Facebook: Clicks don't matter as much as advertisers think
This story originally appeared on CBSNews.com's sister site, CNET.com
Facebook, under pressure to show its power as an advertising medium, is urging advertisers to consider the bigger picture instead of measuring success with the number of clicks an ad gets.
The company says that a majority of sales come from people who see, but don't necessarily click on, online ads that promote campaigns, according to a study done in partnership with Datalogix, which compiles consumer purchasing data from retail stores.
Brad Smallwood, Facebook's head of measurement and insights, talked about the study -- which analyzed nearly 50 digital campaigns -- today at an advertising conference in New York. Facebook listed some of those findings in a blog post today.
People who saw Facebook ads but didn't click on them contributed to 99 percent of sales, according to the blog. Facebook said this is proof that making sure the marketing message is sent to the right customer is more important than clicks.
The other findings sound like common sense: Sales increase if you put your ad in front of more people, which, as Facebook pointed out, is the way advertisers measure effectiveness on TV. Facebook said that many marketers didn't trust that this held true for online ads, but its study proves otherwise: ad campaigns that maximized its reach had on average a 70 percent higher return-on-investment.
Additionally, Facebook said marketers should figure out the "sweetspot" for how frequently ads are placed, which transitioned nicely into a plug for DataLogix: "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."
Facebook's decision to partner with DataLogix last week stirred up some privacy concerns. Datalogix matches e-mail addresses and other consumer information associated with retailers' loyalty programs against e-mail addresses and other identifying information people used to establish their Facebook accounts.
In response to rising concerns, Facebook posted today about how the information is secret since DataLogix aggregates it into groups of people who saw the ads and those who did not.
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