Are SocialAds Less Effective Than Search?
Posted by Nick O'Neill on February 7th, 2008 1:02 PMThere has been an ongoing debate about the effectiveness of Facebook’s SocialAds. For the longest time, people have been claiming that Facebook’s ads receive a high number of views but rarely get any click-thrus as the content on Facebook is too engaging. When I was at the Web Community Forum in Seattle back in December, one of the attendees told me that her company had invested in Facebook SocialAds and while there were horrendously low click-thru rates, the number of conversions for each click was extremely high.
My friend Markus pinged me yesterday to tell me about a SocialAds experiment that he performed and the results are definitely not positive for Facebook. Let me first preface his results by saying that there was no perfect constant in this experiment so it was a slight skewed analysis but it is the most accurate one I’ve seen to date.
Markus performed a test for marketing Steven Colbert’s book. The test on Facebook targeted all individuals that listed “Colbert Report,” “Colbert,” or “the Daily Show” in their profile. Here are the statistics that Markus came up with for his Facebook ads:
• impressions: 225,875
• clicks: 178
• CTR: 0.08 %
• average CPC (cost per click): $0.22
• average CPM: $0.17
• total cost: $38.38
On his Google ads, Markus got the following results:
• impressions: 15,386
• clicks: 688
• CTR: 4.47 %
• total cost: $109.63
As is typically the result with Facebook advertisements the number of impressions are extremely high and the click-thru rate is extremely low. This should be expected with Facebook advertisements but the real comparison comes when you take a look at the number of conversions. Here are the conversion rates for Facebook and Google:
• pages per visit: 1.22
• Bounce rate: 82.84%
• average time on site: 13 sec
• 3.92 % clicked to Amazon
• 7.84 % clicked to Audible
• total conversion rate (clicked on product links): 11.76 %
• pages per visit: 1.61
• Bounce rate: 67.21%
• average time on site: 42 sec
• 12.31 % clicked to Amazon
• 9.94 % clicked to Audible
• total conversion rate (clicked on product links): 22.26 %
The conclusion is that Google in this instance had a high conversion rate. I wonder if selling education or an alternative product or service would yield similar results. This is only one example and from one person I spoke with they had extremely high conversion rates. It also depends on competition for keywords and a number of other factors. I think this is a great first study for testing the effectiveness of SocialAds but we need a few more comparisons. Have you tested out SocialAds? Send me data if you have!
February 7th, 2008 at 1:20 pm
“Are SocialAds Less Effective Than* Search?”
February 7th, 2008 at 1:48 pm
grammar police?
February 7th, 2008 at 1:58 pm
[…] O’Neill at AllFacebook just posted a really interesting comparison between Google’s AdSense and Facebook’s SocialAds based […]
February 7th, 2008 at 2:42 pm
It really makes sense that search performs much better than socialads ( overall). When people search for something, they’re actively seeking it out, either just to get information, or to buy. They’re in an entirely different mindset than when they’re on Facebook. Most people go on Facebook to stalk people, look at pictures, etc, not click ads and buy things.
Sponsored search results are useful to people who are in the buying mindset, but for many people on Facebook, even the “relevant” ads are annoying and are related to what they’re looking for–even if they may claim to be interested in it.
February 7th, 2008 at 2:49 pm
In all fairness, you should point out that the Facebook Ad clicks are priced approx one fourth of Google’s in your example. So it’s cheap. You could even try to calculate the price per conversion, and you’d see that Facebook is still cheaper than Google. I’d say that for your friend, the results are favorable for Facebook.
Anyway I wonder why everyone seems surprised by these results. Facebook (and social sites in general) has extreme amounts of page views, and opposed to searching, which is a thing you do when you know what you want, the audience isn’t particularily filled with “commercial intent” (to paraphrase Greg Linden)
I think a more interesting and useful comparison would be if you compared ads on the AdSense network with social ads. The AdSense ads are placed on sites without this commercial intent, and I guess you’d see conversions and eCPM’s more similar to Facebook’s.
February 7th, 2008 at 3:54 pm
How about the fact that a huge percentage of people on Google were looking for what they found, whereas 100% of people on Facebook were not? Apples and oranges, I think.
February 7th, 2008 at 4:18 pm
JX is exactly right. These “evaluations” of Facebook advertising are usually sloppy, do not make accurate comparisons, are based on a single creative, and are run by people with little or no online advertising experience. They are generally conducted with extremely low amounts of money and over short time periods, which doesn’t help either.
February 7th, 2008 at 4:48 pm
The obvious reason for the low CTR is becuase social network users are not performing long tail searches. Social Network advertising should be in the context of what one is DOING with EACHOTHER not what they said to eachother.
Facebooks advertising options should include the following as an example to what I said above…
-User Plays Games (identifiable by how many game apps are installed)
-User Likes Photos (identifiable by photo gallery apps and qty of photos used/viewed)
-User Likes Videos (same, but with videos)
-User Likes Moderating (identifiable by how many apps theve installed that allow you to rate and mod people)
Now, with that data, a Facebook app developer can really target their adds much better, and, have a hight CTR.
February 7th, 2008 at 5:01 pm
@JX: Facebook CPC was higher than Google’s not lower (Adwords was 16 cents, Facebook was 22 cents). FB was wildly inconsistent in how often it showed ads. I needed to increase the cost per click to get more impressions.
Plus in about 21 days Adwords received 688 clicks. Facebook only got 178 clicks over a 2 month span (even at a 22 cent average).
Also, conversion in this case only meant that they clicked out, not purchased anything.
February 7th, 2008 at 6:20 pm
Nick,
Excellent post - this is a topic that deserves more research and reporting.
When I tabulate results from a statistically significant collection of data from our own campaigns, I’ll send it your way.. should make for some interesting reporting.
February 8th, 2008 at 6:18 am
I agree with some of the guys above - I want to know what his Cost Per Acquisition worked out at, as I’m pretty sure from my rudimentary maths skills that Facebook actually works out better…
February 11th, 2008 at 10:11 am
[…] week I brought up the issue of the effectiveness of social ads. The debate rages on with Joshua Porter providing insight as to why social advertising will never […]
February 12th, 2008 at 2:27 pm
How do you track Facebook conversions if you’re not using Beacon?