How To Steal Your Competitor’s Customers On Facebook

Have you been spending all of your Facebook Advertising dollars trying to reach people in your target demographic? Why don’t you strip out some of that effort and just go directly for your competitor’s fans? This technique will surely boost your fan base while simultaneously annoy the heck out of your competitor! Read on to learn more.

In traditional PPC, Quiznos can bid on Subway, and ReadyTalk can bid on WebEx – even mentioning the competitor’s name in the ad. If your firm is trying to beat Company X, the acceptable ad copy is “better than X”, “read reviews of X”, “before you try X…”, “compare X and Y”, and so forth.

But on Facebook, you can do MUCH better and it’s much cleaner. We’ll break down the techniques used, the strategies behind them, and how this differs than competitive targeting in search. You may even consider implementing these in your own Facebook campaigns today and see surprising ROI before you leave the office this evening. And it will be so effective that your competition will be hopping mad, but unable to respond because it’s completely within Facebook’s advertising guidelines and white hat in nature. This is especially effective in David and Goliath situations, where you are the underdog with a tiny budget and you’re going up against a big brand. We’ll explain why in a minute.

SMX and Search Engine Strategies are competitors in the search marketing conference space. Both are well-respected companies with events around the world and a portfolio of print and online publications. In full disclosure, I am a speaker for both – I don’t profess any loyalties to one over the other, and I am a fan of both organizations (figuratively and literally).

In one week, SES is having a conference in San Francisco – and they are promoting it via Facebook ads to their Facebook page:

SES Ads Screenshot

Naturally, they are targeting people who list “search engine marketing” as an interest, “Chief Marketing Officer” as a job title, and “Advertising Age” as a magazine they read. They also happen to target fans of Search Engine Land, a publication of their rival, as well as fans of SMX. To get attention, they call out these users by interest:

SES Mashable Ad

SMX has only X fans compared to Y fans of SES, but this is still a highly relevant, highly profitable segment to target. Because Facebook traffic is so cheap, the cost of such laser- targeting is a few dollars a day. To make the math simple for this example, let’s round up to assume your rival has 2,000 users to target. For you to be able to hit these users 3 times per day with ads (6,000 impressions total) at an average price of 25 cents per thousand impressions, you’re spending $1.50 a day to do this. This is not possible via PPC except perhaps through remarketing/retargeting – and definitely not at this price with this level of control.

Facebook Ads Math Graphic

If you’re rotating ad copy to prevent burnout, bidding on a CPC vs on a CPM (Facebook changed their algorithm to favor CPC for getting clicks), and know how to create effective Facebook ads, you will be inundating the most loyal fans of your competitor with messaging. If you’re a little brand, these Facebook users will think that you’re flooding all of Facebook with ads, that it must be expensive, and that you must be a trustworthy brand because of how much this advertising must cost. Professional marketers may be incredulous here, as they “know better”, but consider that the average user has little understanding of how ads work.

Your competitors will certainly notice your ads (if they don’t, then you’re not effective or they’re not monitoring Facebook) – and some of them will send you a hastily written threat. If you do competitive targeting, be prepared for these angry responses. Even though what you’re doing is 100% within Facebook’s advertising guidelines, they won’t know this and you’ll have to decide how to respond. I’m not a lawyer, so I can’t give you advice on that.

One thing that you can’t do is use their trademarks and logos in the ad image – that could potentially confuse users as to who is the advertiser. You also cannot create ads that appear to be from your competitor, as that would be clearly misleading. A good rule of thumb on what is acceptable use is whether the average user will somehow be misled by the ad. Thus, to say to readers of magazine X that they should try product Y is completely acceptable and an example of good advertising.

If you want to avoid angst from competitors getting mad that you’re pinpoint targeting their best fans, then what you’d do is run the same ad but without professing knowledge of what interest you’re using to target. Your CTR will be a bit lower – and, therefore, your CPC will be a bit higher – but you still get the same reach and same effectiveness in messaging and conversion. As we’ve discussed in other articles on allfacebook.com, the image is the most important element of the ad anyway.

When you run competitive targeting ads, users who see your ads won’t explicitly know what triggered the ad for them. Certainly they can guess – and my profile lists so many internet marketing interests that I have no clue which one could have possibly triggered an ad. So the “stealth bomber” approach is to run a ton of highly targeted ads and not explicitly reveal your targeting but just be as relevant as possible. This also has the benefit of not potentially creeping out users with ads that are a bit too knowledgeable.

At some point, Facebook may allow consumers to click on and see what targeting parameters triggered the ad. More practically, Facebook allows you to remove yourself from all profile-based targeting – an honorable move, but one that likely few users are doing or even aware of.

Remove Targeting Screenshot

Now for those who want to really go for it – to be as aggressive as possible, but still stay within the terms of service, here are some cutting-edge techniques to employ for competitive targeting in Facebook:

  • Switcher campaigns: Show us you’re a member of X and we’ll give you [free_prize]. When I was at American Airlines, we ran campaigns where if you were elite on another airline, we’d instantly make you elite on our airline. By removing or significantly reducing switching costs, you allow your competitor’s best fans to try you with low risk – and not have to fly 50 segments in the next 12 months to get to platinum. How might that apply to your business?
  • Cherry picker campaigns: In the airport today, I saw Kaiser Permanente’s ubiquitous “Thrive” campaign, this time showing a woman doing a yoga move. On the surface, consumers may applaud that Kaiser is promoting fitness and sharing tips on how to be healthier. But really, what they’re doing is disproportionately drawing the healthy users to their HMO – the folks who are fit, eat well, and are less likely to go see the doctor or file a claim. Why not saddle the other HMOs with the fat, unhealthy folks who will be unprofitable at any premium?
  • Intentional churn campaigns: What attributes of your customer base closely align with being profitable versus the kinds of “headache” customers who cause you to lose money? For the latter, consider running ads on behalf of your competitor and sending them to their website. Yes, this is a gray hat tactic – but at the same time, your competitor is “benefiting” from free advertising – especially if you are running their same ad copy. Incidentally, for one client, we had considered changing the call center queue from “your call will be answered by the next available representativ” to telling unprofitable customers “for faster service, you should go to our website and here is the number of our competitor”. With a bit of clever programming, we could prioritize the queue by profitability, which means the good customers go to the front of the line, while the dregs might never ever get to the front. We didn’t implement this idea because of the backlash potential – though it’s really just an extension of common tiering programs used by most companies.
  • Endorsement campaigns: What could be more powerful than getting your competitor’s most loyal customers to become a fan of your page and then have them tell their friends about how awesome you are? What would you pay for that? The simple solution is to implement a custom “reveal” tab that exposes content upon them hitting the like button. Then offer a giveaway (drawing for a popular consumer electronics item) with entry based on them posting to your wall and getting 3 friends to like it. Remember that you don’t have to make it known that the targeting criteria you’re using is strictly because they are a high value customer of your competitor. You can lock down the contest by including the coupon code in all caps in only the ad itself (not on your page), plus setting additional campaign filters on age and other preferences. Facebook is testing showing endorsements in their ads.

We could go on, but I think you get the idea on the whole new set of tools at your disposal on Facebook that just haven’t existed elsewhere. In review, if you’re a new rock band and your genre is similar to bands X, Y, and Z – what’s wrong with running ads asking these users to check out your music? How is that any different than Amazon.com’s collaborative filtering (people who bought X, also shopped for Y), except that you’re taking the recommendation into your own hands?

Consider this: In traditional paid search, you must patiently wait for someone to type a keyword (your competitor’s name, brands, and related search terms) into a little box – to actively state a preference. If they say they’re wanting X right now, then it’s hard to change their mind except via persuasive ad copy. By the time they’ve decided to search on something, it’s already late in the process.

Omniture Targeting

But when you competitively target on Facebook, you’re reaching them well before they have searched for you – and there is a lot more volume. If you’re WebTrends, you can target fans of Omniture and Google Analytics without them ever having searched for you. You’re not stealing from their search traffic, and this is legitimate competition, whether they like it or not. Thus, running competitive targeting ads is NOT brand bidding.

And unlike campaigns designed to acquire Facebook fans, these campaigns are designed to get users to consider the merits of your product or service. Thus, the ad copy shouldn’t be designed to drive an in-line like, but to encourage a click-through to a landing page that specifically emphasizes how your brand is better than the other brand. So if you’re ReadyTalk (and your big competitor is WebEx), you don’t have to mention WebEx, you merely talk about your personal service (to work with a company that answers the phone, versus a giant conglomerate), your Facebook integration, and your favorable pricing. Nowhere do they mention WebEx, but certainly they are directly attacking the weak points of their competitor.

And isn’t great advertising fundamentally about saying the most relevant thing to each individual user?

Dennis Yu has helped brands grow and measure their Facebook presences. He has spoken at Search Marketing Expo, Search Engine Strategies, Web 2.0, The American Marketing Association, PubCon, Conversational Commerce Conference, Pacific Conferences, HostingCon, Affiliate Summit, Affiliate Convention, UltraLight Startups, MIVA Merchant, and other venues. Yu has also counseled the Federal Trade Commission on privacy issues for social networks. Yu has held leadership positions at Yahoo and American Airlines. His educational background is finance and economics from Southern Methodist University and London School of Economics.

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