Advertisers Weigh In On The Value Of Facebook Ads

Three days before Facebook’s May 18 IPO, Government Motors kicked off a mini-firestorm by announcing their cancellation of $10 million worth of paid Facebook advertising.

Next day, rival Ford, which has had great success with paid Facebook ads, chimed in, saying that the problem wasn’t with the medium, but with GM’s use of it.

Now, just in time for the $100 billion IPO, other national advertisers are weighing in, and the votes, while mostly in favor of Facebook advertising, are somewhat short of unanimous.

“GM’s move puts it very much in the minority,” Ad Age reports. “Most brands with big presences on Facebook are also spending significantly on advertising. But it’s clear that Facebook still faces steep hurdles in getting marketers to increase their investment to grow the $3.15 billion they spent on the network in 2012.”

Hurdles

One problem some advertisers have with Facebook advertisiing is unfamiliarity. “[I]t is not a traditional ad play,” writes Ad Age, “which makes it complicated for brands accustomed to one-to-many ad campaigns.”

“I think brands are still trying to get their arms around what Facebook means to them,” says Chris Copeland, CEO of WPP’s GroupM Next. “Is it a click play? Is it an exposure or impression play? Will it be measured in digital GRPs?” he asks. “There are still a lot of unknowns.”

(GRPs, incidentally, are Gross Rating Points, an index of ad exposure; a 100 GRP buy exposes your message to every member of the medium’s audience an average of once.)

Kantar Media measures different online platforms’ ad effectiveness — defined as users’ clicking on an ad, visiting a brand page or going to more brand content — for the automotive, travel, technology and retail categories. Facebook, they find, is less effective than Google, currently tied with AOL and more effective than Yahoo and MSN. Over the year ending April, 2012, their effectiveness ranged from 14.2% in October, 2011, to 22.2 and 22.3% in January and March of this year.

“[I]t’s ultimately up to advertisers to understand how to optimize this platform for your customers,” Samsung Mobile VP-strategic marketing Brian Wallace notes, but lack of data impedes that understanding. “”They keep their data too close. This is the only thing preventing me from investing more in their platform,” he complains.

Acting on the principle that the best new customer is a satisfied current customer, GNC is putting its Facebook dollars into fan page content, which they’ll use e-mail, direct mail and television ads to drive traffic to. CMO Jeff Hennion believes “we have a substantial number of customers out there who are interested in GNC and what we have to say. If we tell all those people who are already customers, it’s a lot cheaper to do that, and the ROI is a lot better than buying ads on Facebook that are targeted at our followers’ friends.”

Of course, nutritional supplements make up much more of a niche category than, say, cars or travel, so what works for GNC may fail for advertisers with broader customer bases.

Smartphone manufacturer HTC’s VP-marketing, Greg Fisher, doubts that Facebook works for traditional brand-building. In his view, Facebook ads need a clear message, a promotion and a call to action to be effective.

A clear message, by the way, was one thing GM’s Facebook ad failures clearly lacked.

It’s all in how you use it

“Most major consumer marketers are spending both on Facebook [content] as well as Facebook advertising,” Ad Age reports.

Lack of data notwithstanding, Samsung Mobile invests one-third of its Facebook budget in paid advertising.

Procter & Gamble’s Secret deodorant used paid Facebook advertising to launch its anti-bullying “Mean Stinks” campaign in February.  “We have used Facebook ads in support of Secret’s ‘Mean Stinks,’ both at launch and various times throughout the length of the campaign,” a spokeswoman e-mailed. “The ads are just one of a number of elements contributing to the program’s overall success.”

Ford’s accelerating its Facebook advertising. So is Kia, which buys premium and marketplace Facebook ads not just to amass clicks, gain fans and distribute content, but also to build awareness and get into potential customers’ minds.

For Nissan, on the other hand, Facebook advertising is stop-and-go. According to Erich Marx, director of interactive marketing and social media, the brand buys paid media around new-car launches but puts the “vast majority” of its Facebook spending into content, not ads.

You, the jury

Whether you’re a huge national advertiser like P&G or a small, local Richmond brand, the results you get from Facebook advertising — like advertising on WRVA, Channel 6, or in the Times Disptach — depend on what kind of thought you put into it.

“I would argue Facebook as a platform is changing the way marketers think about advertising,” declares Michael Hayes, president of digital at agency Initiative, but “[i]f you’re going to evaluate Facebook on very strict standard digital metrics, you might not be impressed, and that would lead to a [wrong] decision to cut the advertising.”

“Blaming Facebook for a lack of ROI on your advertising is akin to blaming the [I]nternet because no one purchased from your website,” says Samsung Mobile’s Brian Wallace.

“We believe in Facebook, thinking it has tremendous potential for carrying our brands’ messages to our fans and friends of fans,” an Anheuser-Busch InBev spokesman stated. “But as with any element of our media mix, ultimately it must demonstrate the value it brings and how it impacts our brand health and sales.”

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