Is Facebook the World’s Largest Billboard?

Recent comments by Brad Smallwood, Facebook’s Head of Measurement and Insights, have really thrown marketers for a loop. At the recent Interactive Advertising Bureau MIXX Conference, Smallwood indicated, “It is the delivery of the marketing message to the right consumer, not the click, which creates real value for brand advertisers.”

In essence, Facebook is downplaying the role of the almighty click, falling back on long-term marketing truisms that recency and frequency are the keys to marketing effectiveness.

Most organizations waste a good portion of their marketing dollars, but lack of direct metrics leaves them at a loss as to what’s effective and what’s failing.

eMarketing is supposed to fix all of that, right? So Smallwood’s comments fly in the face of digital marketing dogma. We’re supposed to be able to see and track marketing effectiveness online.

Where’s All This Coming From?

The truth is that Facebook advertising has gotten some fairly negative press in the past year, which has done nothing to help the stock price of the newly public firm. Case in point being General Motor’s much publicized decision to pull all advertising from Facebook only days before its IPO.

The challenge for GM (who has since returned to Facebook) and other online marketers has been lackluster click-through rates for Facebook ads. Dollar for dollar, Facebook gives advertisers great reach relative to Google, but click-throughs are few and far between.

Facebook is therefore looking to recast the metrics of success that online marketers use. A good strategy given their predicament, but does it hold water?

A Defense of Recency and Frequency

Admittedly, Smallwood makes a good point. We know that brand impressions are important and the tremendous amount of time spent on Facebook each day gives ample opportunity for impressions. Further, how important are those clicks? GM sells very few of its cars online. Online advertising builds awareness and preference for a sale that happens at a local dealership.

This puts Facebook ads in the same category as TV, radio, billboards and other advertising vehicles (pun intended) on which many industries, including both automobiles and healthcare, invest the bulk of their advertising dollars. And, relative to those advertising channels, Facebook offers better targeting, control, and metrics.

The Flip Side

On the other hand, impressions aren’t always effective. As the classic saying from John Wanamaker goes, “half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Mass market advertising requires messaging that appeal to the largest possible audience. Highly targeted advertising can be far more impactful when the messaging is tailored to each customer segment. These segments can be fickle, however, and it can be tough to build traditional focus groups that allow you to hone those messages appropriately.

That’s rarely been an issue online as you simply refine your marketing message in real-time with real data that allows for quick tailoring and adaptation of messages.

That is, of course, if anyone chooses to interact with those ads.

Low click-through rates make it difficult to determine if an ad is working, eliminates your ability to adapt campaigns mid-stream, and undermines your tracking for ROI. Again, this is no different than most of your advertising spend today, but it places it at a disadvantage relative to other online marketing options.

What Do You Think?

So what’s your take on the question of Facebook’s advertising effectiveness? Are clicks the end-all be-all? Or is Smallwood pointing out an important piece of marketing effectiveness that we seem to have lost in this online world?

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3 thoughts on “Is Facebook the World’s Largest Billboard?

  1. Good post – I think it’s a mix of being impressed or unimpressed based on exactly what the goals are. Impressions are the land of awareness and also in many cases the PR world – but yes, clicks are the almighty call to action. And what action you’re calling is really important too. Facebook’s ads seeking to drive Page Likes (subscriptions) are actually pretty effective – and that’s a powerful action to get someone to essentially sign up for more info. Rather than click through’s to an outside site purely for the click itself – even if the target bails the moment they see your website.

    As with anything, it’s about your goals and the most effective routes there. Sometimes Facebook ads are appropriate, and sometimes they’re not – like ANY tactic!

    My two cents,
    Dean Browell

  2. You have to be in the consideration set of your consumer for them to choose your products or services, so I feel there is value in measuring impressions. That being said, you still need to measure what gets your target audience to respond so click-throughs count as part of the decision (or buying) cycle. I would agree we are mass-marketing via Facebook unless you have a lot of money to hyper-target. The “fish where the fish are” concept holds true even for online audiences. Being that Facebook is where people are for so much of their time spent online; you have to be in the game at some level.

  3. Great post. I actually think that Facebook attempting to de-emphasize the “click” is an attempt to prevent comparisons between their ad click-throughs against Google. But really, that’s like comparing apples to oranges – people searching on Google are seeking information in a much different way than people perusing through Facebook.

    What’s interesting is that in my experience is that while FB ads have a much lower CTR (than Google PPC), the behavior of the “clicker” is significantly different: they spend more time on the page and tend to remain engaged when they opt-in to email communications, etc. So arguably, they are a much better “click.”

    Great post, Ben.

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