Posted April 20, 2010 8:16 am by with 3 comments

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Buying ads on Facebook works!

According to Facebook.

OK, so the social network asked Nielsen to conduct the study, but I can’t help be somewhat skeptical of the results.

Me? Skeptical? Who knew?

The study looked at the brand recall of 800k Facebook users and ads from 14 different brands across a range of categories. The conclusion appears to be that Facebook ads can help increase brand awareness and recall, when combined with naturally occurring endorsements:

Facebook-home-page ads on average generated a 10% increase in ad recall, a 4% increase in brand awareness and a 2% increase in purchase intent..the increase in recall jumped to 16% when ads included mentions of friends who were brand fans, and 30% when the ads coincided with a similar mention in users’ news feeds.

Brand awareness saw similar bumps: up 2% from just a home-page ad, 8% with a “social ad” bearing mentions of friends who were brand fans and up 13% when a home-page ad appeared along with a mention of friends who were brand fans in the users’ news feeds.

Yay for advertising!

Well, don’t be too quick to take these results at face value. After all, it’s kind of like Google saying AdWords ads are more effective when you are already #1 in the organic results. Erm, isn’t most of the heavy-lifting being done by the organic listing?

It seems Nielsen’s own study suggests this may be in play for Facebook ads:

Of the 18 million users exposed to the ads, only around 130,000, or less than 1%, “engaged” with them by clicking on them. But around 40,000 [of a group of 1 million], or around 4%, of users who saw organic mentions of their friends become brand fans clicked on those news items.

In other words, those that only saw the organic were 4 times more engaged than those that only saw the ads. Doesn’t that mean we should spend our money on social media marketing–building communities, engaging customers, etc–as opposed to just simply throwing money at Faceless Facebook ads?

  • It seems clear that unprompted endorsements from friends are much more likely to motivate action. Facebook’s business model depends on them displaying an increasing volume of ads so you can count on the user experience to gradually decline in coming years.
    .-= Lateef´s last blog ..golateef: RT @deckerton: Why @siliconprairie @bigomaha & @oxidedesign make it easier to start a business in Nebraska: =-.

  • It’s obvious that non-paid sources of marketing like PR and endorsements are a far more powerful when compared impression for impression.

    However, it appears to me that your asking “which form of marketing delivers the quickest hit or the biggest bang-for-buck”. People always have their preference on this but I haven’t seen too many non-biased studies on this yet.
    .-= Wynne´s last blog ..Are You Using Effective Call to Actions On Your Website? =-.

  • I wonder what all these percent increases were measured against. Say a million people recalled a brand 100 times and with ads recalled 102 times, that’s a 2% increase, but it’s still worthless.

    Either way, don’t discount Facebook as an advertising medium, because its influence keeps growing and its platform keeps improving, as can be evidenced by the announcement of the cross-site rating (liking) feature.
    .-= Get Business Online´s last blog ..Protect Your Email Address =-.