There’s a current of thought that direct-response ads don’t work for Facebook. Why not? The theory is that Facebook users do not want to leave the ecosystem. They’re on Facebook to socialize, not to shop (which is why F-Commerce didn’t work so well).
We all know the scenario: a user sees an ad and doesn’t click on it because he isn’t ready to leave Facebook; he wants to browse his news feed and check out some photos from the party the night before. When the user finally leaves Facebook, he remembers the ad he saw and checks out the product online. He buys the product online. And Facebook gets no credit.
Advertisers have tolerated this lack of tracking for a very long time due to Facebook’s inexpensive CPCs. But as the years have gone, rates have climbed, and there has been a growing backlash among major brands such as GM, which, as we all heard, pulled Facebook advertising dollars and stated that Facebook ads had little impact on consumer purchases. This negative press, along with the pressures of being a public company, might have forced Facebook’s hand – and that’s a good thing.
If you’re among those frustrated that you haven’t been able to connect the dots to disprove the theory that Facebook ads don’t work, Christmas has come early. Facebook is rolling out a new sales tracking tool to connect those dots once and for all.
The tool is in limited release to select advertisers, but it is expected to be released to the self-serve platform soon. The key here is that the tool will provide information after a consumer views the ad, within a time frame of minutes to weeks.
Finally, credit where credit is due!
This has actually been in the works for some time. Facebook partnered with Datalogix to study the impact of Facebook ads. Datalogix, according to insidefacebook.com, has purchasing data from about 70 million American households based on loyalty cards and programs at more than 1,000 retailers.
Datalogix matches email addresses or other information associated with those memberships with the email addresses or information associated with their Facebook accounts. The emails and other personally identifiable information is anonymized, but the companies can compare the differences in sales among groups who saw certain Facebook ads versus those who didn’t.
The studies were conclusive, showing that in 70% of the cases, every $1 spent on Facebook led to an additional $3 in sales. And I believe Facebook took this as pretty gospel – or at least they must believe that their ads do work – since I doubt they’d release the tool if they feared the data it’s about to provide.
We will finally find an answer to the age-old question: do Facebook ads drive sales?
I think we know what we’ll find out. There is nothing more satisfying than concrete data, and soon the masses will have the ability to prove it, through the self-serve ad platform – with a click of the export button. Ho, ho, ho!
– Clark Sioson