Facebook Advertising Doesn’t Work: How To Turn Engagement Into Revenue

Facebook Advertising

Vanity marketing has had its day. Organisations can no longer afford to spend money on social media campaigns that deliver no quantifiable return. It is time for Facebook to justify its $80bn valuation and for social marketers to demonstrate something more tangible than nebulous brand recognition figures.

The problem is that social campaigns don’t generate sales. Consumers rarely click on Facebook ads – perhaps then even only by mistake. So how can brands exploit this rich platform of one billion regularly returning users and deep behavioural insight to turn engagement into revenue?

Social Myth

Facebook advertising doesn’t work. Well, to be fair, the $5 billion advertising revenue generated in 2012 would suggest it works for Facebook. But are there any companies out there that can actually demonstrate a return on investment from the Facebook, or any other social media investment?

Likes, Followers and Retweets may look good but they don’t add to the bottom line. In reality, raising profile without adding revenue further undermines the reputation and perceived value of social marketing. Why else would GM pull a $10m annual Facebook advertising budget? Tried it; tried it again. Failed.

So what’s the solution? Pull out of social media altogether? Drastic. More reasonably, brands need to recognise that social environments like Facebook and Twitter are an escape from the Internet: users don’t want to be advertised to; they don’t want to be bombarded with sponsored messages or display ads.

Companies need to find a way to sell on the Facebook platform, not just use Facebook as yet one more way to drive traffic to the corporate website. Interrupting the social experience in this way does not work. So how can a brand recreate a sales experience within Facebook that adds to, rather than undermines the user’s social experience?

Marketing Challenge

To be fair, there are some brands that just get it. Brands such as Red Bull and Innocent are extremely savvy, creating Facebook specific content and offers that have built strong brand recognition. Yet so many others, from Amazon onwards, simply don’t get it. Amazon uses Facebook as little more than an online jumble sale; using it to offload unwanted stock at a massive discount. It generates sales but does nothing to improve the perception of either organisation or truly exploit the value of the Facebook population.

These very different strategies reveal just how Facebook, and other social media, continue to confound the best marketing brains. Social media delivers unprecedented access to consumers; offers fantastic opportunities for behavioural targeting to reflect age, sex, school, work and interests; and provides an immediacy of response via sharing that could – and should – generate new leads.

Indeed, despite their clear resistance to advertising, Facebook users are not brand unaware. They ‘Like’ pages; they share content with friends. They just don’t want to be taken outside Facebook to a product or brand web site. The challenge is to gain their notice and trust within the Facebook environment; to build a bridge between the corporate fan page and the online shop.

Intuitive Experience

It has to be simple. As easy to use, as intuitive and non-intrusive as the familiar Facebook experience; a pull base approach that enables the consumer to make the choice. Not, take note Target, a convoluted model that demands users browse collections, make choices, drive to a physical store, then pull up the items on the mobile and hit redeem in store!

Creating a direct link with a sales person can be far simpler. Whilst a growing number of retailers and brands are now adding live web-chat, the return is far from compelling. Instead, the logical extension to this is to introduce a visual element, so that consumers can put a face to the live agents. Why not go one step further and extend the offering beyond the web store and embed such functionality within Facebook?

Taking this approach provides consumers with the choice of direct interaction with the brand from within the Facebook experience. Not only does this pull model put the control in the hands of the consumer, but since having an interaction with a video agent is similar to messaging a friend, the approach is sympathetic to the social experience.

Add to this the real time feedback – with typically 50% of customers completing the satisfaction survey – and real time sharing, and companies have a simple way to not only monetize Facebook but also achieve significant lead generation.

Conclusion

Social media marketing is no longer new. These models should be tried and tested. So just how long can organisations seriously put money into social and fail to measure? How long will management accept nebulous brand engagement figures, from returning visitors to average time spent? Just how much longer will the social myth be accepted?

Facebook needs to work – on many levels. $5bn in advertising revenue is impressive – but not in the context of a platform with one billion regularly returning users; or a company now valued at $80bn. The numbers do not stack up. But Facebook also needs to work for the brands that have invested heavily for little return to date; and it needs to work soon, before the current generation of mobile using teens get so fed up with being bombarded with ads on a small screen that they switch off altogether.

Right now, no matter how cool the design, the Facebook fan page is a one dimensional tool. Great promotion, fun copy, pretty pictures – but no quantifiable value. By integrating live video based call-back, brands can create a Facebook sales channel and use Facebook to drive real, measurable traffic to the company’s sales team. It is only by generating sales and contributing to the bottom line that marketers can finally prove there is more to social than vanity.

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Jon Smith

Jon Smith, VP Marketing and Product Development at Whisbi, has over 14 years experience in on- and offline marketing. Previously Jon Smith was part of the start-up team for Amazon.com Europe, where he launched the DVD and video verticals in the UK market. He was also director of development at Kitbag.com and has served as managing director of Inpress, Toytopia, Espressio and Convert247. The best-selling author of 12 books, including Get Into Bed With Google, Smarter Business Start-Ups, Grow your business with Google Adwords and Dominate Your Market With Twitter, Jon’s remit at Whisbi currently covers product development, on and offline lead-generation, client, partner and media relations, the operation and localisation of the company’s websites and mobile presence, social media, PR, branding and marketing communications.