They say Facebook has an ad problem because, unlike Google, the social network is like a party — and no one wants to leave a party to go shopping. This theory got a boost this week when an IBM study of Black Friday suggested that social media’s effect on cyber-shopping was nearly zilch.
D’oh! This is precisely the sort of thing that retailers who have just laid out a million bucks for Facebook or Twitter ads don’t want to hear. But here’s the study, showing that Facebook ads only led to 0.68% of shoppers making an online purchase on Black Friday (and Twitter ads produced no sales at all!) :
Fortunately for retailers (and Facebook), there is more to the story. According to a media intelligence service, Aggregated Knowledge (AK), Facebook ads have a big effect on online purchase decisions — leading to a 51% increase in conversions ( the term for when people buy or do something in response to an ad). AK also says Facebook ads are a way for brands to reach big target audiences they wouldn’t reach elsewhere online, and that “conversion rates” are 72% cheaper than for other online channels.
AK knows this because it works with large social media advertisers to collect data about Facebook user behavior. This data collection is possible because Facebook recently provided e-tailers with tools that will let them track users to see who responded to an ad. (Yes, there’s a creepy factor here though major sites like Amazon and Google have long used similar tools).
AK’s numbers are good news for Facebook but the social network will still have to persuade advertisers and the media to accept them. The challenge lies in getting ad types to accept the notion of “multi-touch attribution” rather than “last touch.” In plain English, this means that conversions should be counted even if the occur hours or days after you leave Facebook — for instance, you see a bath salts ad on Facebook, surf dozens of other websites, and then buy those bath salts the next day. (TechCrunch’s Josh Constine has made the same point well here).
Seen from this lens, Facebook’s “party” problem isn’t so bad. After all, we discover lots of new desires at a party — that girl’s dress, that guy’s cowboy hat, those delicious cocktail wienies — that we go out and buy for ourselves later on.
(Image by Ariwasabi via Shutterstock)
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