The following is an excerpt from Alexei Oreskovic | October 1, 2012 | Reuters.com |
(Reuters) – Facebook Inc, stung by doubts that advertising on the social network delivers enough bang for the buck, is preparing to unveil data to counter its critics and show that “clicks,” the current metric of choice, tell only half the story.
The world’s No. 1 social network, embarrassed just days before its IPO when General Motors declared it was pulling the plug on all paid advertising on its network, will argue that big-brand marketers should abandon the industry’s obsession with numbers of clicks and focus on more effective advertising techniques.
Fewer than 1 percent of in-store sales tied to brand advertising campaigns on Facebook come from people who clicked on an ad, according to a new study that Facebook has conducted through a partnership with Datalogix, a data mining firm that tracks real world retail sales.
“We ended up in this world where the click is king,” said Brad Smallwood, Facebook’s head of measurement and insights, who will present some of Facebook’s findings at one of the advertising industry’s biggest conferences in New York on Monday.
While designing online ads to garner clicks makes sense for certain type of companies – such as e-commerce firms trying to ring-up immediate online sales – clicks are not relevant to brand marketers, Smallwood said.
Through its partnership with Datalogix, Facebook says it can now give brand marketers data on the actual in-store sales that their ad campaigns on Facebook have generated – a more useful piece of feedback than total clicks. Datalogix tracks the relationship between ads on Facebook and real-world spending by compiling consumer purchasing information from retail stores and matching it with data about Facebook ad impressions.
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