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Bottled Water Infographic
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Not 1, Not 2, Not 3, But 4 Display Ads Per Pageview – Shame on You Facebook
Updated May 12, 2012. Freddy Nager, Prof of Integrated Marketing at UCLA sent me a screen shot showing 9 display ads per page. The unscupulosity of Facebook is at an all time high – right up to their IPO.
THANKS Freddy Nager @AtomicTango, Prof of Integrated Marketing, UCLA for the screen grab of 9 and 10 ads per page.
http://atomictango.com/2012/04/20/myspace-facebook-continued/
Updated February 3, 2012. This is how Facebook is growing ad revenues – SEVEN DISPLAY ADS PER PAGE – EVIL!
But despite this kind of “cheating” their revenues are decelerating. And there is the “danger” of advertisers getting smart and changing from paying on a CPM basis to paying only on a CPC basis — paying only when they get the click. That would mean Facebook’s revenue could drop off a cliff.
Source: http://www.businessinsider.com/chart-of-the-day-facebook-revenues-are-decelerating-2012-2
Updated: FIVE (count ‘em) 5 ads per page – SHAME on you Facebook – the highway robbery gets worse. Advertisers, quick, go to CPC (don’t pay CPMs any more).
Multiple ads on the same page run up the impression numbers, but artificially depress click-throughs because even if they wanted to, users can only click on one ad at a time. Shame on your Facebook for overtly and systematically robbing advertisers who pay on a CPM basis.
But then again shame on you advertisers who still pay CPMs when you can easily click a radio button to select CPC — Facebook even suggests a range for you automatically (see inset below).
What is the advantage of paying by CPC (cost per click) instead of CPM (cost per thousand impressions)? Well, remember the old ad industry joke “I know I am wasting half my ad dollars, I just don’t know which half” — well, now you know. In fact, you now know you are wasting 99% of your ad dollars to wasted impressions that get no action/clicks from users AND you know which 99%. See infographic below. So stop paying CPMs and start paying CPCs TODAY. Your ad budget will thank you!
Just how DISMAL are Facebook advertising metrics and benchmarks (click to see )?
According to data from comScore, in Q3 2010, Facebook served 297 billion display ad impressions giving it 23% of the U.S. market for display ads. In digital channels, since there is no longer the physical limitation of time (airtime on TV) or space (area to put ads on dead-tree pulp) companies can create “inventory” out of thin air and magically increase revenue on the backs of advertisers still willing to pay for impressions. I guess it really is caveat emptor.
The Perfect Babe – Megan Fox (pics)
Megan Fox – The Perfect Babe Product Placement
No, this post is not about Megan Fox. Well, yeah it is. But it’s about the MARKETING of Megan Fox.
Megan Fox has been around in films and TV since 2001 (see filmography below). But it wasn’t until 2007 when she starred in the first Transformers movie that she burst on the scene and became an overnight mega celebrity, especially online (see Google Search Volume chart). If you look at Ford’s search volume during the same period, there was NO lift in search that was detectable — there probably was some lift, but it is simply not detectable.
So Megan Fox went from very very little awareness to not only massive awareness, but also massive demand — people remembered her name and even took action (performed searches on her name). If some product placements would have had only 10% of the success of the “megan fox” product placement, they might actually justify the immense cost a bit better (millions of dollars paid by the advertiser to the movie makers to place products into the storyline of the movie).
And why is she “perfect,” in the marketing sense, of course? Her search volume has not only sustained but also continued to grow. She was not a flash in the pan that went away after the advertising/media dollars stopped or the public interest died off (see the snuggie and etrade search volume charts below).
transformer girl, second girl in transformers, other girl in transformers – Isabel Lucas
Facebook advertising metrics and benchmarks
Summary
Facebook click-through rates of 0.01 – 0.05% (Facebook CTRs)
Facebook effective CPMs turned out to be $0.01 – $0.19 (Facebook eCPMs)
Facebook average CPCs ranged from $0.05 – $0.25 (Facebook CPCs)
Other social media benchmarks from my experiments (Adwords, StumbleUpon, PayPerPost / Izea) can be found here.
Comparison of click-through rates for search ads versus display ads
As a scientist, I like to run experiments. And I like to make stuff. So my team and I made a few Facebook apps that solved needs that we had (a few samples listed below) and shared them publicly on Facebook to see if they were also useful to other people too.
I beta tested some apps with a few friends by inviting them directly. Then to get it out to a larger number of people, we decided to try Facebook advertising, the much-hyped, holy grail of display advertising on one of the largest and most active social networks.
http://apps.facebook.com/netflixr/
- visual discovery, share, and queue management interface for Netflix
http://apps.facebook.com/musicsamplr/
- visual discovery and sampling interface for music (Amazon backend)
http://apps.facebook.com/phreetings/
- create and send photo or video e-cards by drag and drop (Flickr and YouTube backend)
http://apps.facebook.com/visualfriends/
- visual display of your friends (closest ones have the most recent status updates)
http://apps.facebook.com/myfavethings/
- social commerce – I’ll buy what he bought; things I have, things I want
But what I found was eye-opening to say the least. Despite the potential of social ads where the social actions of your circle of friends could make the ads more targeted, none of the anticipated positive effects were observed. Despite the promise of mass reach, there was not the corresponding attention or clicks. And despite the use of demographics-based targeting, there was no statistically significant difference between different targets nor the control sample, running during the same time period.
What we saw were click-through rates of 0.01 – 0.05% — and the 0.01% often seemed like rounding because they did not report more than 2 decimal places. As a result of these click rates the effective CPMs turned out to be $0.01 – $0.19 and average CPCs ranged from $0.05 – $0.25. I’ve been running these Facebook ads for more than 12 months; and millions of impresisons later, there is no observable improvements to CTRs and thus CPMs and CPCs. But since I set up the campaigns to only pay when there is a click (CPC basis), I can let these run indefinitely because I am getting so few clicks, it’s not even making a dent on my credit card (which I use to pay for the ads).
detail of low click through rates of facebook display ads
Ideas for Facebook
In the spirit of openness, as an advertiser who wants to continue using Facebook advertising, perhaps there are a few things they can do to improve the effectiveness of Facebook display ads.
1. reduce the number of ads per page to 1 – displaying multiple ads artificially depresses click-through rates because users can only click on 1 thing at a time, even if they liked more than one of them. Displaying 3 on a page simply increases the denominator while the numerator does not increase — in the click-through rate equation: clicks / impressions.
2. make ads sharable – in the rare instance a user views an ad, it may or may not be relevant to her, but she may know that it is relevant and timely for a friend. By making ads sharable, she can click and send to a friend, who is very likely to find it useful and valuable, especially having been sent by a friend.
3. let users opt-in to ads in specific topic categories - when users are in the market for specific things, they are more likely to subscribe to pertinent news feeds, offers, etc. related to that topic or category. By giving users more power over what they want to see, it will also give advertisers more targeted and engaged prospects to target.
4. expand search-based advertising – when users search they are looking for something and are open to discovering something they didn’t know to ask for. So ads served up in response to a search is usually a lot more effective than ads served up simply when a page is loaded (display advertising). Facebook can serve display ads based on pertinent search queries.
Earth to Facebook… anyone listening?
By Dr. Augustine Fou. Dr. Fou is Group Chief Digital Officer at Healthcare Consultancy Group a group of agencies within the Omnicom family specializing in pharma and healthcare. He helps clients develop digital marketing programs or improve the efficiency and cost-effectiveness existing campaigns via advanced analytics, social marketing, and digital strategy. You can read more of his writing on digital marketing on this blog and follow him on twitter @acfou.
Revision 6/30/2009: Facebook Click Fraud
Excerpt from TechCrunch: “Click fraud is serious business on the big search engine advertising networks because the bad guys can make serious money. Sign up for an Adsense account and put those ads on parked domain names or wherever. Then all you have to do is start clicking those ads like crazy, using bots or cheap labor.” On Facebook, “advertisers are clicking on competitor ads to drive up their costs and drive down their ROI.”
“So the bad guys just create thousands of fake Facebook accounts with a wide variety of demographic information. This sounds like a lot of work, but it’s highly automated. the going rate was just $10 per 100 accounts if you supply the unique email accounts. Once the accounts are created, they use software to fill out the varied demographic information, and that software also manages all these accounts. The fraudster then logs in to Facebook via these accounts and views the ads that are displayed. The right competitive ads come up and Bingo, the software then clicks them. Facebook rules allow an account to click any advertisement up to six times in a 24 hour period, and all those clicks are charged. All you need is a few accounts to view the ads and then click to the max.”
http://www.techcrunch.com/2009/06/26/facebook-click-fraud-101/
http://www.techcrunch.com/2009/06/21/facebook-admit-click-fraud-problem-says-fix-coming-today/
Despite click fraud, the click through rates are still incredibly low. So if you subtract all the click fraud, is ANY advertiser making ANY money from facebook advertising?
Others have found similarly dismal click through rates from Facebook advertising
Source: http://www.friendswithbenefitsbook.com/2008/04/07/facebook-ad-click-through-rates-are-really-pitiful/
Facebook Ad Click-Through Rates Are Really Pitiful
April 7, 2008 – 5:03 pm
Quite by coincidence, I’ve encountered a few statistics on Facebook’s advertising platform. I thought I’d post links to the results I’ve uncovered, in case anybody is wondering about average CTR rates for Facebook.
First up, Rod Boothby got a click-through rate of 0.01%:
This week, I ran $105 worth of Facebook Fliers. That bought me 52,500 impressions. It looks like the flier bought me about an extra 500 site visits. That’s about $0.21 per hit.
Michael Ferguson ran a bunch of Facebook ads for Kinzin:
Click-through rates are abysmal. I was running the identical ad in about 15 different regions (you need to run them as separate ads to get the stats broken out), getting just over 10M views. Our average clickthrough rate was 0.06% (that’s 1 in 1513, for those counting at home). The best we did anywhere was 0.14%.
He later reports that the conversion rate was “at a pretty reasonable clip” at about 5%. By ‘conversion’, I think he’s meaning people who actually signed up for Kinzin’s free service. All of this stuff is contextual, but if visitors had to lay down money, the conversion rate would be considerably lower.
The folks at Valleywag report similarly dismal numbers:
Media buyers — the agency people who book campaigns — report that the college social network is a truly terrible target. They’re mainly students, with low disposable income, of course; but, beyond that, the users appear to be too busy leaving messages for eachother to show much interest in advertising. Facebook’s members appear indifferent even to movie advertising aimed at their demographic. Clickthrough rates, the percentage of time users click on an ad, average 0.04% — just 400 clicks in every 1m views — according to one report seen by Valleywag.
From AllFacebook:
Fred Wilson has been updating the world about his venture in Facebook advertising over the past week. Today, Fred posted and updated screenshot of his ad campaign’s performance and it doesn’t appear to be too stellar. For one of his campaigns, out of 10,080 impressions there were only 8 clicks. The average cost-per-click for Fred was $0.08 and the average CPM was $0.06. This is a less than stellar performance. This is nothing new though.
And lastly, from a digital student marketing blog in the UK. This would seem like a natural fit for Facebook’s audience:
Our most recent campaign saw 1.4 million page impressions delivered at specific universities – and only a 0.04% clickthrough rate. Ouch.
Click-through rates seem to sit around 0.04%, which is profoundly lame if you ask me. I’m no online advertising expert–it’s not really our thing–but I’ve run a bunch of Google AdWords and other contextual advertising campaigns. We regularly get click-through rates of 3%, and I gather that’s nothing special.
Here’s my theory on Facebook: it’s a silo. People visit the Fun House of Facebook, and conceptually treat it slightly different than the rest of the web. They’re in Facebook, interacting with friends, playing games, sending messages and now chatting on IM. As such, they’re really unmotivated to leave. Who wants to leave the Fun House?
We’ve seen similar results across Facebook. It’s really difficult to drive visitors out of the app and to your own website.
Microsoft Kumo vs Wolfram Alpha – FIGHT!
Microsoft should take a page from the launch of Wolfram’s Alpha using social channels.
Wolfram Alpha – 1.6 million google search results
Microsoft Kumo – 624k google search results
www.WolframAlpha.com is launched, but Microsoft Kumo.com is not even launched. So there is NO benefit from all the news coverage.
Search intensity and volume indicates interest of users — Wolfram Alpha is kicking Microsoft butt.
http://bits.blogs.nytimes.com/2009/04/28/wolfram-alpha-veil-lifted/
http://gizmodo.com/5240514/wolfram-alpha-and-google-tested-head+to+head
http://gizmodo.com/5236115/wolfram-alpha-search-engine-on-video
trends – coupon sites, network TV sites
coupon sites: definitely headed upward with a spike in Dec 08.
network TV sites are seeing healthy increases, likely due to “view full episodes” on their websites – but even this increase in traffic will not replace the advertising revenues lost on network television
the overall advertising pie will shrink
the greater efficiencies of “digital” mean that the same amount of “advertising” can be achieved with fewer dollars because more waste can be eliminated. The decreases in ad spending in traditional media channels like newspapers will only be partially replaced by ad spending online.
For example, the dollars that used to fund newspaper classified advertising has been replaced by free online classifieds through Craigslist. While newspapers had incremental costs due to materials, printing, labor, and distribution, online classifieds have virtually no incremental cost.
Similarly print advertising, which was based on targeting ads to specific demographics of readerships are being replaced by online ads which can be more finely targeted to even more niche readerships — e.g. contextual advertising. And the revenue models based around cost per click are inherently more efficient (and thus lower cost) than the impression-based revenue models of magazines. Again for every dollar taken out of print advertising, only a few cents are needed to replace it in “digital.”
Agree with me or tell me I’m stupid @acfou
so, you think you’re viral? here’s how to find out…
1. post your “viral” video, banner ad, etc.
2. tweet about it
3. see if any one of your followers re-tweets it
4. check twitt(url)y to see “twitter intensity” around you asset
this is a quick way to tell if what you think is viral is viral. If even your own circle of followers don’t retweet it, it probably isn’t viral. What you think is cool may actually not be that cool. And sticking it on YouTube and supporting it with a lot of paid media, doesn’t make it viral!
Agree with me? Or tell me I’m stupid @acfou
using twitter intensity to determine if something is viral (or not).
About Me
Dr. Augustine Fou is an advisor on digital strategy and social media marketing, with over 16 years of in-the-trenches, hands-on experience. He provides client executives with objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI with digital insights.
http://twitter.com/acfou
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Prototype Web Services
- drag2share – quickly share news items by drag and drop on email addresses
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- WebTeleprompter – just what it says it is
