Home Market Global survey says 44% ‘never’ click on Facebook sponsored ads

In yet another blow to the Facebook IPO this week, following the withdrawal of GM’s $10m Facebook advertising campaign, a new global survey says 30% of Facebook users ‘strongly distrust’ the company with its data, while 44% say they’d ‘never’ click on Facebook sponsored ads.

Regular readers would know of my own suspicions regarding the world’s largest social ‘notwork’, Facebook, but don’t take my doubts over Facebook’s bona-fides – let’s hear from Facebook users instead.

Greenlight, a “leading independent digital marketing agency” has chosen the midst of Facebook’s IPO run up to stick its own boot into the book of nearly one billion faces in its new global survey entitled “Search & Social Survey (2011-2012)”.

In the same week as Government Motors – I mean, General Motors – decided it was going to stop wasting $10m per year on Facebook ads because they basically weren’t delivering the expected results, Greenlight’s survey surely isn’t welcome aboard the Facebook gravy train, although you’d have to doubt whether Facebook could care less about who says what at this still pre-IPO moment in time.

Asking a small number of 500 people worldwide – small given Facebook’s 850m+ user base – Greenlight says that 30% of respondents “strongly distrust” Facebook with their personal data, while 44% “say they would ‘never’ click on Facebook sponsored ads”, with Greenlight noting that this “indicates Facebook's advertising programme has an upward struggle.”

The 500-strong (or 500-weak?) pool of people surveyed included “students, law enforcement professionals, medical staff, accountants [and] lawyers to the unemployed”, and asked “how they engage with online advertising, search engines, and social networks, in order to glean insight into how consumers engage with marketers today, and to formulate views on what the future might hold.”

On the other hand, “50% of respondents to Greenlight’s survey said they use Facebook for social engagement, sharing photos, and catching up with friends and family.”

When asked “How regularly do you use the following websites/services?” in a list including Facebook, Google and YouTube, Facebook came in at number 3, but when asked “Which of the following do you use on your mobile phone?”, Facebook came in at a slightly higher face-saving ranking of number 2, with “roughly 30% of those surveyed saying they use Facebook on their mobiles and tablets.”

Hannah Kimuyu, director of paid media at Greenlight stated: “Facebook's popularity doesn't come as a surprise. However, with over 30% of respondents saying they 'strongly distrust' Facebook with their personal data, Facebook's advertising programme has an upward struggle. Facebook's advertising programme allows brands to connect with more than 800 million potential customers, through targeting their age, gender, location and interests, in other words - personal data.”

Then, when asked “Do you click on advertisements or sponsored listings in Facebook”, Greenlights results show that “just 3% of respondents answered with regularly and 10% often”, while “the alarming response was the 44% that answered never.”

Continued on page two, please read on!

Greenlight then asks, in its press release, whether reflect an advertiser's point of view, with Ms Kimuyu stating that “For Greenlight and many other agencies and brands, advertising on Facebook has become part of the 'usual mix'. We specifically saw our Facebook investment (client media spend) overtake both Yahoo and Bing collectively at the start of 2011, hinting the channel has constant growth and is delivering a strong enough return to invest more.”

Then, pointing towards a “Global Facebook Advertising Report compiled by TBG Digital in Q2 2011”, which examined 200 billion impressions across hundreds of advertisers in 21 markets, we see that the “retail delivered the highest click through rate (CTR) when compared to other sectors.  Furthermore, retail saw the largest increase in growth, going from being non-existent in Q3 2010 to showing steady growth by Q2 of 2011 (a 36% increase).”

Ms Kimuyu notes that “Pulling this study back to Greenlight's client base, we have seen similar performance levels, especially with retail getting more from Facebook.  On average a CTR of 0.5% - 0.8% is considered positive, however retail brands typically achieve 0.8% - 1.0%.”

She then points out that “similarly to Google's Display Network (GDN), Facebook has spent the last 12 months developing its advertising programme, slowly moving from offering just branded advertising (Fan Acquisitions) to becoming a serious direct acquisition channel”, stating that: “Many of the developments are appealing to retail brands, especially with retail being the most active in the space.  Most recently we have seen one high street retailer achieve a 15% higher average basket value and a 20% increase in conversion rates on Facebook, when compared to its Search activity.”

To answer the question as to when Facebook is then most effective, we learn that “the most popular and effective ad format is the Sponsored Story. The format delivers, on average, a 32% decrease in cost per acquisitions (sales) and an increase in CTR (engagement)”, with Ms Kimuyu adding that “When running both the traditional ad format alongside a sponsored story format, we tend to see at least a 30% increase in conversion rates, again with retail leading across the sectors.”

In conclusion, Greenlight’s Ms Kimuyu states that: “Although 44% say they would 'never' click on advertisements or sponsored listings in Facebook, it is interesting to see that those who do find the targeting effective and engaging.  Moreover, given the positive growth figures, we at Greenlight predict that more of us will be advertising and hopefully 'clicking' on an advertisement or a sponsored listing on Facebook this year.”

A light at the end of the tunnel for Facebook after all, perhaps, although as always, given my inescapable suspicions and doubts over the king of social networks, we’ll just have to wait and see.


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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.


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