Facebook Goes On Offensive Over Ad Effectiveness — Haters Unite!

Now that their “quiet period” is over after their IPO, Facebook was finally able to go on the offensive this week and publicly address the criticism they’ve been receiving over whether advertising on the platform works.

The first thing they did on Tuesday was to release a study (a few of them, actually) by research firm comScore.  A study that Facebook partially funded.

ComScore, by the way, is to internet marketing as the Nielsen ratings are to TV.  Their research data is pretty much taken as gospel by those within the industry.

The studies centered on a combination of “earned” media and paid advertising on Facebook.  Facebook defines earned media as the messages and updates that users share with each other (not the ones brands pay to promote.)

Breaking Down the Studies

Target, Best Buy and Starbucks were the companies focused on, from an earned media perspective.

Two groups of people were looked at for each brand’s study, each group having identical purchase behavior prior to the study.

Starbucks:  comScore tracked people who were already fans of Starbucks on Facebook against a control group of people who were not fans.  Obviously, the people who were already fans of Starbucks were receiving messages and updates from the coffee brand.

ComScore found that over a four-week period, fans and their friends went to a Starbucks and bought something 38% more frequently than people who weren’t exposed to the messaging and updates.

Target:  Just like the Starbucks study, comScore tracked people who were fans of Target and their friends  on Facebook and found that those people bought at Target 21% more frequently than those who weren’t Facebook fans of Target.

Big Whoop…Or Is It?

Ok, so people who are fans of a brand on Facebook buy more of that brand than those that are not.

This realization isn’t earth shattering.

What IS interesting, though, is that friends of the fans of the brands who also saw the messages and updates, were also prompted to go and buy something at Starbucks or Target.

This is really the power of marketing on Facebook.  The social proof.  People tend to take actions based on the suggestions from their friends.

Paid Advertising Results

In addition to the earned media studies, comScore looked at paid ad campaigns too.

One study was for an unnamed national retailer that looked at groups of Facebook users who were exposed to a paid Facebook ad campaign about that national retailer, and another group that was not.

The results?

Those that saw the ads were 16% more likely to buy stuff at the retailer.  The ad campaign also resulted in a 56% increase in online purchases from the retailer.

In addition to the retailer study, Facebook says it’s conducted research on about 60 ad campaigns over the last couple years to measure their return on investment (ROI).

70% of those campaigns, reportedly, showed a return of 3X on the money spent for the advertising.

You’d take $3 for every $1 you spent, right?

But Wait!  Facebook PAID for This Study!

This has been the reaction I’ve seen from most people after they’ve heard about the study.

They think the findings of these studies don’t prove anything, that because Facebook helped fund them that the results are skewed positively for Facebook.

Maybe.

But I have to say that in my 10+ years of being in internet marketing, I can honestly say I don’t think I’ve EVER seen a study that’s been funded and released by a company that doesn’t show that company in a positive light.

I mean, they wouldn’t release the results if they weren’t good, right?  Duh.

The thing is, it doesn’t do Facebook (or any of the brands mentioned, for that matter) any good to manufacture the results.

And, I don’t believe they did simply by paying for the study: they’re the results of campaigns by these big-time brands. That’s what matters to those who are deciding whether or not to market on Facebook: results.  Who cares who paid for it?

What We Can Take From these Studies

Basically, the people who want to hate Facebook and see it fail are going to cry foul on these studies.

But those of us who see the value and potential in a platform with 900 million people can learn something here.

As you can see, both earned and paid media were studied and measured.

That’s important in and of itself.

You need to be looking at Facebook marketing on the whole. Interacting with and engaging with your fans on a regular basis is an integral part of being successful on Facebook.

You should be doing this while strategically running smart, targeted ad campaigns.

Leveraging both of these strategies is when you’ll see the best results.

The bottom line is that Facebook is still only a few years old.

Yes, in Internet years I realize that’s a long time.  Kinda like “dog years.”

But they’re still trying to figure out how best to integrate advertising into their platform without disrupting their 900 million users.  They’re looking for balance, which I appreciate.

Facebook even admits that their advertising “is a work in progress.”

(Shameless plug: that’s why I’m here to keep you updated and help you learn!)

One thing you can expect more of, though, is that Facebook will continue to look for ways to seamlessly integrate ads within the natural places that users get their information.

This will include when you access Facebook from your computer and increasingly more on your mobile device.

Stay tuned ’cause I’m sure there will be A LOT more to come!

 

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