Facebook advertising brings poor results

Posted on July 11, 2007 by Luke

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Since this article was written, Facebook advertising has changed considerably. ‘Flyers’ are no more. We now have the option to choose cost-per-click ads and manage spend more effectively. There is much more advertising on Facebook. Tracking and targeting tools have improved. Clickthroughs remain low at between 0.03 and 0.08% on an average campaign – however, when budget can be managed through CPC this is less of an issue.

Facebook is the website du jour, but in Reach Students’ experience it delivers appalling ad clickthroughs.

We’ve run four targeted campaigns this year using its flyer ads, and each time the results have been disappointing.

Our most recent campaign saw 1.4 million page impressions delivered at specific universities – and only a 0.04% clickthrough rate. Ouch.

When we first experienced poor results earlier this year we looked carefully at creative and planning. Further experimentation saw a variety of quite different offers and creative approaches. What kept us going was the fact that others had anecdotally mentioned good returns from Facebook ads.

Yet our results did not improve.

Baffled, we did some research and discovered that actually we are not alone.

Valleywag finds that 0.04% is pretty much the average when it comes Facebook clickthroughs – note that they are talking about banners as well as flyers.

There is varied speculation as to why the clickthroughs are so shockingly poor on Facebook. Some have cited the fact the site is essentially messaging orientated – rather than content orientated – meaning that therefore users are in no frame of mind to slope off down trails.

I don’t buy this. As a long time Facebook user myself I find myself inadvertently following trails like a distracted sniffer dog. Similarly I nearly always click on flyers when I see them. I click them because their restrictive nature (there’s little space to work with) means the advertiser often has to be clever, and I am usually intrigued by the offer.

Many of the flyer ads I’ve seen have been very clickable – much more so than typical banner ads. That said, I actually don’t see that many flyers on my Facebook travels. Nothing like the amount that are displaying on my network, according to the flyers board.

It remains a mystery to me why such perfectly targeted ads with highly relevant messages perform so badly on Facebook compared to other sites – often sites where the targeting is less precise.

Until solved, I think we’ll stick to PR initiatives through the site – such as our work for Avenue Q that generated over ¼ million mini-feed messages through user profiles. And on a budget significantly smaller than it costs to buy the same number of Facebook clickthroughs.

In fact, at least $199,000 smaller!

Discussion: 88 Comments

88 Responses to “Facebook advertising brings poor results”

Newer Comments »

Michael Clarke

- 12th Jul, 07 10:07am

On a much smaller scale, we’ve also been trying out flyers with similarly poor results. On the other hand, the Facebook group for the student services organisation I work for has turned out to be a great laboratory for our staff to learn some tough lessons about social media which we’ll be applying in the future.
K R

- 12th Jul, 07 12:07pm

Well personally, I just use an adblocker.

No ads, no problem, in my view.
xman

- 12th Jul, 07 12:07pm

Mystery? Students are intelligent. They are not taken in by advertising and so don’t click. Why would they want to? Also lots of them run with ad blocking software so won’t see the ads. I wasn’t even aware that Facebook had ads…..
Luke (author comment)

- 12th Jul, 07 12:07pm

Xman writes: “Mystery? Students are intelligent”

The mystery surrounds the poor ad clickthrough rate on Facebook when compared with other sites where a similar (mostly intelligent) demographic is found.

I agree students are intelligent. I agree so much that I describe my business as ‘Digital marketing to intelligent youth’!

Are you saying only dumb people click ads?

You may be thinking here of ‘ads’ in terms of those intrusive buzzing flies you have to swat or bouncing smiley banners…but the flyers I ran were generally promoting proven content, were neatly integrated with the Facebook mood and were pitched to specific uni networks.

Those that say ‘what ads – i didn’t know facebook even did ads!’ kind of illustrate the point here too. How come people aren’t seeing them?

Students are tech-savvy, but I don’t think the Ad Block factor explains everything. I’d certainly be interested to see figures on Ad Block take up among UK students.

Also I wonder if Ad Block identifies flyers anyway? They are not served remotely – unlike their banners – and I imagine they get through as an integral piece of the page??
Jackson

- 12th Jul, 07 01:07pm

I am thinking about running a small local Facebook ad campaign for my retail clothing store in Nashville, TN. Do you have any pointers for maximizing Facebook ad campaigns? Or is it just a total waste?
Owen Cutajar

- 12th Jul, 07 01:07pm

I’m with K R above. My browser has an ad blocker which blocks anything that might distract me from what I’m trying to look at.

I hadn’t even noticed that FaceBook had ads till just recently …
Dave McClure

- 12th Jul, 07 02:07pm

Yeah, basically this same point was made on the Pro*Net Advertising blog by Muhammed Saleem, but i think they’re both missing the point.

Advertising sucks on Facebook because *CPM-BASED ADVERTISING* sucks, not because Facebook sucks.

The real opportunity is in developing Facebook apps that engage users, and draw them into more meaningful conversations with specific workflow relevant to the type of products & services they want — if you do that, then the mktg/adv opportunities will become readily apparent, and will take off like a rocket.

for more thoughts on How to Market Facebook Apps & Be a Better Lover, see my post here:
http://500hats.typepad.com/500blogs/2007/07/marketing-faceb.html

enjoy.

- dave mcclure
Luke (author comment)

- 12th Jul, 07 02:07pm

Hey Dave – I certainly don’t think Facebook sucks, and I am with you on connecting through apps (a very good way to go I think). The post was more simply about the fact ‘traditional’ ads on Facebook don’t work that well at all.

Jackson – I would take Dave’s advice and build an app! If you can’t afford that I’d look at doing something through groups. You might want to give the flyers a go – they are SO cheap, it doesn’t cost much to see for yourself. Make sure you set up analytics so you can track results.
Justin Yost

- 12th Jul, 07 04:07pm

I have to agree with #6, students click less and less on ads, especially the more tech savvy and educated they are.
Hal O'Brien

- 12th Jul, 07 05:07pm

“Are you saying only dumb people click ads?”

Yes.

More than that… Only dumb people *place* ads, as there’s no empirical evidence that ads lead to sales.

More than anything, what you’re observing here is the beginning of the end of all advertising-based media — for purely profit-based, capitalistic reasons.

Advertising delivers zero value to shareholders specifically, and companies generally.

You can look forward to massive shareholder lawsuits against management teams dumb enough to continue to use ads in the face of the lack of empirical support.
Thai Bui

- 12th Jul, 07 08:07pm

“Only dumb people *place* ads, as there’s no empirical evidence that ads lead to sales… Advertising delivers zero value to shareholders specifically, and companies generally.”

Wow. This statement is so incredibly wrong, it’s difficult to believe anyone would say it. Almost any time that we buy or use any branded thing, we’re probably using that particular brand because they paid someone something to make us aware of it.
John DeMayo

- 12th Jul, 07 08:07pm

Any chance we can see the ads in question? I’d love to evaluate design…..

For a cheap RON campaign .04% might not be that bad, but for something more targeted I understand expected CTR is likely to be well north of that.
John DeMayo

- 12th Jul, 07 08:07pm

““Only dumb people *place* ads, as there’s no empirical evidence that ads lead to sales… Advertising delivers zero value to shareholders specifically, and companies generally.”

Actually many companies know exactly how many sales lead directly from that ad. Many track the the impression, to a click, to a sale, or to a form filled out which is followed up over the phone, and then converted to a sale. It’s often called direct marketing, and it makes up a large portion of internet spend.
Hal O'Brien

- 14th Jul, 07 12:07am

“Wow. This statement is so incredibly wrong, it’s difficult to believe anyone would say it. Almost any time that we buy or use any branded thing, we’re probably using that particular brand because they paid someone something to make us aware of it.”

A fine emotional response, but I note there’s no data to back that up.

Look… What you’re arguing is, The more one spends on advertising, the higher one’s sales should be. That means, among other things, the ranking of top advertisers should closely match the top rankings of the Fortune 500 (which is by sales).

Here’s Neilsen’s most recent update:

http://www.nielsenmedia.com/nc/portal/site/Public/menuitem.55dc65b4a7d5adff3f65936147a062a0/?vgnextoid=764d40cf14023110VgnVCM100000ac0a260aRCRD

Here’s the Fortune 500:

http://money.cnn.com/magazines/fortune/fortune500/2007/full_list/index.html

The lists do not match — at all. They don’t even match inversely — ie, the less one spends, the more sales one gets.

No, the relationship between the two is fairly random. Which strongly suggests there no relationship at all.

(And don’t forget survivorship bias. Any number of companies have spent tons on advertising, only to fail anyway.)

If you have better data, show it.
Dan

- 15th Jul, 07 07:07pm

It would be great if Facebook let you target flyers based on interests, i.e. ‘target all students who have an interest in computer science’ or something along those lines.
Tom

- 15th Aug, 07 08:08pm

We have been running very targeted flyer campaigns on facebook with average results.

The click through rate is fairly poor, but conversations are good for those that do click. We are a review based website so that is the bit that matters!
Bubble

- 29th Nov, 07 07:11pm

It’s crap !
Sorry my comments are not more constructive! But I had no luck with my campaigns. I feel, as I have no proof, but face book visitors are their just for fun, if they want to go shopping they use a search engine.
Sadac Israel

- 15th Jan, 08 09:01pm

Facebook with its large subscription must find a way to use advertising without giving their user’s information to its advertisers, or compensate users with a small reward. I know that businesses will pay and pay well for a large market.
Garner NC City Guide
Pete

- 6th Mar, 08 03:03pm

Okay my ten cents. We tested a flyer on Facebook and it rocked. CTR aproaching 3.6%!!! It was so successful it was pulled for three months, tried again and it did a CTR of 4.9%. Thousands of orders from two short campaigns.

Now if you can’t even get 0.1% for your campaign, look hard at your campaign – not Facebook. Sounds like you aren’t as clever as you like others to believe

Luke, Reach Students replies:
If I was clever I would have achieved results as incredible as yours. You should write up a case study – there’s a lot of people who would want to read it, since my figures are considered typical Facebook CTR by consensus of opinion, whereas yours are absolutely remarkable.
Heel

- 9th Apr, 08 07:04pm

http://www.esnips.com/user/kimkardashianvideo||kim kardashian video
http://www.esnips.com/user/rayjkimkardashianvideo||ray j kim kardashian video
nina

- 16th Sep, 08 05:09pm

I am looking into advertising with facebook, but after reading this piece I am not so sure.
Please tell me what the PR initiatives through the site-such as the work for Avenue Q that generated over ¼ million mini-feed messages through user profiles. And on a budget significantly smaller than it costs to buy the same number of Facebook clickthroughs. What is this and how did you go about it?

In fact, at least $199,000 smaller!
Luke (author comment)

- 19th Sep, 08 10:09am

@nina

Hi – take a look at my other post about using social media advocates (under ’social networks’ category). It’s explained there.

When this campaign above was run, Facebook didn’t offer CPC ads. It does now, and i would recommend you try those. Not because they work really well, but because they allow you to control your spend with more certainty.
Inga

- 17th Oct, 08 02:10pm

The mistake that most marketers make on Facebook is – they miss the key “SOCIAL” . Its true people dont come to facebook to click on adds, they come to meet other PEOPLE. The fundamentals of social marketing are advertising true recomendations and influentials. It not an easy concept to grasp, and I am still experimenting. Though I had most success with facebook groups and reaching my audience face to face is most effctive.
axel

- 5th Nov, 08 12:11pm

Thanks for the post, I have been having the same problems.
Golf Trolleys

- 14th Mar, 09 07:03pm

I think advertising on certain websites will get a much greater response as it really all comes down to what visitors are looking for. Especially if the websites are product related to the searched term.
Peter

- 21st Mar, 09 02:03am

It’s cheap enough to try though. I was getting killed on Google’s Adwords. It will be interesting to see how targeted they can deliver the ad for impressions too. I’ll update soon
George

- 19th May, 09 04:05pm

I’ve had some interesting results using an aggregation of highly targeted ads. The trick has been to include something that people are highly familiar with, eg. a location (small and specific).

I am including in the ad text things like:
1. The names of halls
2. The main student suburb (Fallowfield, in Manchester)
3. The name of a popular local park.

My theory being that, whilst surfing Facebook, users are constantly filtering everything for immediate contextual relevance to them.

When I am at home with my parents I notice that I subconsciously filter news and information from friends at uni, when I am at uni it goes the other way.

I’m seeing around 1.2% CTR over my 4 ads, much better than I have heard reported elsewhere.
George

- 19th May, 09 04:05pm

sorry, read 0.12

1.2 in my dreams
Luke (author comment)

- 19th May, 09 04:05pm

Thanks for your insights.

Things have certainly improved with Facebook advertising since this was written, which feels like a long time ago now. I’m perfectly happy with results nowadays, because I can control spend with CPC.

CTR remains 0.03 to 0.08 usually, though we had one campaign that got to almost 0.5 (win theatre tickets) recently.

I agree: try and make ads as relevant as possible and make good use of targeting options (keywords, audience profile).