March 01, 2012


Facebook is like the telephone. It's great for chatting, but not terribly good for selling.

One of the most remarkable things about it is the blind faith that marketers continue to have in it despite its questionable record as a marketing vehicle.

For people who are marketing things, there are two ways to use Facebook -- the free way and the paid way.

Making a Facebook site is the free way. People can interact with your brand and, presumably, act as advocates. This is called "engagement."

Buying ad space on Facebook is the paid way. Facebook provides paid advertising space on other peoples' Facebook pages. This is how Facebook makes money.

The only problem is, both of these methods of using Facebook for marketing are seriously flawed.

Let's start with "engagement." Engagement -- like "branding" and "conversation" -- is one of those dreadful cliches that means whatever some hustler decides it means. Social media jargonistas throw it around like awards at an advertising conference. They start from the position that social media participation is de facto evidence of brand engagement.

According to Ad Age, researchers at the Ehrenberg-Bass Institute (whatever that is) did a study to determine the true level of engagement of Facebook fans.

They defined "engagement" as actually doing something other than just "liking" a brand. People had to either share something from a Facebook page, or comment on something to be counted as "engaged."

They studied 200 of the biggest brands on Facebook. The rate of "engagement" was less than one half of one percent. What this means is that someone in a fit of unbridled enthusiasm may have clicked the thumbs up button one day, but the chances are less one in two hundred that she has ever commented or shared anything from the site.

According to Senior Research Associate Karen Nelson-Field...
"The significance here lies in the very tiny rate of engagement across all brands in a big sample."
Next time you get the "engagement" argument for social media, try not to get a hernia laughing.

Then there's paid advertising on Facebook. There has been substantial uproar about Facebook's intrusion into the private lives of its users. They know everything about us -- from what kind of dog we have to who gave us that nasty rash. All this information about our behavior and our preferences and our personal lives is supposed to allow advertising on Facebook to be uniquely effective.

In fact, advertising on Facebook is uniquely ineffective.

The click-through rate for online display ads in general is an alarmingly low one click in a thousand. If you think that's bad, the published click-through rate for ads on Facebook is 50% below this. And according to insiders, I am told that Facebook's true click-through rate is actually 80% below average.

In summary, as a medium for "engagement" Facebook doesn't seem to be very engaging, and for paid advertising its effectiveness is mostly a rumor. So how in the world can it be worth $100 billion?

Simple. The marketing industry has bought into the magic of social media marketing lock, stock, and pixel and nothing, including factual evidence, is going to change that.

No marketer in his right mind would pay to be ignored by a small number of people. But there is apparently great appeal in being ignored by hundreds of millions.

1 comment:

Olin Graczyk said...

Just so I'm clear.. are you stating that the current "advertising mechanism" for Facebook is failing?  If so, I'm on board.

But, I just want to be clear that you aren't stating brands can find success of Facebook, period.  If so, I greatly disagree.