Facebook can’t just sit on its data goldmine

Facebook now has a higher valuation than McDonald’s and Disney following its IPO. Staggering at first thought but not so surprising when you consider how much people, including its investors, interact with the brand on a daily basis. But while Facebook appears to have the stimulant to keep consumers coming back for more, the advertisers so vital to its revenue are starting to crave a tonic to ensure their repeat return: data.

Lara O'Reilly

Marketers, agency executives and those close to the social network from a variety of different sectors have let out a rallying cry urging Facebook to do more to provide proof that social campaigns positively affect their businesses’ bottom line.

In Facebook’s defence, it ran its first marketing conferences around the globe this year, has case studies and regularly meets with its clients to do just that. Brands including P&G, AB InBev and Diageo have all previously declared Facebook has helped them build brand affinity.

These efforts, however, haven’t quelled the concerns of all advertisers. Indeed, US car giant General Motors confirmed this week it is to pull all paid-for advertising from the site, saying it has little impact on sales. Considering GM is reported to have spent $10m on Facebook ads in 2011 alone, the news will come as a blow at a time when investors are looking for signs of its long term revenue growth.

Marketers say they are feeling slightly underserved by Facebook, post-campaign. The reason: they are not being provided with enough analysis on their campaign success that ties their 28,000 likes and 500 shares to a verifiable revenue bump.

Fellow Marketing Week columnist, associate professor of marketing and brand consultant Mark Ritson summed it up: “Brands are learning for all the eyes and the likes, it isn’t always delivering the impact. And it’s that last variable that counts.”

The main issue appears to be that users aren’t logging on to Facebook with a purchasing mindset – if they’re in the market to buy something, they’ll use Google for that. Moreover, Google can provide brands with cause and effect data that their search campaigns led to sales. While Facebook can no doubt influence the ultimate purchase decision, that’s extremely difficult to quantify. It may need to get outside help to get over this hurdle, but either way it must do more of its own advertising to let brands know how to analyse their activity.

Mark Zuckerberg and co. have done a truly incredible job in making the user experience on Facebook second to none – hence why 526 million people visit the site daily, according to data it released in March.

The issue for marketers is that the experience, thus far, has not catered for brands and their needs for advertising to convert to purchase – not just warm, fuzzy feelings.

Unless Facebook adopts more of a commerce or even a search model, it will be difficult for the site to prove definitively that a campaign on its platform can directly enhance the revenue of one of its advertisers. For all the brand case studies currently available on its dedicated marketing website, the dollar sign is sadly absent from many of its examples.

As time passes, brands are moving beyond trial stage and are beginning to assess the true value of their Facebook campaigns as they make decisions on how to slice up their budgets for the coming year.

It is vital Facebook provides marketers with the data they crave if they are to convince their finance directors that social campaigns truly benefit the business.

It’s important to be where your customer is and with a user base of more than 900 million people, Facebook is no doubt that place, but brands can carry on residing their free of charge on their pages.

If Facebook is to secure advertisers’ long term spend and retain its lofty share price, it must do more to prove that paid-for advertising on its network is a sure bet for increasing sales rather than a punt in the dark.


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