Thursday, January 20, 2011

Stronger Evidence that Facebook Ads Work

I’ve commented before that my post last February about Facebook advertising effectiveness, “Do Facebook Ads Work?,” is by far the most visited post on this blog and it continues to draw traffic. I followed with one on targeting that I think is important, though it hasn’t been as popular. Every time I do some research on Facebook ads I find something that I didn’t previously understand. This time it’s “social context.” I had seen it, but I didn’t really understand its source or its value.

What started me thinking about it was recent articles on the growth in Facebook advertising. Tuesday’s eMarketer newsletter pointed to huge growth in Facebook ad revenue.
Commentary in AdAge that pointed out that, “what is surprising is the majority of revenue, 60% or $1.12 billion, was earned from smaller companies in 2010, those more likely to be using self-serve tools rather than work through a media agency. That's greater than the $740 million coming from major marketers like Coke, P&G or” In November, ComScore figures had revealed that Facebook was now the largest online display advertising publisher, with over 23% share.

Growth, of course, only implies advertising effectiveness; it does not document it. The most compelling piece of research (full document below) goes back to April, and after I read it several times, I began to understand the “social context” issue. Nielsen has identified three kinds of ads—ads with and without social content and organic impressions. Facebook doesn’t use this terminology in any of their advertising material that I can find. Facebook simply points out that all Facebook ad formats have the Like icon at the bottom to encourage social content. This page shows a homepage ad that has no social content. It also shows a homepage ad with social content; that happens if one of your friends has “liked” the brand. The final type is what Nielsen has termed an “organic impression,” a notice on the page of a friend of a user who has liked or engaged with the brand. Facebook uses the phrase “may appear on the news feed.” I couldn’t find out what “may” means here.

This chart from the same study shows that both types of ads with social content are more effective in recall, awareness and intent. Personally, that doesn’t surprise me because I tend to find myself paying attention to the names first and only secondarily to what they liked! Isn’t it human nature that when we see names of people we know, we pay attention? The study is brief, so page through it if you need more detail.

So how do you get more people to like your brand so they can appear in these ads? (Facebook’s privacy policy seems to give implicit permission for your name to be used when you like the brand. There is supposed to be a way to disable this feature, but I don’t know anyone who knows how to do it.) That makes the strategy issue for marketers getting more people to like their brand in the first place. And the best advice seems to be the simplest—just ask them! That’s what Virgin America is doing on the ads above. Going a step further, you can create something called a “reveal tab.” That allows you to make a members-only offer—to ask people to like your brand in order to get an incentive of some kind. These are two simple strategies that can add to your fan numbers.

And the point of all this is that the more fans you have, the more likely they are to show up as social context in your ads and as items on their friends news feed pages. That gives your ads the aura of being recommended by a friend of the viewer. And it has a high probability of making your ad more effective!

And so it goes in the wonderful world of Facebook!


seo content writer said...

It's interesting to take a look at those charts and see how the revenue has grown. But unlike local media, Facebook doesn't have ad representatives everywhere to sell to local businesses.

NicolasFSS said...

First of all thanks for the great blog. I read the Nielsen report and found it very interesting. The experience I have with FB Ads supports the results, but it’s great to have it proven.
In the last part you are talking about reveal landing tabs. Reveal tabs can be a great way to encourage people to become fans, but can backfire if the hidden content or benefit is not as great as described on the reveal tab.

Unfortunately, a lot of Spam sites are using reveal tabs, promising great benefits if someone becomes a fan, but mostly leaving fans disappointed once they have become a page member.
A negative experience--disappointment or feeling cheated by a page--makes it less likely for a user to trust other reveal tabs. In this case, a page using reveal tabs risks to scare away a person who might otherwise have become a fan if the benefit was provided for free.

Besides that, reveal tabs don’t precisely fit into the “like-concept.” The act of liking something shows support or sympathy with something you know. Peter likes Microsoft. Most reveal tabs ask you to like something you still don’t know.
A fun site called “the ten funniest Google search terms” click like to see the terms.
In this case users are forced to like something they don’t know in order to see it.

In conclusion, it can be said that the use of reveal tabs should be something well thought. First of all, the promised benefit for liking should be authentic and as described. Secondly, it should be considered that some people don’t like reveal tabs and will leave without interacting with the fan page. Depending on the theme of the fan page, marketers should check out if other competitive fan pages use reveal tabs and if they offer what they promise in order to decide whether a reveal tab fits into the concept of the page!
Greetings Nico

MaryLou Roberts said...

Thanks, Nico, for a very informative comment. What you say about reveal tabs makes a lot of sense. Basically they are offering an incentive and if person has to do (or to buy as in direct mail offers) something and the incentive isn't as promised it is a big negative!Don't know what we can do about the spammer aspect, but legitimate pages certainly don't want to look like them!
Thanks again!

John Katrina said...

Mary Lou,

Very well done ...

Nice comments also on how the double edged sword of "like" must be considered.

I would like to add that the growth in ad revenue may or may not be in proportion to the growth in Facebook accounts, and therefore simply indicative of a higher volume of "testers" of the new medium. This seems to be supported also by the percentage of smaller self serve advertisers.

Secondly, there may be contribution through a phenomenon we call "trial churn" in which a product or service does NOT deliver, but the allure is so great that there are always fresh newcomers in the market who are trying it. This sustains a prduct that actually doesn't please. A good example is exercise equipment. Very few deliver what they promise, but there is a critical mass of newcomers to keep buying enough to keep the business alive. Word of mouth moves much slower on these types of offerings.

Lastly, the lack of good news about Facebook ads versus AdWords would also be an indicator that their efficacy is lower.

Might I request a future article about what types of products and services are getting better responses?

Thank you,
John Katrina

Fernando Caviedes said...

My name is Fernando Caviedes from Colombia.

It is interesting to find out the different mechanisms for posting ads on Facebook.
I thought it was much more effective to use paid ads. But when you see the comparative charts made by Nielsen, you can see that the freepress remains a powerful tool today. Organic impressions appear to be a little more efficient than the Homepage Ads and homepage ads with the social context. Apparently our efforts should focus on finding more fans, which at the end will originate many more s organic impression and we will enter in the era of the earned media.

Company, T. N. (2010). Advertising Effectivenness. The Nielsen Company.

MaryLou Roberts said...

John and Fernando, thanks both of you for thoughtful comments. And, yes, I was also struck by the fact that friends were more important to the advertising effort than I realized. I know it's said that small business is fueling the growth in Facebook advertising, which would translate "retail." However, I've never seen anything on what particular products/services are getting the best results. I'll keep an eye out for that!

Emi said...

Professor, very interesting article I would also like to add that even little kids are in Facebook. I have seen my nephews liking many things, although they don't have a power of adquisition yet. I wonder how measurable is the marketing success if we consider just the likes in our page, are they real customers? or relevant to position the brand?

MaryLou Roberts said...

Yes, even young kids are on Facebook--and I hope their parents are watching! Children have always been a powerful influence on household purchases--especially those that affect them directly. I don't know that any Facebook "Likes" are bad. If kids like products for which they are not in the target market and their friends are also not in the target market, then the likes aren't worth much. The reasonably good demographics that Facebook can provide help tease that out--unless kids lie! And that's one thing parents should monitor!