Filed by KOSU News in Business.
May 16, 2012

Michael Friedman and Greg Augarten sell New York-style pizza in New Orleans. Their operation, Pizza Delicious, is a takeout window between Piety St. and Desire St. They’re only open two nights a week. If you’re in the know, you can call them up and order a pie.

Business has been good, and they’re about to buy their own place. So for the first time they’re considering paid advertising. They’d been thinking about advertising on Facebook but didn’t know how.

Meanwhile, we were working on some stories about Facebook and wanted to get inside Facebook ad campaign and see if it really worked.

So we hooked the Pizza Delicious guys up with Rob Leathern a social media ad guru.

The key question they tried to answer: Which Facebook users should they target with their ad campaign?

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 Pizza Delicious guys really wanted to find people jonesing for real new york pizza. So they tried to target people who had other New York likes — the Jets, the Knicks, Nororious B.I.G. Making the New York connection cut the reach of the ad down to 15,000.

Seemed perfect. But 12 hours later, Michael called us. “It was all zeroes across the board,” he said. Facebook doesn’t make money til people click on the ad. If nobody clicks, Facebook turns the ad off. They’d struck out.

So they changed the target to New Orleans fans of Italian food: mozzarella, gnocchi, espresso. This time they were targeting 30,000 people.

Those ads went viral. They got twice the usual number of click throughs, on average. The ad showed up more than 700,000 times. Basically, everyone in New Orleans on Facebook saw it. Twice. Pizza Delicious got close to twenty times the number of Facebook fans they usually get in two days. The guys were stoked.

The campaign cost them $240 — almost $1 for each new Facebook fan they got from the campaign.

“Is that feeling of exhilaration worth 240 dollars?” Michael said. “I don’t know– hopefully, that translates into new business.”

It didn’t.

After a long night of asking every single customer where they found out about Pizza Delicious, not one said it was through Facebook.

But while Greg took the garbage out, he checked his phone. And there was a message:

Just found out about you guys via a sponsored Facebook ad if you can believe it. Super excited about your new place– happy to toss in a few bones over the top.

That guy kicked in $10 to support the new restaurant.

“And that was cool,” Michael said. “We got some return on our ad.”

That return — $10 dollars on a $240 dollar investment — isn’t much.

Maybe at some point, the new Pizza Delicious fans will show up and buy some pizza. But social advertising is so new that nobody knows for sure. It’s still unproven, untested and largely unstudied.

Some companies, like Ben and Jerry’s, say they have gotten a big return. Others say they haven’t. On Tuesday, GM said it was pulling its Facebook ads because they haven’t done enough to generate new business. [Copyright 2012 National Public Radio]