Dr. Augustine Fou is Group Chief Digital Officer of Omnicom’s Healthcare Consultancy Group. He has nearly 15 years of digital strategy consulting experience and is an expert in data mining, analytics, and consumer insights research, with specific knowledge in the consumer payments, packaged goods, food/beverage, retail/apparel, and healthcare sectors.
Dr. Fou has provided strategic counsel on the use and integration of online marketing to clients such as AT&T, IBM, Intel, ExxonMobil, MasterCard, Unilever, Pepsi, DrPepper, Frito Lay, Taco Bell. KFC. Atari, Conde Nast, Hachette Filipacchi, Victoria’s Secret, Liz Claiborne, and others. He has served as expert witness on online payments for the Federal Reserve Bank of New York, and advised government agencies such as the Norwegian Trade Counsel, the Gouvernement du Quebec, Invest in Sweden Agency, and the Canadian Consulate.
Dr. Fou is an Adjunct Professor at New York University in the Integrated Marketing Department of the School for Continuing and Professional Studies. He also writes a monthly column for ClickZ’s Experts Columns on Integrated Marketing and is a frequent speaker and panelist at online and advertising industry conferences.
He started his career with McKinsey & Company and recently served as SVP, Digital Lead at McCann/MRM Worldwide. Dr. Fou completed his PhD at MIT at the age of 23 in the Department of Materials Science and Chemical Engineering.
Recent articles by Augustine Fou
The 22 Immutable Laws of Marketing No Longer Apply, Part 3
Debunking the laws of singularity, unpredictability, success, failure, hype, acceleration, and resources. Last in a three part (3 comments) Apr 1, 2010
The 22 Immutable Laws of Marketing No Longer Apply, Part 2
Why the laws of duality, the opposite, and others no longer hold true. Second in a three-part (1 comments) Mar 4, 2010
The 22 Immutable Laws of Marketing No Longer Apply
The game has changed as the balance of power shifts away from advertisers to the very people they used to target. First in a three part (14 comments) Feb 4, 2010
10 Commandments of Modern Marketing
A list of the 10 rules every marketer should follow to meet consumer needs in (18 comments) Jan 7, 2010
What’s Wrong With the Net Promoter Score
Three reasons why the Net Promoter score is a waste of (19 comments) Nov 19, 2009
A New Definition of ‘Digital’
Defining ‘digital’ as the collection of habits and expectations of today’s consumers — and what that means to (7 comments) Sep 24, 2009
Metrics, Metrics Everywhere
Thanks to social networks and digital tools, metrics can provide relevant marketing research in real time and reveal new business (3 comments) Aug 27, 2009
Consumers Have Changed, So Should Advertisers
Five ways that consumers have irreversibly altered their expectations online and (7 comments) Jun 4, 2009
The ROI for Social Media Is Zero
If social marketing’s done right, the potential ROI could be infinite. Five tips to get you (51 comments) Apr 9, 2009
How to Use Search to Calculate the ROI of Awareness Advertising
Planning an awareness campaign in TV or other media? Advertisers can now correlate money spent on that campaign to a lift in sales — and estimate the return on (4 comments) Mar 12, 2009
Social Intensity: A New Measure for Campaign Success?
A look at two metrics that online marketers should pay attention to today. And they are not frequency and (4 comments) Feb 11, 2009
Experiential Marketing
Consumers are savvy and informed; they won’t just take your word on a product. Experiencing the product is more important than (1 comments) Dec 18, 2008
Search Improves All Marketing Aspects
Search is much more than just an opportunity for marketers to push out another Nov 20, 2008
Social Commerce: In Friends We Trust
How to integrate social networks into your marketing (1 comments) Nov 6, 2008
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Update Jan 2014
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.
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.
– visual discovery, share, and queue management interface for Netflix
– visual discovery and sampling interface for music (Amazon backend)
– create and send photo or video e-cards by drag and drop (Flickr and YouTube backend)
– visual display of your friends (closest ones have the most recent status updates)
– 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.
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.
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