Do Facebook ads work? Study has surprising results

Screens outside the Grauman's Chinese Theatre on Hollywood Blvd. advertise for people to "Become a Fan" of the Theatre on Facebook at the Los Angeles premiere of the film "What to Expect When You're Expecting," Monday, May 14, 2012, in Los Angeles.
AP Photo/Danny Moloshok
Screenshot of Facebook advertising

(CNET) Amid all of the controversy surrounding General Motors' decision to take its ads off of Facebook, one would think that, at some point, some good news would come the social network's way. If that's happening, it isn't today.

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A U.K.-based digital-marketing agency, Greenlight, today released the results of a survey (PDF) it conducted with 500 people related to the value they find in Facebook advertising. According to the firm, 44 percent of respondents said that they "never" click on an advertisement or sponsored listing in the social network. Another 31 percent of respondents said that they "rarely" click on ads. Just 13 percent of those surveyed said that they either "often" or "regularly" click on the ads.

The study is well-timed if nothing else. Earlier this week, The Wall Street Journal reported that GM has decided to pull $10 million in paid advertising from Facebook after finding that they weren't as effective as the company had hoped. Instead, GM will focus its efforts on promoting its brand through free means.

Soon after, the critics came out against GM, with one source telling CNET that Facebook had "advised [GM] to invest more wisely in a campaign that would reach more people," but the company didn't listen.

GM's troubles might also have had something to do with its business model. According to Greenlight, retail companies are most likely to see clickthrough with their Facebook ads. However, a so-called "positive" clickthrough rate on Facebook is just 0.5 percent to 0.8 percent.

So, what might be more worthwhile for marketers to consider on Facebook? According to Greenlight, Facebook's Sponsored Stories deliver increased clickthrough rates, and a lower cost per sale.

This article originally appeared at CNET under the headline "Study: You're not clicking on Facebook ads - and you never will."

  • Don Reisinger

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