Does advertising work on Facebook?
Contributed by: Email on 06/12/2012 10:57 AM
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As the quiet period following Facebook's initial public offering came to an end Tuesday, research firm comScore released a study partially commissioned by the social network that attempts to show the value of marketing on the site.
In the study, which follows up on another report done last year by comScore called the Power of Like, the research firm found that being a fan of a brand on Facebook causes people to purchase that brand more frequently.
For example, comScore tracked people who were Starbucks fans on Facebook against a control group of people who weren't exposed to those messages. ComScore found that over a four-week period, fans and their friends bought 38% more frequently at Starbucks than people who weren't exposed to the Facebook marketing.
Not all brands cited in the study had similar results. Amazon, for example, saw that fans of its Facebook page spent twice as much money at the retailer's site than the average Internet user, but their friends only spent about 8% more. That study was conducted over the holiday season and Amazon didn't have in-store sales, which comScore attributed to the lower results.
In an interview, Brad Smallwood, head of measurement and insight at Facebook, said the results proved "it's a myth that Facebook advertising doesn't work."
Mr. Smallwood acknowledged the company has been told by some of its biggest clients that it wasn't doing a good enough job of showing the value of advertising on the site. "We heard we have to do a better job of demonstrating this x scale," he said, noting that releasing the study was part of a larger effort to prove that paid and unpaid advertising on Facebook leads to consumer spending.
Facebook, which has been in a quiet period since its IPO last month, has been criticized by some big brands and advertising agency executives who said there's no evidence advertising on the social network leads to consumers spending more money. A few days before Facebook's IPO, General Motors Co. —the third largest U.S. advertiser —said it was pulling $10 million of ads on Facebook because they don't work.
In the study, which follows up on another report done last year by comScore called the Power of Like, the research firm found that being a fan of a brand on Facebook causes people to purchase that brand more frequently.
For example, comScore tracked people who were Starbucks fans on Facebook against a control group of people who weren't exposed to those messages. ComScore found that over a four-week period, fans and their friends bought 38% more frequently at Starbucks than people who weren't exposed to the Facebook marketing.
Not all brands cited in the study had similar results. Amazon, for example, saw that fans of its Facebook page spent twice as much money at the retailer's site than the average Internet user, but their friends only spent about 8% more. That study was conducted over the holiday season and Amazon didn't have in-store sales, which comScore attributed to the lower results.
In an interview, Brad Smallwood, head of measurement and insight at Facebook, said the results proved "it's a myth that Facebook advertising doesn't work."
Mr. Smallwood acknowledged the company has been told by some of its biggest clients that it wasn't doing a good enough job of showing the value of advertising on the site. "We heard we have to do a better job of demonstrating this x scale," he said, noting that releasing the study was part of a larger effort to prove that paid and unpaid advertising on Facebook leads to consumer spending.
Facebook, which has been in a quiet period since its IPO last month, has been criticized by some big brands and advertising agency executives who said there's no evidence advertising on the social network leads to consumers spending more money. A few days before Facebook's IPO, General Motors Co. —the third largest U.S. advertiser —said it was pulling $10 million of ads on Facebook because they don't work.
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