“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by David Serfaty, director of social advertising at Matomy Media Group.
Is Facebook failing marketers?
The answer is yes, according to the conclusion of a surprising new report from Forrester Research.
Facebook is no longer the belle of the marketing ball, in the eyes of Forrester analyst Nate Elliott. As he sees it, the social network’s shift from affinity and social connections in its ad products to more direct response-friendly advertising offerings, such as its launch of cost-per-action ad buys in April, is a fundamental mistake that is costing it dearly.
Elliott feels so passionately about Facebook’s apparent failure that he penned an open letter to CEO Mark Zuckerberg that begins with a simple but scathing statement: “Facebook is failing marketers.”
In other words, Facebook’s attempt to give advertisers more of what they have been clamoring for — ad solutions that help acquire customers and drive actual sales — is resulting in declining trust and satisfaction among marketers.
I’m not buying it.
True, the Forrester report doesn’t paint a pretty picture for Facebook. Only 51 percent of marketers are satisfied with how Facebook helps them connect with consumers, according to Elliott’s research, which surveyed a statistically insignificant 359 marketers that is hardly representative of the thousands of Facebook advertisers. Marketers surveyed by Forrester ranked Facebook last for creating business value among a list of more than 10 digital marketing opportunities. Clearly, some marketers aren’t too happy with Facebook.
But don’t let the data fool you. Facebook isn’t failing marketers. Marketers are failing Facebook.
This isn’t 2009. Facebook is no longer just an engagement platform. Like the rest of the online advertising world, it is embracing the trend of delivering real, measurable business results. Marketers need to understand that running a Facebook campaign just to build brand affinity or cultivate likes and shares is not a viable social advertising strategy. It can, and should be, a successful and profitable direct-marketing tool for advertisers that can improve both engagement and sales.
The beauty of Facebook’s advertising transformation is that its direct-response ad solutions retain a social context. A News Feed ad can contain both direct-response and engagement elements. Unlike most online ads, Facebook’s ads give marketers the ability to simultaneously target both upper-funnel objectives like awareness and intent, as well as drive lower-funnel objectives such as sales and leads.
It’s only natural for Facebook to shift from affinity to performance-based social ads. Elliott’s claim that Facebook “focuses too little on the thing marketers want most: driving genuine engagement between companies and their customers” may align with the data Forrester collected but it doesn’t square with reality. Ask marketers what they most want from any online or mobile ad campaign and their response is likely to fall within two broad buckets: generate awareness and affinity, and acquire more customers. Those two goals aren’t mutually exclusive.
Marketers who claim they prefer engagement over ad solutions that provide more revenue and customers are fooling themselves. Engagement is great but it doesn’t hold a candle to generating more revenue from your advertising.
Don’t get me wrong. Facebook’s so-called “affinity engine” has its merits. It is useful in a variety of situations, such as helping a challenger brand build affinity and support in a competitive industry.
We can still expect to see a future in which social and affinity data get used in campaigns with upper-funnel objectives like awareness and intent. But the preponderance of data surrounding online advertising spending points to advertisers’ preference for performance-based ad solutions. Performance-based pricing models now comprise 66% – $24 billion – of the $36.6 billion spent on online advertising in the United States, according to the IAB’s 2012 Internet Advertising Revenue Report. That percentage has been growing in recent years as CPM-based online ad spending slowly decreases.
Forrester’s report misses the forest (pun intended) for the trees. The long-term benefit of advertising on Facebook isn’t purely brand awareness and affinity. The long-term benefit is awareness and affinity plus engagement and actual sales.
Facebook isn’t failing marketers. Marketers that cling to an outdated perspective of what makes a successful social advertising campaign are failing Facebook.