Facebook Ads Work, Claims Research

Marketing on Facebook works, and leads to increased purchases, claims a report made in collaboration between the social network and business analytics company comScore, released on Tuesday.

“The Power of Like 2: How Social Marketing Works” examines the ways in which brands can quantify the paid and earned effects of their social marketing programs on Facebook.

Last month, General Motors announced it would stop using the social network for advertisements, after deciding they had little impact on consumers.

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The report studies the behaviour of Facebook “fans” and their “friends”, based on the experiences of large corporations, such as Amazon or Starbucks. It attempts to establish a framework for quantifying large brand marketing programs, in response to those doubting the value of social network advertising.

“It is not a sure thing. It sure looks likely that it will be one of the most important ad-supported media properties, but it’s not certain because there will be marketers who are challenged to prove the effectiveness of the marketing vehicle,” said Brian Wieser, Internet and media analyst at Pivotal Research Group, in May.

A recent Reuters/Ipsos poll showed four out of five Facebook users haven’t bought a product or service as a result of advertising or comments on the website.

The report by comScore claims Brand Pages now routinely outpace their corresponding brand websites in terms of audience. For example, the Skittles brand website attracted 23,000 unique US visitors in March 2012, while the Skittles Brand Page on Facebook attracted 320,000 visitors.

However, comScore argues that most brand exposure on Facebook occurs through users’ news feeds, rather than visits to dedicated brand pages.

To test this idea, Facebook and comScore studied two groups. One group, made up of “fans” of US retailer Target and their “friends”, saw updates about Target that run in users’ news feeds. The second group was made up of Facebook users who weren’t “fans” of Target and saw no messages. Both groups had identical purchase behaviour at Target prior to the study.

According to comScore, after four weeks, the “fans” who saw the messages were 19 percent more likely to buy goods at Target than the group that didn’t see the messages. More importantly, their “friends” were 27 percent more likely to visit the shops in question.

To measure the impact of paid advertising, comScore conducted a similar study. It looked at groups of Facebook users who were exposed to a paid online Facebook campaign, and a test group that was not.

Analytics company claims that by the fourth week of the study, the group that saw the advertising messages was 16 percent more likely to buy goods at the retailer than the group that did not.

Facebook also conducted its own research, and it says that about 70 percent of campaigns showed a return of three times or more on the money spent for the advertising, and about half of campaigns showed a return of five times or better.

Facebook’s shares closed at $27.4 on Tuesday, 28 percent below their offering price of $38 on May 18 IPO.

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