With Facebook's stock down over 40% since their May IPO, they have embarked on an aggressive campaign with the aim of persuading the market that their revenue streams are viable. There has been much debate recently as to the efficacy of Facebook advertising, something that Facebook's execs are keen to defend.
In order to prop up their stock valuation Facebook have been forced to be more overt about their advertising placements. It's clear that more of the platform is for sale now than has ever been and regular Facebook users will have noticed the increased presence of sponsored posts in their newsfeeds, both on desktop and mobile. But the fact of that matter is that people don't click on them as much as they do on traditional digital adverts.
The most recent figures I've seen have the average click-through-rate for an ad on the internet at around 0.1%. Facebook currently delivers a CTR of half of this at 0.051%. Google's ad network on the other hand delivers four times the average click through with 0.4%, making Google's advertising a huge eight times as effective as that of Facebook.
It's pretty hard for Facebook to argue with these numbers, so instead they've tried to move the goalposts. After arguing for years that their platform is about engagement, influence and conversation, they now want to move away from using clicks as a metric and instead concentrate on the efficacy of Facebook as a reach and awareness platform.
This seems somewhat disingenuous to me. I heard Paul Adams, Facebook's own Global Head of Brand and Design and one of the leading thinkers on the emerging social web, talk specifically about how platforms like Facebook will mark the end of distraction mass advertising as we have traditionally known it. He talked about the billboard as an example of a dying advertising format as it was designed purely to distract people from doing the thing they should be concentrating on doing. He talked about the TVC as an example of marketing arrogance, putting up a barrier in front of what the consumer really wanted to get at. And most of all, he talked about engagement being the real king.
Where have these mantras disappeared to? Concentrating on Facebook's potential as a reach and awareness platform by placing adverts in the centre of people's newsfeeds is doing exactly what a billboard does. It is putting a barrier between the consumer and what they want to be doing. And it's not engagement.
I'm sure there are some good reasons why Facebook advertising doesn't get the same click-throughs as Googles. Firstly, on Facebook a user is looking to socialise. They're not shopping or searching for products or services in the way they might be when exposed to a Google ad. But changing the numbers to suit the story can't be the right strategy for correcting this. If Facebook want to make their advertising more attractive, they need to make platform changes that allow those ads to appear in greater context. Perhaps putting such weight on the advertising being in social context simply doesn't work.
I talked some time back about Facebook being on the brink of plucking defeat from the jaws of victory. That prediction may have been somewhat facetious, but one thing's for sure, their future is looking less certain than it was a few years back.
In order to prop up their stock valuation Facebook have been forced to be more overt about their advertising placements. It's clear that more of the platform is for sale now than has ever been and regular Facebook users will have noticed the increased presence of sponsored posts in their newsfeeds, both on desktop and mobile. But the fact of that matter is that people don't click on them as much as they do on traditional digital adverts.
The most recent figures I've seen have the average click-through-rate for an ad on the internet at around 0.1%. Facebook currently delivers a CTR of half of this at 0.051%. Google's ad network on the other hand delivers four times the average click through with 0.4%, making Google's advertising a huge eight times as effective as that of Facebook.
It's pretty hard for Facebook to argue with these numbers, so instead they've tried to move the goalposts. After arguing for years that their platform is about engagement, influence and conversation, they now want to move away from using clicks as a metric and instead concentrate on the efficacy of Facebook as a reach and awareness platform.
This seems somewhat disingenuous to me. I heard Paul Adams, Facebook's own Global Head of Brand and Design and one of the leading thinkers on the emerging social web, talk specifically about how platforms like Facebook will mark the end of distraction mass advertising as we have traditionally known it. He talked about the billboard as an example of a dying advertising format as it was designed purely to distract people from doing the thing they should be concentrating on doing. He talked about the TVC as an example of marketing arrogance, putting up a barrier in front of what the consumer really wanted to get at. And most of all, he talked about engagement being the real king.
Where have these mantras disappeared to? Concentrating on Facebook's potential as a reach and awareness platform by placing adverts in the centre of people's newsfeeds is doing exactly what a billboard does. It is putting a barrier between the consumer and what they want to be doing. And it's not engagement.
I'm sure there are some good reasons why Facebook advertising doesn't get the same click-throughs as Googles. Firstly, on Facebook a user is looking to socialise. They're not shopping or searching for products or services in the way they might be when exposed to a Google ad. But changing the numbers to suit the story can't be the right strategy for correcting this. If Facebook want to make their advertising more attractive, they need to make platform changes that allow those ads to appear in greater context. Perhaps putting such weight on the advertising being in social context simply doesn't work.
I talked some time back about Facebook being on the brink of plucking defeat from the jaws of victory. That prediction may have been somewhat facetious, but one thing's for sure, their future is looking less certain than it was a few years back.
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