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What Advertisers Are Saying About Facebook

In June of 2012, we wrote a post about how Facebook advertisers were not seeing a great return on their investment. In August of this year, AdAge surveyed 1,200 people about their thinking regarding Facebook as a marketing channel. The AdAge article summarizing the study seems to put a more positive spin on the results than what the actual data shows (you can read the AdAge article here), so we thought we’d do our own analysis.

Who is buying Facebook ads?

This was a really interesting part of the survey. The first question asked what relationship the respondent had to the marketing world. The highest percentage of respondents replied they work for an agency. Given that AdAge primarily targets and covers the agency world, this is probably not surprising. The second highest percentage of people handle their own marketing.

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People buying Facebook ads tend to work for smaller companies with smaller marketing budgets, as the following charts illustrate.

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Marketing Segmentation

This part of the survey struck us as slightly confusing. Consider the following two charts, as an example. The first chart indicates that online marketing represents a very small portion of the respondents’ marketing budget, but the second chart indicates that 83% of respondents use Facebook as a marketing channel.

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One wonders if this implies that marketing on Facebook in ways other than advertising is not considered a part of the marketing budget. For example, respondents to question 2 may have been thinking of a Facebook page rather than advertising. On the surface, a Facebook page can seem like it is free, but of course that ignores the time involved to monitor and post content.

This chart also indicates that of marketers who use online tools for their marketing, the majority still rely on Facebook very little.

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The Question of ROI

The other disconnect we found in the survey revolves around the question of ROI. First, take a look at how respondents said they are using Facebook:

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Note that the two objectives most closely aligned with realizing a return on investment – generating sales leads and selling products, rank fairly low in importance. Of those who answered the question (and note that more people skipped this question), 48% said that they use advertising on Facebook to build brand awareness.

And yet…

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Although Facebook is a distant second in terms of generating ROI, one must wonder where that ROI is coming from or how it is being measured if most ads are being used to raise brand awareness. My fear/hypothesis is that the number of “likes” on a page is being used as a metric, which is, of course, not a true measurement of ROI.

The results from this study seem to indicate that small companies with small marketing budgets are to some extent using Facebook as a marketing channel. It would appear that they are only tracking advertisements as expenses, and it would also appear possible that companies are still tracking “likes” as a measurement of return, which is incorrect.

For us, this survey raises more questions than answers regarding what advertisers on Facebook are gaining. What do you think?

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5 comments on “What Advertisers Are Saying About Facebook

  1. I think there’s a difference between using (#13) Facebook to sell and generate leads, and it actually doing so (#14). A billboard neither directly sells anything or generates leads, but it can have ROI. Whether or not they’re measuring it, I think these companies see brand awareness as an intermediary driver of ROI (or non-financial, as Mr. Blanchard says). If I were filling out the survey, I wouldn’t say I used Facebook to sell anything unless I had a shopping cart app built into it (or if I used promotional codes), and I would only say I used Facebook for lead generation in as much as I could measure direction form submissions from promotion on Facebook. Just my thoughts…

  2. I’ve designed and managed FB ad campaigns for a number of clients in both B2B and B2C, primarily for the purpose of fan acquisition to the pages (at least initially), and I can say with certainty that FB ads work.

    They can be incredibly targeted within niche interests and categories and, if coupled with a lead generation mechanism, can track directly to an increase in sales. A modest ad spend ($10/day) on FB can (and does) demonstrate enormous ROI.

  3. […] After analyzing the survey, Margie Clayman writes, “The results from this study seem to indicate that small companies with small marketing budgets are to some extent using Facebook as a marketing channel. This survey raises more questions than answers regarding what advertisers on Facebook are gaining.” […]

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