Is Facebook worth spending Advertising Dollars

Over last couple of months i have spent lot of times in measuring performance of advertising campaigns on facebook targeted towards Indian IP audiences. But really except for one really dont have a success story which proves Facebook banner display inventory really works for advertisers.

But before we go into details of it works or doesnt work for an advertiser we need to understand the audience available. As most of the campaigns have run are from Indian audience target perspective what we really understand about the rthem on facebook till now is

i) Primarily Sec-A

ii) Average age Male – 23 Female 25

iii) Average time spent on site per user > 45+ Minutes per day

So the audience really sounds prime to be focus of any type of advertiser let it be brand or performance but then why dont we see success.  Now before i start talking about it just to make sure we are not talking about facebook apps, viral marketing etc here. We are looking at facebook from pure display banner/rich media advertising perspective.

What we have seen till now is very high level of engagement of users with facebook as a product ignoring anything outside the framework completely.  what does it translate in terms of CTR(click through rates)

If its a targeted campaign you may see CTR between 0.03-0.04% but in case you run an un targeted campaign it in terms of targeting all Indian IP users then we see CTR between 0.05-0.07%.  If you just go by these numbers then it break laws of all fundamentals one learns as a media planner where targeting is considered god.  But one needs to understand the property more in general instead of just classifying it part of social networking channel. If you compare facebook to myspace or linkedin biggest difference what you see is facebook is just a communication tool between people. Its not generating any content like myspace etc. Which creates a big difference in engaging user to think and then react in terms of suggestive advertising. If you look at properties on offer at facebook compared to Yahoo! Mail for instance, If i was to advertise will select Yahoo! mail over facebook if during pure vanilla display advertising any day why as facebook just offer 120X600, 728X90 which are based on user/community profile pages or search pages etc.

No advertising on Profile page in terms of 300X250 or Logout page etc, We have tried advertising via facebook apps and they tend to give better CTR as compared to what is offered by direct advertising on facebook property. Biggest thing what i have realized is if you want to use facebook to derive traffic to your own property then it will not really meet your RoI set out but if you look at the medium to interact with your product audience,engage get feedback and work on reputation management then display advertising on facebook can complement the actions. for instance if you would like to promote an event or create a community around your product and  then you advertise it to facebook users using the ad inventory available you will see better return and measurement shouldnt be clicks or CTR but number of users aggregated to your community and ARPU generated through a defined 3 months activity plan after aggregation of user.

If you are a brand and have defined resources to manage on going relationship with audiences then it makes complete sense for you to take facebook route and explore interaction opportunities with your audience but if you plan to do a one off blitz and looking for return then trust me facebook is not your cup of tea. Will be glad to share more learning if anyone needs help.

4 Responses to “Is Facebook worth spending Advertising Dollars”


  1. 1 Rashmi Ranjan Padhy June 6, 2008 at 6:39 pm

    Hey that is a nice break up and a really good post..

    A post which will give the startups a lot of information.

    We have seen a lot of change in the online ad industry, and a proper track of the ad industry is required to know the developments and profit from it.

    Thanks,
    Rashmi Ranjan Padhy
    http://rashmiranjanpadhy.com/2008/06/04/cpm-cpc-or-cpa/

  2. 2 keindia January 16, 2009 at 1:11 pm

    Check out the new facebook Roulette game from games.com. Very Exciting game!

    ‘http://apps.facebook.com/roulette_gamesdotcom/

  3. 4 azon-reader-reviews.blogspot.com February 13, 2014 at 1:37 am

    Thanks for Is Facebook worth spending Advertising Dollars | Business India 2.0
    all the time i used to read smaller articles which also clear their motive, and
    that is also happening with this paragraph which I am reading at this
    place.


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