New Facebook Study Takes on Advertising Critics

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Facebook is finally taking its naysayers on. ComScore, an Internet research marketing firm, released a detailed white paper in collaboration with the social media giant yesterday that made the case that Facebook is effective in influencing consumer behavior.

The social networking giant has always received its fair share of criticism, but since their IPO began trading in mid-May, Facebook has run into a maelstrom of bad press over the effectiveness of their ad platform, among other things. Their IPO’s value has floundered, and the negative publicity has only continued to intensify.

A tiny sampling of the negative press pile-on that’s squashed faith in Facebook: General Motors pulling its 10 million dollars worth of ads from the site; a Reuters poll that revealed 4 out of 5 Facebook users have “never bought a product or service as a result of advertising or comments on the social network site”; a financial analyst on national television declaring, “In five to eight years, they are going to disappear in the way that Yahoo has disappeared.

However, comScore’s newly released white paper buffers such bad news and predictions by contending that Facebook marketing truly works. Citing major brands Amazon, Walmart, Target, Starbucks, Best Buy, and Skittles, comScore found numbers that showed Facebook was good for business.

First, comScore claims that Facebook brand pages are the new brand.com websites. They state, “Facebook’s emergence as a marketing channel has largely centered on the evolution of Brand Pages and their role as a control panel for brands as they establish a direct communication channel with their Fans and customers.” Skittles’ brand website, the firm points out, attracted 23,000 U.S. unique visitors in March 2012, while the Skittles Facebook brand page attracted 320,000 visitors.

While a Facebook brand page attracting so many visitors and accumulating so many fans is good, the paper points out that it’s only the first step. Facebook users spend an average of 40% of their time on their news feed, which means when a brand manages to land on a news feeds, its exposure is many times higher than if it were merely visited on its brand page. In other words, comScore and Facebook are simply saying that brands merely trying to accumulate fans and increase visits need to do more than that; they should encourage shares, comments, likes, and check-ins to increase their fan reach by landing on users’ news feeds. When engaged by their fans with those actions, the average brand message from the top 1,000 brands on Facebook is amplified by 81 times, a sign of organic virality.

And once a brand has exposure to fans, and ultimately, friends and family of fans, what’s the payoff? After analyzing buying behavior during the holiday season of November-December 2011, the study found that Amazon Facebook fans spent more than twice as much at Amazon than Amazon non-fans. Fans of Target were 19 percent more likely to purchase from Target in the month following their exposure to other fans’ messages about Target, while friends of fans were 27 percent more likely to make a purchase at Target. And what about Facebook’s much maligned ads? The research found that Starbucks fans and their friends were 38 percent more likely to make an in-store purchase after exposure to a Facebook ad.

Lastly, after tracking return on investment for more than 60 of the top brands on Facebook, the social giant claims that 70 percent of those ad campaigns experienced a return of three times their investment or more. In addition, almost half of the brands had their return at five times the money they put in.

Overall, the key argument made by comScore is that Facebook advertising is especially effective when it’s paired with a Facebook social marketing strategy that encourages engagement with the brand, resulting in amplification, and ultimately, brand resonance. So according to comScore, and by extension, Facebook, paid ads on the social networking site work–as long as they’re part of a broader social marketing strategy.

 

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