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Facebook to Advertisers: Users Don’t Have to Click for It to Pay Off

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Facebook to Advertisers: Users Don’t Have to Click for It to Pay Off
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“It is the delivery of the marketing message to the right consumer, not the click, that creates real value for brand advertisers.”

And with that, Facebook has a new strategy when it comes to convincing marketers that their ad dollars are well spent on the network. As long as the user sees your ad, they’ll want to buy your product or service. It doesn’t matter if they click, so you should really stop worrying about that metric at all.

Facebook isn’t just telling marketers all of this out of the blue – this comes straight out of a study conducted with new partners Datalogix. The study looked at over 50 digital campaigns and attempted to connect exposure to an ad on Facebook with in-store purchases of said products.

From a privacy standpoint, do you think that Facebook’s partnership with Datalogix is anything to worry about? As a marketer, do you think Facebook is right in moving away from the click as a metric of success? Let us know what you think in the comments.

The name Datalogix may ring a bell, and that’s because their partnership with Facebook has raised some eyebrows over the last week. Datalogix is the owner of a massive database of consumer purchasing data. That data, when matched with Facebook data on ad impressions, can give marketers a general picture on whether or not their ad dollars are being spent on ads the directly lead to in-store purchases.

And that partnership with Datalogix has turned into a way for Facebook to tout their advertising clout with marketers.

Here’s what Facebook’s Measurement and Insights head Brad Smallwood had to say about the study in a studio blog post:

Impressions create value. 99 percent of sales generated from online branding ad campaigns were from people that saw, but did not interact with, ads— proof that it is the delivery of the marketing message to the right consumer, not the click, that creates real value for brand advertisers.

Reach drives revenue for online brand marketers. This is a concept very familiar to TV marketers, who often start with a reach objective—but until now hadn’t been proven for online. When applied to digital brand campaigns, the study demonstrated that campaigns that maximized reach had on average a 70 percent higher return-on-investment.

Finding the right message frequency is key. The study revealed that for online brand campaigns, if you reallocated high frequency impressions to people seeing too few impressions, you would see a 40 percent increase in ROI with the same budget. What this means is that for every online campaign there is a “sweetspot” of effective frequency that maximizes return on investment, and that the DataLogix tool can help marketers empirically isolate that sweetspot for each brand and campaign.

It’s not like there haven’t been positive signs for marketers when it comes to clicks on the network – especially with Sponsored Stories in the mobile news feed. But Facebook has had to deal with some very public votes of no confidence in their platform as a reliable source for ad spend, including the bombshell GM dropped when they yanked all ads just days before Facebook’s big IPO. And many marketers are skeptical that spending money on Facebook is even worth it. Why not just operate a page – that’s free branding, right?

It is worth it, according to Facebook, and they can prove it. Their strategy now relies on the notion that digital marketing is shifting its focus from the click to this more typical metric of measuring ad success. According to them, the Datalogix/Facebook tool is a huge step forward in measuring real return on investment for online advertisers.

Of course, this sort of data mining isn’t without its detractors. Two online privacy groups have already asked the FTC to investigate whether or not the partnership with Datalogix violates a previous order from the commission, where Facebook pledged to make “clear and prominent” disclosure of any sharing of nonpublic user information.

Here’s where the privacy groups feel Facebook may have faltered:

The Commission should investigate whether Facebook has violated Parts I and II of the Consent Order. Facebook did not attempt to notify users of its decision to disclose user information to Datalogix. Neither Facebook’s Data Use Policy nor its Statement of Rights and Responsibilities adequately explains the specific types of information Facebook discloses, the manner in which the disclosure occurs, or the identities of the third parties receiving the information.

In fact, Facebook only mentions Datalogix once – at the bottom of the “Interacting with Ads” page. This page requires at least five actions to reach from the Facebook.com home page and simply directs users to the Datalogix privacy policy. The Consent Order’s prohibition on misrepresentations includes misrepresentations by omission. Thus, the Commission should determine whether Facebook’s failure to notify users of the disclosure of user information to Datalogix violates the consent order.

Facebook felt compelled to explain their purchase tracking initiative in a post to their privacy page. In it, they emphasize that all dat remains anonymous on their end and on Datalogix’s end:

“Importantly, we have designed this process with privacy at the forefront. We compare hashes of some Facebook data with hashes provided to us by Datalogix. Once we compare, we are able to send corresponding data on the reach of large-scale ad campaigns, which Datalogix uses to create aggregate reports comparing product purchases by large groups of people who did or did not see an ad.

Because of our commitment to privacy, we had an industry-leading auditing firm evaluate the privacy implications of this process. The auditor confirmed that, throughout this process, Datalogix is not allowed to learn more about you from Facebook profile information. Similarly, Datalogix does not send us any of their purchase data, meaning we cannot specifically tell whether or not you purchased a marketer’s product. Finally, with this partnership, Datalogix only sends the marketer aggregate information about large groups of people. None of this data is attributable to an individual Facebook user,” said the company.

Going forward, Facebook will continue to use this tool to show marketers that their money has legs on the Facebook platform. It’ll be up to marketers to decide whether or not digital strategies must move beyond the click.

Do you think that Facebook’s assertion that branding and impressions are the proper metric, not clicks, holds water? As a marketer, would you be more inclined to purchase ads on the network if Facebook could prove that they generated real-world sales? Let us know what you think in the comments.

Facebook to Advertisers: Users Don’t Have to Click for It to Pay Off


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  • LEE

    BULLSH**

  • LEE

    THIS IS FULL OF CRAP

  • Wayne

    People waste a colossal amount of time on FB so I guess it could be a good place to advertise, the same probably holds true with Twitter, YouTube, and other social media sites.

  • R.

    I advertised a reunion/homecoming that was not very likely to receive clicks unless the person was specifically associated with the place that no longer existed or the cemetery, there. People who might belong could click and find out more. Many (most) of those connected to the event are not even online, so our reach was extremely limited, no matter who we advertised to. We had very few clicks and only a handful of responses and guess how many of those came? NONE. For that event, clicks meant everything. Probably more than 95% of those who saw the ad weren’t even related to the event, so they didn’t matter and wouldn’t care. However, a newspaper would post the event for a certain amount of time and only reach so many viewers, as would the ads on this page. I think many folks charge too much “per click”. If it would drop the price of overall online advertising, I’m all for losing the click. If restaurants charged ‘per french fry,’ imagine how much more we’d probably pay for them!!

  • Linda Hermanson

    If you tell a lie over and over again, people begin to think it is true. They better tell this bull over and over and over and over again.

  • http://www.nigeriansreport.com/ Orikinla Osinachi

    “It is the delivery of the marketing message to the right consumer, not the click, that creates real value for brand advertisers.”

    FACEBOOK IS ABSOLUTELY CORRECT!

    Once your advert is displayed, it has been seen and it has achieved its first and main objective. To inform the consumers of the product or service. Clicking on the advert is optional and not mandatory for any advert campaign to succeed.
    Frequency of the advert matters more than clicks.

    Do viewers click on TV adverts or newspaper adverts?

  • http://fb lisa

    I would not advertise on FB,,,Fb is a waste and soon will be like myspace.

    • http://www.aceflowershouston.com Samuel steven

      Hi Lisa,
      I have 1 website of flowers that i have to promote with SMO sites, so please suggest some High PR socially websites to promote my website & increase a traffic on my website. this is my website

  • David Huerta

    Well, the true about facebook very simple: Facebook wants to be like old way media advertise -without metrics- . The old way says: just pay me , a lot of people will se your ad and thats must me enought for you -don’t think in sales, think in how many people see your logo -

  • http://coolscrapsdigital.com addie

    sounds like a bunch of bolony to me, you would have to drop the importance of the click importance if you’re not going to be able to successfully compete with the big per per click dogs!

  • http://santebarleyinternational.com Sante Barley

    Wow!

    I can relate your article because i do facebook advertising most of my fb pages! yet i have made success on facebook advertising but sometimes i do have hesitation…

    Sometimes my expectation fails but it really helps… One thing Ive notice is that today fb advertising is a lot more expensive than before.

    Great Topic…

  • http://www.guysgab.com Zander

    Yeah right, 99% of people don’t even pay attention to the ads on FB, and the click-through rates back that assertion up.

    So now FB makes up this study to try and keep the advertisers on board, so they don’t leave like GM did.

  • http://NOYB Fredactor

    Facebook is a waste of time for most people.

    People who are wasting their time will not make good prospects and most will not become customers.

    A click is proof of at least some interest in getting more information about a product or service. A sale is, of course, better.

    Most people visiting a Facebook page will not even notice most ads on that page, if they notice any at all. Proof of interest is needed to get me to spend money. Aren’t other advertisers at least that smart?

    Without proof, don’t trust the people at Facebook who only want your money.

    Fredactor

  • Gregg

    Insane… no one cares about FB ads! Big companies like GM (who already abandoned FB), Coke, Macy’s, and so many others don’t need to pay per click. We all know who they are. Small and medium sized unknown businesses may need to pay per click to grow, but certainly not on FB. It is a waste of time and money that could be spent elsewhere with real results. Even the FB pages are a joke. People get tired of being sold to and hearing from companies so they block the feeds. We used to spend many hours a week updating our page and found it useless. After 3 years with a FB page we can still count on one hand how many people have contacted us directly from FB. FB is for social, not so much for business. FB is pulling out anything they can to try and survive their losses since the IPO fumble.

  • http://www.tden.com King Ralph

    I have heard that there are people making a lot of money advertising on facebook. When I tried it I made one sale but the clicks were so costly it did not pay to continue. I am now skeptical of all marketing claims.

  • http://www.adovationz.co.nz Digmen1

    I am a small business with a website.
    I have run ads on FB and had success.
    But the bit rate is just too high for me.

    I could not not justify running ads just to get exposure, unless they were 5 cents a 1,000.

    For a tv ad, people have to watch it.
    On FB its only if they look out the corner of their eye.

  • http://www.allotmentplanner.org Allotment planner

    Fb has become way to expensive, if we were talking a penny a thousand maybe, but not at the prices they are offering at the moment.

  • http://www.uptowndowntowngifts.com Terry

    Just another testament to what many business people already think – Facebook is all over the map! Very expensive. They started off saying they were a social media site and they are trying to get into the business space and quite frankly, I don’t think they are going to have as much success as they do as a social media site. I think of a 5 year old kid driving a car, eventually it is going to crash and me and my business are not going to be in the back seat. Stick with Google. Mature, intelligent company. Not frustrating!

  • http://www.aceflowershouston.com Samuel steven

    Hello Guys,
    I have 1 website of flowers that i have to promote with SMO sites, so please suggest some High PR socially websites to promote my website & increase a traffic on my website. this is my website.

  • http://www.jddpacific.com Big Aussie

    FB advertising spend should be the same as any other advertising you are doing — if it isn’t measurable (1800 number, special mailbox number, or landing page) don’t do it.

    FB are trying to go back to the original days of the internet with banner advertising, and counting viewer impressions. Without a click on your advertisement taking a prospective customer to a landing page of your choosing; how does a business convert that “viewer” into a paying customer; or at the very least measure ROI.

    Nice try FB — back to the spin doctors; before everyone finds out you are selling the Emperor’s new clothes.

  • http://www.lintarasilver.com Jared

    This article is very timely for me and my personal experience with FB advertising for my online silver jewellery store Lintara Silver Store.

    At first I was disappointed with the result as although we managed to build our facebook following somewhat we were still getting little conversions in terms of online sales generated by the ad.

    I was considering scrapping the campaign, which had a budget of $6.00 per day, however I was starting notice quite a dramatic rise in my offline sales. After letting in run now for a couple of more months this theory has all but been confirmed with my average take for a day selling my products at local markets has doubled from $700 per day to $1400 per day.

    There may be other contributing factors however the numbers are too strong and I’ve been selling these products at the local markets for 10 years and have never seen such a steep increase in sales over such a short period of time. I’d have to put this down to the fact that up until now our brand had no exposure whatsoever to first time customers other than our signage at the markets.

    As I targeted the facebook campaign locally and with a local reach in excess of 12000 people per week, I was accidentally creating brand recognition in our local area when I went into the campaign purely to generate online sales.

    So all in all, based on my personal experience, I will not be taking down my facebook ads anytime soon!

    Anyone else had similar experiences? If you would like to know more, contact me via our facebook page

  • http://www.livingportugalproperty.com Ronnie Portugal

    It looks like Facebook are trying to compare their adverts with the billboard, which is basically a reminder to the consumer (Keeping your brand in front of people). Of course this is proven to work and therefore, Facebook may be right in assuming that the presence of the adverts counts as much as the click.

  • http://www.domainwright.com Craig

    Now that Facebook has become a public company, we are going to see lots of new ideas coming through, and all in an effort to increase profits as they now have to answer to shareholders.
    The proof of success or failure is now measured in terms of earnings per share which is reported as and when results are posted.
    It’ll be interesting to see if this venture has any impact on the EPS.

    • http://www.ilanajandasi.com ilanajandasi

      Facebook dime doing their best to appear as a profitable company shareholders. As it should be, we’ll see in time closely follow the developments in this field. Always a step ahead of every company has the desire and willingness. More about this in other similar organizations, to adapt more quickly to innovations companies need to develop the road to take.

  • http://www.netscype.com Netscype Gino

    I spend a lot of time on Facebook. Just because all others have FB.
    For the rest i don’t need facebook, and facebook will never be an ad website for the common people nor for big business. Now FB has to work with Datalogix because FB is to stupid to collect the data from there own FB servers and do not have to steal our private details, when all is on FB. Facebook is nice but wrongly managed.

  • http://www.pilotfishseo.com Ohio SEO company

    For large brands where the FB user would easily be able to get to their website later this may be the case, but for smaller online businesses, the only way to convert the customer is with a click-through. The study doesn’t seem to differentiate among types and sizes of advertisers, which it should. Plus, if you can’t measure engagement, how can you prove it?

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