A recent study conducted by AdAge along with Citigroup may have given the answers that advertisers know to be true but it is not likely the type of information that Facebook may want to hear about its advertising platform.
The study revealed that most marketers are doing Facebook ads for brand awareness and building sentiment for their brand. So is this a bad thing? Well, not if you are a major brand with deep pockets and can afford to give the fall back position of “We are branding” as why you advertise on Facebook. When it is being found that lead gen and other hard performance indicators aren’t so great you say “We need to be in front of these people even if they are not clicking through”.
Trouble is that smaller advertisers they usually don’t have that luxury. So what did this survey actually say?
Only about 1/3 of the respondents were hot to somewhat lukewarm about Facebook campaigns as lead generators. This is what the SMB practically requires to be the top of the list no matter how unrealistic that goal actually is for most advertising.
Facebook can likely do fine if they were to become the advertising vehicle of choice for larger brands. But as with most social media players there is the realization that the SMB’s of the world can be the difference between good ad revenue and tremendous ad revenue.
For every McDonald’s or huge retailer that drops 6 to seven figure campaigns inside of Facebook there are literally millions of potential smaller businesses that would drop $500 if they could only feel that their investment wasn’t going into the Facebook ether and never to be tied to revenue.
There is likely to be some pent up demand in the SMB space with regard to advertising. the main reason is because most can’t afford to experiment much. The economy is still extremely shaky and every dollar counts. They are more hard pressed to feel good about their money going toward a branding effort that is not nearly as definable as an action that leads to real people spending real money with them.
So is this a real problem for Facebook? If they have difficulty getting to large numbers of smaller advertisers because the bottom line performance of those ads is not there then yes. It will limit Facebook’s ability to scale its ad business and that ad business is how the IPO was sold.
What about you? What is your experience with Facebook ads? If you are not some major brand with an endless budget to throw at brand awareness efforts what can you then do you need to see from performance of Facebook ads? In a world of inbound marketing thinking is it worth investing in something that might end up being a revenue generation strike out?