We’ve all heard the positive statistics about Facebook – they have 1.19 billion monthly active users; they’ve experienced a 66% increase in revenues vs. the same quarter last year; and 49% of their revenue is coming from the fast-growing mobile segment.
And that’s just the beginning. There are several other impressive statistics – more than 50% of their users log in at least once a day; more than 30 billion pieces of content are shared each month; and the average user spends over 700 minutes per month on the platform. (Sources: Mobile Marketer, Facebook, Business Insider)
But here’s a statistic I came across in an excellent article by Chantal Tode at Mobile Marketer – a recent study by Forrester indicates that out of 395 marketers and business executives surveyed, Facebook ranks at the bottom of a list of 13 marketing channels in terms of delivering business value.
You mean to tell me that out of 395 business people surveyed, Facebook ranks at the bottom of the list? Really?
The Forrester Report Was So Shocking I Had to Conduct My Own Survey.
How can it be that the platform getting all the buzz and attention is considered the worst of the lot? I was so intrigued by this that I conducted my own informal poll using Twtpoll and members of the 60 Second Marketer community.
I asked the question, “Have you been able to generate a positive return on investment from a Facebook campaign?”
The results of our informal poll supported what respondents said in the Forrester study — that Facebook ads don’t actually work. In our poll, 5 respondents said yes, they were able to generate a positive ROI; 5 respondents said they didn’t know if they generated a positive ROI; and 12 respondents (including 2 CEOs of well-respected marketing firms) said no — they weren’t able to generate a positive ROI from a Facebook campaign.
If Facebook is So Bad, Why Are Marketers Still Using it?
The results of the Forrester report are very shocking indeed. So much so that media outlets like The Next Web have written rebuttals claiming the Forrester report was wrong.
But I don’t think what I’ve read about the Forrester report is wrong. While I haven’t shelled out the $499 to read every word of the report, the information that’s widely available online clearly indicates that 395 business executives ranked 12 other marketing options ahead of Facebook, which came in dead last at number 13.
But if Facebook is so bad, then why do companies like Coca-Cola, Red Bull, Starbucks and Converse put tons of money against their Facebook pages?
Those guys are smart. What’s up with that?
Here’s what’s up. The majority of buzz about Facebook revolves around Pages, not ads. In other words, the smart guys at Coke, Starbucks and Red Bull understand that the value behind Facebook is when it’s used as a branding tool, not a customer acquisition tool.
Facebook is Good for Branding But Horrible for Customer Acquisition
If you’re going to spend time and money on Facebook, I’d suggest you focus your efforts on keeping your existing customers engaged with your brand via your Facebook Page. In other words, use Facebook as a tool to develop trust and loyalty with your existing customers, but don’t use it as a tool to acquire new customers.
Typically, most people who want to acquire new customers via Facebook do so by running a Page post photo ad, a Page post text ad, a Page post video ad or any of the other ad formats offered by Facebook.
But if you take a close look, you’ll see that most of the big brands have abandoned these ad formats. Go ahead and take a peek on Facebook right now – you’ll notice that about 80% to 90% of the ads you’ll see there are from small businesses. My hunch is that most of the small businesses don’t have the time or expertise to measure the success of their ads, which is why they keep wasting money on Facebook.
In a nutshell, the big boys have abandoned Facebook advertising and instead devote their time and efforts to running their Facebook Pages. They know that Facebook is a perfectly good branding tool but a horrible customer acquisition tool. As a result, they’ve abandoned Facebook ads altogether.
Action Steps for You.
We’ve covered a lot of ground here, so let’s do a recap:
- Do Facebook Ads Work? No, not really. You may find some people who have been able to make them work, but my agency and large, sophisticated marketers like Coca-Cola, Starbucks and Red Bull have abandoned using ads for customer acquisition. (You can, however, use Facebook ads to generate Likes for a Page, which is a branding play, not a customer acquisition play.)
- Why do You See Big Brands on Facebook? They’re focusing their efforts to their Facebook Pages, which are great tools to create brand loyalty. Facebook ads, however, are a different thing altogether and indications are that they don’t actually work.
- If Facebook Ads Don’t Work, Where Should I Spend my Money? First of all, don’t just rely on my blog post to formulate your opinion — run your own tests. Perhaps you’ll be one of the businesses that can generate a positive ROI from a Facebook ad campaign. But if you can’t, then I’d suggest testing other marketing channels like paid search, direct mail, radio, print and a few dozen other options. (If you want to explore some of those options, and you’re spending more than $500,000 a year on marketing, feel free to email me and I can show you how to use those tools.)
The key is to test your way to success — that’s the only guaranteed way to get the most bang for your marketing buck. Stick with it – over the course of time, you’ll find the platforms that work best for your unique business. And that, my friends, is where the fun begins.
Jamie Turner is the CEO of the 60 Second Marketer and 60 Second Communications, a marketing communications agency that works with national and international brands. He is the co-author of “How to Make Money with Social Media” and “Go Mobile” and is a popular marketing speaker at events, trade shows and corporations around the globe.