) The second main way to do social media marketing is to pay for Facebook pay-per-click ads.

For big companies, the advertising on Facebook is a decent deal because they like their brand everywhere. For small businesses, Facebook advertising is a rip off.

Yes, I know. Shocking thing to say right? Well, let me explain. I have specific reasons that have led me to this opinion.

The two main ways Facebook ads try and bring value is by helping the business get more customers and building brand awareness. Facebook fails at both.

For trying to get new customers, the biggest problem is that the pay-per-click price on Facebook is almost as much as Google. My theory is that marketers think clicks on Facebook are just as valuable as clicks on Google.

But Facebook and Google are two completely different advertising platforms.

Google has branded itself as a destination for people that have a need. That have intent to pay for something. When they’re ready to do something, they go to Google.

Facebook is a place where people go to socialize, relax, see how people are doing. Oh look, there’s an ad for something you’re interested in. Out of curiosity you might click on it. But just because the ad represents something you’re interested in, doesn’t mean you’re ready to call or pay money.

That is the fundamental difference between search engine marketing and display banner advertising. Someone going to a search engine like Google is way further in the sales cycle as being close to purchase. Where someone that clicks on a banner ad could be anywhere in the sales cycle.

For all the data Facebook has and all the targeting they can do, it doesn’t change the fact that Facebook sells banner ads.

Yet, the cost per click is almost as the same as what the clicks cost on Google. This is what leads businesses like Priceline to realize that Facebook advertising is not effective at bringing in new customers because the cost of the website traffic is way more expensive than it should be.

So you could say, OK, Facebook ads aren’t effective at getting new customers, but surely they would be good at boosting brand awareness, right? Well, it depends on if you don’t mind paying a premium for the privilege of advertising on Facebook.

What do I mean?

If you compare the cost of how much Facebook banner ads costs versus the cost of banner ads inside Google’s website network, the Facebook banner ads can cost double, triple, and sometimes quadruple what they cost on other websites.

In case you didn’t know the cost of each click is most determined within an auction format. Each advertiser puts in a bid of the max price they’re willing to pay per click and that’s the biggest factor in what the actual cost per click is.

Social media marketing is most effective for big companies that have tons of customers. Facebook, Twitter, etc. can be used to provide (or try to provide) better customer service. And they don’t mind paying a little more money to advertise on Facebook because they view it as a “relevant” placement. Which would then help make their brand more “relevant”.

It’s not that Facebook advertising doesn’t work for or doesn’t build brand awareness for small businesses. It does. But it’s just not a good deal when you can get banner ads on websites like nasdaq.com, forbes.com, latimes.com, cbssports.com, cnn.com for half the price. Or in some case a fourth of the price.

Plus, if we have a client that wants to do banner ads to increase brand awareness, an argument could be made that advertising on nbcsports.com, usatoday.com, tmz.com and others is more prestigious than Facebook.

If you’re running a small business, think about it. What makes you look like a bigger deal? An ad on Facebook? Or an ad on foxsports.com? An ad on Facebook? Or an ad on the chicagotribune.com? Ad on Facebook? Or an ad on abcnews.com?

I rest my case.