Campaign India Team
Dec 26, 2013

No, Facebook is not failing marketers

The author debunks a Forrester report, which raised questions on the efficiency of Facebook marketing

Thomas Jestin
Thomas Jestin

A recent Forrester report stirred up trouble regarding the efficiency of Facebook marketing for brands that invest in it, with its author, Nate Elliot, even sending an open letter entitled "Facebook is failing marketers" to Mark Zuckerberg himself.

This report was based on responses from 395 marketing decision-makers from three countries (US, UK and Canada) and it placed Facebook last among the tens of digital channels it was compared against, with a mark of 3.54/5, with the best of the ranked channels receiving a score of 3.84/5.

However, Facebook is far from the thrashing one would imagine when reading the title of this open letter. Truth be told, as soon as it was published, the report quickly generated a flurry of negative reviews against it. It was anathema to its readers, considered a joke and an embarrassment among certain experts.

A small anthology of reactions:

The report has been particularly criticized for its methodology (for example, it relies on electronically administered paid surveys). It was especially criticized for the general claims made in the form of sweeping statements: How can one seriously take the advice of a handful of interviewed decision makers who support one side of an argument while there are more and more studies based on concrete campaigns that prove that the effectiveness of Facebook marketing is getting better and better?

Not only is paid media on Facebook now proved to be very effective, but Facebook cannot be reduced to being thought of as solely paid media for brands! Earned and owned media are other key benefits of the Facebook platform for marketers.

1. Paid media at its best

If critics were to pay greater attention to the capabilities Facebook has demonstrated, they would see that it is now a well-established advertisement business that has proven time and time again to be effective. Relevant studies, based on billions of impressions, are continuously being published. Here are a few examples:

  • According to a study by Adroll, conducted on a billion Facebook impressions, the Newsfeed Ads bought via the Facebook Ad Exchange “translated into 77 percent lower cost-per-action compared to web retargeted ads” (June 2013, Venturebeat)
  • A study by Nanigan carried out in the third trimester of 2013 and based on 200 billion impressions for 100 retailers, showed a ROI of 152 per cent from Facebook ad spend (October 2013, Venturebeat)
  • Facebook carried out a study in 2011-2012 in collaboration with Datalogix (a company which analyses purchasing record, via loyalty membership cards, of 70 million American households from more than 1000 brands). This study was based on 45 branding campaigns on Facebook and demonstrated that for 70 per cent of these campaigns, a one-dollar investment will yield at least 3 dollars in sales, with 49 per cent of those cases showcasing a ROI that was fivefold.
  • Kenshoo Social, for its major clients in the first semester of 2013, obtained the same ROI with media buying via the Facebook Ad Exchange as with search advertising, based on the analysis of a campaign counting several billion impressions. (August 2013, KenshooSocial).

Here are some of the comments made by Facebook in Business Insider following the release of the Forrester report:

“While we agree that the promise of social media is still in process, the conclusions in this report are at times illogical and at others irresponsible. The reality is that Facebook advertising works. That's why we have more than a million active advertisers including all of the Ad Age 100. And, countless studies have demonstrated the significant return on investment marketers see from Facebook. Our promise is to continue to deliver positive results for marketers.”

A good example: Samsung USA has been able to attribute $US129 million of revenue as a direct result of a Facebook ad campaign, a return that is 13 times the original investment made! Samsung Mobile USA invested 30 per cent of its digital budget in Facebook which reached 105 million Americans in 3 weeks. They specifically targeted Facebook members that were fans of Samsung, friends of those fans and mobile phone users in general.

Ads with social context are particularly effective for branding purposes, with an ad recall 50 per cent better than with regular ads. Advertisers’ ability to target desired audiences on Facebook is also constantly improving. The last few months have been rich in innovations with the popularization of Custom Audiences, Lookalike Audiences, new partnerships with third party data providers such as Datalogix, for greater qualitative targeting, the new emphasis on the Newsfeed (whose ads generate 49 times more clicks at 45 per cent less cost than right-hand side ads), the streamlining of ad units, Post View and Post Click Conversion Tracking and most recently retargeting by Facebook IDs upon activation by users of a Facebook pixel placed on advertisers' website or  mobile application.

To drive home the message, let me quote the vice president of Coca-Cola International, Ivan Pollard during an interview by French media Journal Du Net in July 2013: “We believe in the effectiveness of advertising on Facebook."

Facebook advertising is also unfairly valued due to the "last touch attribution" model.  This model is still used by a lot of e-marketers, who give most of the credit of the desired action to the last click and thereby de-value previous contacts with the brand. “By analysing more than 500 media buying campaigns, Aggregate Knowledge discovered that by using the 'multi-touch attribution' model rather than the 'last touch' to allocate media budget across different channels, brands experienced a 33 per cent increase in actions, conversions and sales”, reports Facebook COO Sheryl Sandberg.    

Finally, the infamous Forrester report quotes General Motors “departure” from Facebook advertising in May 2012 as a good example to illustrate the threat to the website’s sustainability, if the latter does not “act quickly” to change course.What the report fails to mention is that General Motors had not entirely left the social media network and instead had rather just stopped investing in paid media advertisement, only to return in April and reinvest more efficiently less than a year after their alleged “departure”.

2. Owned media better than you think

We often hear that the reach of page posts is now limited to 16 per cent of fans, but this is forgetting that a page can publish as many posts as it wants to. For this reason, it is not uncommon to reach more than 50 per cent of fans in a month by simply publishing once a day, as it is not exactly the same set of fans who will be exposed every time.

The vice-president of Coca-Cola International said: "There is a genuine complementarity, I think, between our Facebook paid media efforts which allow us to build an audience, and community management, which allows us to engage with it"

In addition, recent changes in Facebook policies allow advertisers to host contests directly on their company’s Facebook Timeline page, in order to more easily engage their fans. Such a contest was organised for the French auto services brand Speedy (by my agency, KRDS) with our Facebook contests and promotions tool PromoFactory. This tool we created allowed us to reach 50 per cent of the fans with just one post and generated 50 times more comments than the average number seen on posts from the month before.

3. The realm of earned media

Earned media has garnered a good standing on Facebook, which makes sharing so frictionless, whether it be on Facebook itself or off Facebook thanks to social plugins such as the iconic Like button. KRDS publishes CommitStrip, a daily comic strip based on the world of developers.  Launched almost a year ago without a single cent invested in paid media, CommitStrip has now more than 100,000 unique visitors per month, a result solely due to earned media.

Facebook's APIs allow brands to offer immersive experiences where logging in and sharing are completed with a simple few clicks, brands can also easily pull opt-in user information at the same time. All brand contacts are not of equal value : when a user spends five minutes interacting with a brand on a "Facebook-connected" microsite or Facebook full canvas application, the effect on brand awareness, brand image and purchase intent is significantly greater than what a single paid impression would do. But paid media and earned media are far from being exclusive, quite the opposite actually. Lastly, Facebook connected engagements are also a way to drive owned media since they can send Facebook notifications to users to make them come back.

The application that KRDS created for French TV channel Canal+ that allows users to make predictions on French Football first League each week, for example, holds the world record for the longest life span of any brand app on Facebook. Launched in 2009, it continues to bring more than 100,000 players every month to this day, and has generated more than 400 million "earned media" impressions in newsfeed of users' friends during the 2012-2013 football season.

To quote the VP of Coca-Cola International one last time: "Today, Facebook is a fantastic platform for us, because it gives us the proper tools to engage with our community and learn from it. Hence, I do not see any reason to let this land lie fallow"

Thomas Jestin is co-founder at social-media agency KRDS

Editor's note: Jestin submitted this column before Facebook's recent inauguration of video advertising.

The article first appeared on www.campaignasia.com

Source:
Campaign India

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