Arif Durrani: Facebook ads still have much to prove

After 21 pages, comScore’s ‘The Power of Like: How Social Marketing Works’ study provides just one lonely example of the positive impact of a paid advertising campaign running on Facebook. And it gets worse.

Despite the study itself being imbued with credibility by the presence of five major brands on its front cover – Amazon, Best Buy, Starbucks, Skittles and Target - the happy recipient of the one successful paid-for marketing campaign remains, to this day, anonymous. And the campaign itself was commissioned by Facebook... which also happens to be a paid-up client of comScore.

It’s all a bit unsatisfactory, not least for Facebook, as it attempts to silence those increasingly vocal doubters currently scaring new-found investors with questions about its ability to commercialise the network without driving users away.

Sorrell restates his doubts about Facebook

Sitting among them is one Sir Martin Sorrell, WPP’s chairman who also has a few shareholder matters of his own to think about this week, after an embarrassing backlash against his pay. But in a quieter moment during a lunch I attended last month, the man behind the biggest marketing group in the world once again let his feelings be known about Facebook.

He said: "Its problem is, and we said this months ago, is that it is a social network; it’s all about social conversations. You invade social conversations at your peril… I just have a fundamental issue about that, and we’re starting to see that issue come to the fore. How do you monetise a social interaction, and then aligned to that is ROI. How do you measure it? Because clients are now starting to spend significant sums of money.

"The biggest spender on Facebook as far as I’m aware spends about $125 million, and the average is between $25-$50m, these are not small sums of money, and procurement and finance are starting to look at that and say, ‘where’s the return?’."

Facebook will be hoping the latest research from comScore has gone some way to addressing such doubts. Indeed the paid ad example provided is for "a large retailer" which enjoyed a 16% lift in online and retail sales after four weeks of Facebook premium ads. That’s not a bad return for four weeks of activity, and it becomes even more impressive once online sales are tracked in isolation, up 56% during the period.

But for any marketer seeking to justify social media spend, the study will not be enough in itself. I understand comScore was concerned with the lack of weight this section of the study carries, but failed to persuade the brand in question to put its name to the case study.

The research specialist does add anecdotally, "comScore has conducted thousands of attitudinal and behavioural lift studies on paid online ad campaigns on behalf of many clients (including publishers, advertisers, and agencies), which often show statistically significant lifts in the measured response", but this only makes the lack of detail all the more frustrating. 

The rest of the report, which draws upon data and analysis from a suite of tools like comScore Social Essentials, comScore AdEffx and Facebook’s internal analytics platform, is far more convincing when it comes to the effectiveness of earned media exposure on Facebook.

Brands communicating directly to fans, with content that is then shared to friends of fans, is robustly found to have a direct impact on sales. Starbucks for example reported a 38% rise in purchases in a group of brand fans and their friends after they were exposed to a brand post. Similarly fans and friends of US retailer Target were 21% more likely to purchase in a store or online after exposure to an earned-media message.

The success of this free form of communication on Facebook will be welcomed by brands, but how about those who have invested in the network’s ability to boost revenue?

Shareholders certainly won’t need reminding that when General Motors announced it was pulling around $10m of annual ad spend just days before Facebook filed for IPO, the car giant stressed it will continue to operate its branding pages for its fans – clearly valuing the free-stuff which appears to be more effective anyway.

Facebook continues to maintain earned, owned and paid activity works together on the site, with a brand’s fan reach and engagement significantly "amplified" by its paid ads. I understand more convincing evidence is on its way. ComScore is set to launch a European version of the Facebook study at the end of the month, and it promises to have more paid media case studies, and this time with at least one named brand. This debate is far from over.

Follow me on Twitter: @DurraniMix

This article was first published on mediaweek.co.uk