There are two ways to buy ads on Facebook: from the social network’s in-house sales force, or through Facebook’s self-service advertising centre. The former is reserved for larger advertisers, who have $10,000 or more to spend. These advertisers get premium placement on the platform, as well as other benefits like enhanced performance reporting.

Self-serve ads are for marketers who want to spend much less. You see these units in the right-hand space on your friends’ Facebook pages. While small businesses dominate the space, we’ve also seen some big brands there. It’s a big business for Facebook, apparently accounting for 60% of their revenue last year.

Over the past three years, we’ve done our share of self-serve advertising on Facebook, having placed over $100,000 of these ads. We’ve learned a few things along the way that we’re happy to share with you.

It’s about the CPC, not the CTR. We’ve seen click-through rates (CTRs) on self-serve ads drop precipitously over the past three years. These days, CTRs well south of 0.10% are the norm. But crappy CTRs don’t matter much when you’re paying on a cost per click (CPC) basis – provided your ad is performing comparably to other ads it’s competing with for placement. Though our CPCs have increased by almost 100% over the past three years, recent campaigns have delivered average rates that are still well below 50 cents, and compare quite favourably to ads run on Google.

Facebook ads have also been criticized by some for having a short shelf life. Our own experience indicates that a Facebook ad can run for weeks without tiring, and have a wear-out rate somewhere between a display ad and a Google ad.  And adding “social impressions” does help prolong the life of a Facebook ad.

In any event we don’t see fatigue as much of an issue, as we are continuously changing creative in a quest to maximize performance.

Don’t forget the value of an impression. The upside of a low CPR is that Facebook gives you lots — and lots — of impressions in order to meet your daily budget. For example, a daily budget of $200, a target CPC of $0.50, and an average CTR of 0.05% combine to give you 800,000 impressions per day. Spend that amount for a month, and you’ll get close to 25 million impressions. That’s a ridiculously low CPM of $0.25. We’ve gotten CPMs even lower.

All those impressions represent an opportunity to build awareness of your brand, even if users aren’t clicking on them. True, an ad unit with 135 characters of copy and a 110 x 85 static image doesn’t give you a lot of creative flexibility. But a series of well-crafted Facebook ads can indeed tell your brand’s story.

The old rules of direct marketing are alive and well. Facebook has breathed new life into the old direct marketing axiom that success is 40% offer, 40% targeting and 20% creative. Offer and creative can be endlessly tested on the platform, with results seen almost instantaneously. The platform, with its vast (and much maligned) trove of user data, allows infinite targeting possibilities. Test and learn, a fundamental principle of the forgotten craft of DM, is the key to maximizing the ROI on your Facebook ads expenditure.

In fact, we think Facebook is a direct marketer’s dream. Too bad true direct marketers are so hard to find these days!