Tuesday, October 2, 2012

Facebook Inc (NASDAQ:FB) Survey: Click-throughs on ads do not translate into sales

Click-throughs on online advertisements are meaningless, a survey done on Facebook has found.

In a survey done jointly with Datalogix, Facebook Inc(NASDAQ:FB) found that about 99 percent of sales generated from online branding ad campaigns were from people who saw but did not interact with the ads, according to blog post it made on the survey.

The social network's contention is that it is the impression that the ads make on the people that translate into sales and not necessarily the click-throughs.

The finding is “proof that it is the delivery of the marketing message to the right consumer, not the click, that creates real value for brand advertisers,” the company said.

This places online ads on par with traditional ads, either on television or in print, where interaction with the ads is non-existent but the ads have the capability to leave a powerful impression on the viewers.

Facebook's head of measurement and insights, Brad Smallwood, talked about the findings of the survey at a conference on advertising in New York.

According to the survey, brand campaigns that maximized reach had, on average, 70 percent higher return on investment. Those that reallocated high frequency impressions to folks seeing too few impressions would notice a 40 percent uptick in return on investment, Facebook and Datalogix found. 

Smallwood said that "online marketers who maximize the reach of and nail down the right frequency for their messages will significantly improve their return on investment."

Venture Beat commented that "the findings are extremely favourable for Facebook, which is often criticized for low click-through rates."

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