Even with Twitter becoming an increasing thorn in Facebook’s side, there is still no comparison in size between the two. Facebook continues to release new products and with the continued evolution of the Facebook Pages product, Facebook is aimed at becoming the largest site on the web. Just earlier this week, Nielsen released metrics that showed Facebook had surpassed Yahoo in the total amount of time spent on the site.

With this huge milestone and 250 million users, Facebook is poised to build something even more spectacular. Two years after beginning to track the growth of the company, it’s exciting to see the trend continued.

1. Facebook Is Least Effective At Direct Sales

If you’ve come to Facebook looking for instantaneous sales than you’ve come to the wrong place. Facebook presents businesses with the opportunity to reach their target market throughout the entire marketing cycle. While a small percentage of users are ready to purchase while they’re browsing Facebook, a much larger percentage of users are going to make a purchase in the future if not now.

Fortunately you have the opportunity to build an ongoing relationship with your customer and that’s what Facebook is most useful for: building relationships. It’s a platform to build ongoing relationships and “remarket” to your customers, as Facebook says in some of their own marketing copy. Understanding that these users are not ready to purchase is key to success on Facebook.

As I outlined in the 5 phases of the Facebook sales funnel, Facebook is about relationship marketing. As Wikipedia describes, “Relationship marketing differs from other forms of marketing in that it recognizes the long term value to the firm of keeping customers, as opposed to direct or ‘Intrusion’ marketing, which focuses upon acquisition of new clients by targeting majority demographics based upon prospective client lists.”

2. Create A Greater Volume Of Ads That Target Less People

Often times on Google, advertisers will create an ad which targets every person in a single country and then split test two ad versions against each other. On Facebook this model will do nothing but cost you money. Placing a generic ad that’s targeted at an entire country, without any additional targeting, will do nothing but get you a lot of clicks and waste a lot of money for the most part.

Facebook provides 11 targeting factors for advertisers (with three new factors announced yesterday). Below is an outline of each of those factors:

1. Location - Facebook enables advertisers to target by country, state/provice, city, and metropolitan areas. All advertisements are required to have a location selected. This should be pretty straight-forward as to which location you’d like to select.
2. Age - Age is a standard demographic factor. Most marketers that have a well defined target-market will be able to select their age.
3. Birthday - This is one of Facebook’s latest advertising targeting filters. It should be pretty obvious what types of ads should be presented to people who’s birthday it is. Try wishin the user a happy birthday and offer them a gift for higher conversion rates.
4. Sex - Gender is another typical targeting filter for Facebook.
5. Keywords - Keywords will are based on a user’s profile information including Activities, Favorite Books, TV Shows, Movies, and more. I believe job titles are included in this field and I typically spend the most time trying to brainstorm effective keywords. What types of products do your customers like? What’s their job position within an organization? Spend time on this field and you’ll be rewarded.
6. Education - While you can target based on their level of education, this is most effective for targeting ads based on the schools that people went to. Want to announce a reunion for the University of Illinois class of 1996? This is a great way to promote it.
7. Workplaces - This is another great targeting filter. Often times you will know the companies that your target market works at. If you are looking to get new clients or looking to spread awareness within specific organizations, this filter can be priceless.
8. Relationship - Want to target people that are about to get married? This is a great tool for that. If you are a bar or club, you most likely want to go after those people that are single. While this filter can be useful, you also need to keep in mind that selecting any of these settings will remove all users that haven’t selected a relationship status in their profile.
9. Interested In - This factor is useful if a user’s sexual preferences are relevant to whatever you are advertising. I tend to skip this field for most of my ads.
10. Languages - If your ad is in English but the user speaks Chinese, it’s probably not a good idea to be displaying ads to them.
11. Connections - The connections fields were launched yesterday by Facebook and they enable you to include and exclude users based on pages, events, and applications that the users have joined and you happen to be the administrator of. If you’ve created a Page and don’t want the ads to display to people who have already joined, this is a great way to avoid duplicate clicks.

If you aren’t taking advantage of the numerous targeting factors then you aren’t using Facebook advertising effectively. In order to have an increased conversion rate on your advertisements, increase the targeting in order to make the advertisement more relevant for the users. Relevance will get people to respond to your ad.

3. Friend Users Before You Sell To Them

Facebook is about relationship marketing, not direct sales (as I described in the first law). That means it’s more important to build a relationship with a potential client or an existing customer rather than closing a sale right away. So how does this law show up in practice? The most obvious form is through the Facebook Ads for pages and events.

Through these advertisements, users can become a fan or RSVP to an event directly from an ad. At that point, you have the opportunity to interact directly with that individual and build a relationship. If you had directed a user to your website, you would have been forced to have them enter a form or make a purchase right away. The odds of getting a user to fill out a form or make a purchase immediately is far less than getting them to become a fan of a Page or RSVPing to an event.

In addition to having an increased conversion, you are also now able to reach out to individuals directly if you wish. For example if someone RSVPs to an event, but you don’t know who they are, you can send them a message welcoming them to the event and inquiring about more information. This form of relationship building is used to build lasting customers, not one time purchases, and it is core to Facebook marketing.

4. Understand Your Market

On Google, a shoe retailer will develop an advertisement that targets people who are “looking to purchase shoes”. These advertisers will look for people who are carelessly misspelling a word while searching for something in order to convert them into a customer. It’s a great model for generating one-time sales but unfortunately these advertisers don’t always understand their market.

In order to become an effective Facebook advertiser, you need to have effectively defined your market. This will help you to take advantage of the 11 targeting factors that Facebook currently provides. To help define your market, you can go through the market segmentation process. This involves defining the need your company satisfies and then more thoroughly defining who your customer is.

After exhaustively defining who your customer is, you’ll be more effective at defining the targeting factors to be used in Facebook advertisements.

5. Set Advertising Budgets With A Goal In Mind

It’s extremely easy to spend a lot of money on Facebook advertisements by “experimenting”. I can’t tell you how many people I know that have aimlessly spent thousands of dollars on Facebook advertisements but couldn’t point to tangible goals that they had accomplished. If you set a budget on a campaign for $20 a day you should know what you would like to receive for that money.

Yes, we all want customers, but as I’ve continuously emphasized: Facebook marketing is not about instant sales. With that in mind, below are two practices that are good to keep in mind when setting your goals.

Think Long-Term

In terms of sales, the payoff will be further down the line so be prepared to spend over weeks and months, don’t blow your budget in a day. Unless you are an affiliate marketer (who has distinctly different goals), you should be invested in the advertising for the long haul. A one-week campaign is not going to bring you riches, but a long-term investment in advertising can produce measurable results.

This means don’t spend beyond your means for one week and have no money left at the end. Instead, set reasonable budgets that you’ll be able to handle for longer periods of time.

Measure Initial Conversions As Fans, Comments, and Likes

Since most users will not make a purchase right away, you need to make sure that you are at least engaging them. Would you go out on a first date with someone and then wait two weeks to call them back? If you want to see them again I hope you don’t wait two weeks to follow-up. The same goes for your fans. Follow-up with your fans often and consistently.

6. Monitor Your Ad Performance And Adjust Accordingly

Now that you’ve defined your goals, it’s time to track whether or not you’ve achieved them. Throughout each Facebook advertising campaign, you should be tracking how well the advertisements perform. Are you on track to reach the goals that you’ve set? Are your advertisements achieving a reasonable click-through level?

Facebook provides advertisers with a number of monitoring tools including their basic ad manager area as well as downloadable data about each campaign you are running. If you visit the ad reports area you can download three types of reports to determine how your campaigns and ads are performing: advertising performance, responder demographics, responder profiles.

The primary things to monitor are clicks, click through rates (CTR), actions, action rates, and CPC. Each of these variables will differ depending on what type of campaign that you’re running but in theory, the more targeted your ad, the higher click through rate you should have. Additionally, your click through rate will tend to go down over time as your entire target population views your ad and decides whether or not they want to respond.

7. Test Landing Pages Versus Facebook Pages

In traditional online advertising, users are directed to a landing page from which they are prompted to fill in information in a form. This information is then typically used to send marketing literature. On Facebook, you want to build relationships but if the relationships you are building aren’t generating any revenue, you may want to diversify your advertising strategy by including some landing pages.

Yes, building relationships are extremely valuable and despite those users never making a purchase, they can become effective brand advocates that ultimately drive new customers to your business. For smaller businesses, investing in brand advocates is often considered to be a costly proposition which is why investing in some direct sales is always useful.

The point of this law is that Facebook advertising cannot combined with relationship marketing cannot be your only strategy. You need to generate sales and sometimes that means being direct and converting a customer. If you want another phrase to summarize this law: “diversify, diversify, diversify”.

8. Split Test Ads By Demographic

An advertiser once told me that women tend to react more often to advertisements that have the color pink in them. While I doubt this is consistent across all women, this could be true for a large portion of them. The only way to find out if it is true is to split test different ads within that specific demographic. I’ll use an example to illustrate this rule.

Let’s say that you’ve created an advertisement that’s targeted at CEOs of companies in the Northeast region of the United States. You can create two advertisements and compare which version of the ad results in a larger response. An example lesson learned would be that “CEOs in the Northeast region tend to respond better to ads with the word ‘influence’ over the word ‘power’”.

As you narrow your targeting, you can begin to adjust your advertisements even further. For example, as a second step you can now create separate ads for CEOs in the Boston area and CEOs in the New York metropolitan area. Each step along the way you should be refining your advertising copy while incorporating some of the lessons learned from the previous steps.

As you increase your targeting, you can incorporate some of the lessons learned from previous steps.

9. Develop Creative Ad Copy

This honestly has to be one of the most important laws. Conversion is primarily about two things: your ad copy and the landing page. If your advertisement doesn’t provide a call to action, there is a good chance that the user won’t respond. Facebook ads for pages and events already provide a call to action but generic advertisements don’t. If you offer the user something for clicking, there’s an increased chance they will click.

The best way to determine effective ad copy is to take a look at the existing sites around the web. Which are the ones that you see most often? Even if the ads appear to be annoying, if you continuously see them, there’s a good chance that they are doing something right. Click on ads and see what types of products are being offered and what the pitch is.

The best way to improve your advertising is through research and other advertisers provide you with plenty of free information. While copywriting books can assist with writing effective headlines as well as how to structure landing pages, your best information will come from other ads. Also check out magazine racks at book stores and see what headlines are being used. Often times you will find great headline ideas there.

10. Don’t Over Target

In the eighth law I outlined how the more that you target, the more you can begin to hone your ad copy. While increased targeting can increase click through rates, determining how to most effectively target sub-segments of your customer population can be costly both in time and in money. While you should most definitely take advantage of Facebook’s targeting features, it’s more important that you get your company’s name out there and then build the relationships.

Everything in marketing is a balance and the last thing you want to do is spending all of your time increasing ad relevance while not interacting with the users who are clicking through on the ads. Spend time tracking your ads’ performance but also make sure that you spend time connecting with all the people that respond to your ad.

If you aren’t following through with the marketing process then you aren’t going to generate new customers.

Conclusion

Improving your advertising is something that takes time and patience. On Facebook, marketing is about relationships, not immediate sales, so set your budgets and advertising plans with that in mind. Facebook advertising is still a relatively new offering and marketers are just beginning to understand how to use these advertisements most effectively. With these 10 initial laws, all marketers should have a great starting point.

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Currently there are no advertising platforms (that I’m aware of) that provide this level of targeting capabilities. With these new features, Facebook will be able to increase revenue while increasing the effectiveness of ads. One thing that has been challenging for Facebook is to receive high conversion levels but with these new targeting features, creative advertisers will be able to increase their conversion levels.

One group that can also benefit from this new ad platform is application developers. Want to get new users that aren’t yet using your application? Now you can exclude all users of your existing application and only target those that haven’t installed it. This is something that as far as I know, no cost-per-install networks are able to provide yet. Facebook has been heavily focused on improving their advertising offerings over the past few weeks and with this latest announcement, it’s clear that Facebook is looking to provide powerful tools for all advertisers.

If French happens to be your native language than you can read most of the articles that we have on this site via the French All Facebook. Let us know if there’s anything else you’d like to see on this site as we’re constantly trying to improve what we provide readers with.

Update
As Dan Lester points out in the comments: today is Bastille day. I hadn’t thought about that but it is most definitely great timing, so celebrate the day by reading All Facebook France.

Before explaining, make sure you understand Facebook’s terms about modifying the box using CSS. They state that you cannot obscure or remove:

• Your Page title and icon
• The Become a Fan button
• The order of the elements (button, stream, fans)

Had I read that before, I probably would have known that the post from this morning was against the terms. Anyways, you can change two primary things about the box: the stream and the list of fans. There are two parameters that are passed via the <fb:fan> tag: stream and connections. You can then modify the styles using a basic stylesheet and I’d assume you could use a wrapper div to target styles specifically at the box.

I’ll post an updated articles with some examples but for now I’ve gone ahead and taken down the post from this morning about how to isolate the “Become a Fan” button.

Digital Sky Technologies, the Russian investment firm that in May invested $200 million in Facebook, has begun a tender offer to purchase up to $100 million of Facebook common stock from existing stock and option holders, according to a person briefed on the deal. The firm is offering a price of $14.77 a share, which would value the company at $6.5 billion -– less than the $10 billion valuation of its previous investment, which was for preferred shares.

One caveat of this buyback program is that executives cannot participate in the program. Facebook had previously attempted to provide an employee stock buyback program but the program fell through. This investment successfully resolves any previous issues surrounding the program. Since Facebook is not going public in the near future, this program provides liquidity to some of the shareholders.

There are many other improvements but it’s clear Facebook wants to improve the ad system to help the overall advertiser experience. If advertising is also not going to grow as quickly as hoped as last week’s eMarketer report suggested, subtle improvements could help give Facebook an additional boost. For now these are much welcomed improvements and I hope to see more in the near future.

Are there any improvements that you would like to see for Facebook’s advertising platform?

With all the traction that Twitter has been receiving, the team decided to go ahead and test out a Twitter version of their application. A number of Facebook application developers have been taking a shot at building successful Twitter applications and while there are few highly successful Twitter apps, it’s hard to ignore the buzz. Applications built on Twitter continue to receive small rounds of funding and with the site continuing to grow, it’s impossible to ignore.

Currently TwitDraw is still in its infancy and just being tested out. If all goes well the Graffiti team could soon have another successful application to add to their portfolio. Check out TwitDraw and let us know what your thoughts are!

Twitter Has More Volume, More Noise

While Twitter appears to be leading the real-time search engine, real-time search is far from mature. We’ve only begun to define what real-time search means but the assumption is that real-time information can add relevance. Since you can tweet information quickly, we can get more relevant information quicker. For example I first learned about Michael Jackson’s death a couple weeks ago via Twitter and then read about the confirmations and also received confirmation from a close source to the pop mogul.

Twitter ended up being extremely relevant in that instance and there are many other instances in which this information can be relevant. Twitter isn’t the end all be all of real-time search though. While there are currently a number of filters via Twitter’s advanced search tool, there is still a large amount of excess noise. I don’t know most people on Twitter and reading through every tweet in a search query, sorted by date/time doesn’t make a lot of sense.

This unfiltered access to all tweets can be seen as an advantage or disadvantage of Twitter search depending on how you look at it.

Facebook Uses Structured Data To Improve Relevance

If you asked me how to improve relevance in the world of real-time search, I would argue that by using data about the person searching, you can dramatically improve relevance. Luckily for Facebook, they already have a number of variables, many of which I outlined in January, that can be used to increase relevance. Here are the ones I mentioned at the time:

• Comments on shared stories
• “Friend Rank” - A way of valuing the relevance of a link based on a user’s authority via the number of friends they have and the influence of each of those friends
• Number of times a story is shared
• Networks users are members of (good for targeted search)

There are a number of other variables that could be used but the point is that each variable can be used to increase “relevance” and ultimate that’s what the real-time search war is about. So far all that Facebook has provided for searched items is feed postings by your friends as well as all users that have selected the “everyone” privacy setting for posted items. Currently the volume of public items is well below Twitter but honestly, volume does not equal value.

Phase Two of “Real-Time” Search

We now have a the “real-time firehose” of data from Twitter, Facebook, and FriendFeed (as Danny Sullivan highlighted yesterday). Now we need to make that information more useful. Facebook can use their own custom “relevance algorithms” to determine which feed stories are most relevant. For those stories that have been shared privately, Facebook can simply find the one individual that shared the story publicly and use that in the results.

I’m now getting in to the technicalities of how it would work but the main point is that Facebook is at the beginning of their search evolution. The next phase involves relevance and Facebook is well positioned to provide that relevance thanks to all of the personally relevant information that they have about us. It’s time for Facebook to organize the information coming out of the real-time social firehose.

Rediya Kadeer, president of the World Uighur Congress, explained “social media is critical to the Uighurs’ cause” in an exclusive AllFacebook interview earlier this week. Facebook wall posts were used to spread news after Twitter shut down in Urumqi, China, AllFacebook reported Sunday.

China’s shutdown of Facebook is part of a larger social media trend where citizens are denied access to Facebook and Twitter as a means of enforcing state control over media. Google was also targeted in dramatic fashion on Chinese TV recently, when Google’s “autosuggest” search functionality was manipulated by Beijing to show how Google actually suggests that Chinese users search for porn online.

China is also watching Iran, where social media effectively provided live coverage of the election protests. An Internet exec commented to me that “it’s as exciting as the CNN coverage of the first Gulf War” to watch the protests unfold via Twitter.

Facebook Confirms China Problems:

Bloomberg covered Facebook’s coy response to being blocked in China:

“It does appear to be running slowly” in China, said Larry Yu, a spokesman for Palo Alto, California-based Facebook. “We’re looking into the matter, what the reason is for the service running slowly.”

Facebook using the words the “service is running slowly” is a bow to the power of the Chinese government. Larry’s choice of words also echoes the cautious approach to the Chinese market that all Internet majors are taking, after seeing Google’s problems in China and watching Yahoo!’s legal drama in China.

How Does the Government “Block Facebook”?

The Chinese government simply doesn’t let requests to Facebook.com be processed. Its really that simple to block Facebook. However, this level of control requires a sophisticated, large scale effort to accomplish.

China’s control over its Internet infrastructure is so complete that Internet packets addressed to Facebook servers are routinely deleted. China’s government is open about the fact that it inspects Internet traffic that 1) comes in and out of the country and 2) that travels around in the country. China uses sophisticated technologies like Deep Packet Inspection (DPI), where Internet routers analyze, drop and even save Internet packets - instead of simply passing them along (as they normally do).

China’s government control over information is not just technological - its economic. China’s government exerts control over every significant business in the country. Companies in China must be majority owned by a Chinese citizen, and even then are heavily regulated by the government. All the major corporations in China, including telecommunications and media companies, are state owned entities or are majority owned by the state. This exerts a significant level of state influence on how people receive and send information.

MySpace China

News Corp was forced to be a minority partner in MySpace China. MySpace could only launch operations in China if MySpace China was controlled and owned by a local company, and after receiving the appropriate licenses from various government ministries.

MySpace China was not targeted because it is “social media”. Yahoo Inc. and eBay Inc. both now follow China’s rules for foreign ownership of Internet companies, after attempting to reach Chinese citizens from operations based outside of China.

Future of Facebook China

Facebook may well face a permanent struggle in China. As the global leader in social media, Facebook should continue to give a voice to those challenging to the authority of the People’s Republic of China.

Will Facebook Be Banned On Every PC in China?

China recently mandated that all PCs in the country must use software called “Green Dam-Youth Escort“. Once installed, the software blocks your PC’s access to banned web sites. The Green Dam-Youth Escort software also does things we associate with spyware, like logging keystrokes, taking screen shots and sending information from your computer to third parties.  If Facebook is put on the Green Dam-Youth Escort banned site list, it will dramatically impact Facebook’s international growth prospects.

Urumqi Crisis Victims

Our hearts go out to everyone killed, injured and disrupted in Urumqi. Hopefully you can read this.