The answer is that it depends on the user. Social media purists claim that “everyone hates ads,” and “nobody clicks on them.” And they’re not only wrong. They’re damn wrong. A recent campaign I saw for a company that posted a Facebook offer supported by a buy of around $5,000 saw 1.5 million impressions and 40,000 claims.
That’s 40,000 people (the brand has about 200,000 Facebook fans) that saw the ad, clicked on it and claimed the offer.
Do Facebook Campaigns Actually Make Money?
The same case study mentioned above did. Remember, they spent $5,000. The purchase item (the claim was free, but once you turned it in, you bought the product) was $30. Even at a conversion rate of five percent (which is high in SEM, but not in Facebook offers in my experience), you’ve made $60,000. (I wasn’t privy to how many they actually sold.)
Sponsored stories and Like-gathering campaigns are a bit of a different animal, but remember my thoughts from last week about conversion rates? If you know you can drive, say, eight percent of your Facebook fans to purchase an offer or deal, then driving more Likes means increasing the number that eight percent produces.
If you work backwards from the amount of money you want to make, you can determine how many fans you need at what price point to build your promotion.
Isn’t Facebook Just Desperate For A Revenue Model
Certainly the increased frequency with which you’re seeing offers, sponsored stories and ads — not to mention Facebook Gifts which is building out some compelling functionality to drive purchases — shows that the billion-user-gorilla in the room is focused on driving revenue. They’re a publicly traded company now and have to do so or investors will sack the leadership.
But I wouldn’t use the word “desperate.” Rather, I’d say they are fine-tuning the network to be a revenue engine. Certainly, they will need to watch the delicate balance of user-experience, but when enough people will click on an offer to motivate advertisers to keep coming back and spending their money, it’s hard to swallow the myth that the ads aren’t effective or that people don’t click on them.
Gifts was mentioned as part of a $5 million non-gaming revenue piece in Mark Zuckerberg’s call with investors last month. But at the rate we’re seeing gifting opportunities, I’m betting that’s because a portion of the Facebook audience is clicking and buying.
What We Can Do To Make It Better
One of my common frustration points in seeing people talking about Facebook advertisements, offers and sponsored posts is that many don’t seem to understand active participation helps Facebook deliver more relevant ads to you. Did you realize you can click on any ad and tell Facebook it’s spam, irrelevant, etc.? Even the ones on the right sidebar!
Sponsored stories and offers can be flagged as well and Facebook likely uses this activity to not only know better what types of ads or sponsored stories you won’t mind in your feed, but also to inform the advertisers on what portion of their targeting finds the message relevant.
By actively clicking on that little drop-down arrow in the upper right corner and telling Facebook what you think of that ad or sponsored story, you’re improving your own experience. So if you have some time to kill, do so.
And Then There’s THAT Complaint
Go to the Facebook page of any brand that is spending significant dollars on Facebook advertising, sponsored stories and offers and you will probably catch a few posts from users saying, “STOP SPAMMING MY PAGE!” The adverse reaction to advertising on Facebook is apparent, but limited. The problem most often stems from sponsored posts that are targeted at “friends of friends.” They never opted in to see your content so you’re foreign to them.
Unfortunately, this adverse reaction to marketing message is going to happen, but is under-informed. Unless or until Facebook offers paid subscriptions in exchange for ad-free experiences, this is the price you pay for a free social network and connection to your friends and family. It’s the old ad model — Free television programming in exchange for 12 minutes of commercials an hour. Facebook is trying to make it more relevant messaging with some success, but nothing earth-shattering yet.
Still, some people just don’t want ads. Maybe enough will that a subscription model will emerge. If not, it’s a small price to pay. But marketers will need to be prepared to communicate that to users.