Brand ads on Facebook — let’s face it, we cannot escape them. But how can companies, especially those low on brand awareness, better use them to their advantage? And click-through rates have always been the metric everyone counts on. Why is Facebook saying otherwise?
At an exclusive media session last Tuesday with Facebook’s Doug Fraser, who is currently in charge of measurement solutions and pricing in the Asia Pacific region, e27 learned that click-through rates (CTR) for brand advertisements do not necessarily equate brand resonance.
He also talked about the three Rs of brand advertising on Facebook – reach, resonance and reaction, which can track and help businesses understand the best way to hit their goals.
In Nielsen’s Online Campaign Ratings for October 2012, Facebook reach is highly accurate with 94% for broad campaigns and 91% for narrow ones. This beats the online average with the statistics being 77% and 27% for broad and narrow campaigns, respectively.
In an analysis of more than 60 campaigns on Facebook, 70% saw a 3 times or greater return on ad spend, and 49% saw a 5 times or greater return on ad spend.
According to reports from comScore, one third of advertisers, agencies and publishers still use CTR as a performance metric but only because it is fast, cheap and easy to compute. However, this is a misleading measure of the effectiveness of digital advertising.
Analysis from Nielsen also corresponded with the idea that CTR in brand advertising does not equate offline sales — there is no correlation between the two. Facebook also explained that according to their research, 99% of all sales come from those who did not click on the advertisements and only a meagre 1% did click and went ahead with purchasing.
Facebook suggested DataLogix, which they use to understand consumer behaviour. It is a third-party software which analyses buying patterns, measuring 5,000 brands over 100 categories, which Facebook says is a “measurement-only, privacy-safe, direct match” analysis.
However, with many small enterprises rising up in Asia, the majority of them do not even have the basic brand awareness to start with, especially since the market is overly saturated.
Doug stressed the importance of measuring these three Rs. “I think the reach, resonance and reaction framework is applicable to brands of all sizes so not only for the large businesses and also small businesses.”
Evidently, this is possible.
CottonWork is an online shirt maker company based in Hong Kong, which has a fan base of 18,577 users. Using the social networking site, CottonWork was aiming to acquire more new registrations to their main website, stay connected with existing customers and increase brand awareness.
It leverages their Facebook campaign through different features, like promoting special offers for fans, posting pictures of upcoming fabrics, prints and designs, and responding to customer queries.
Using Facebook Ads, CottonWork received a 40x increase in traffic to their website in just three days. There has also been a five times increase in membership sign-ups on the website from using the service to reach the right audience. Compared to other traffic sources, there is a 30% increase in average order sizes from customers heading from Facebook.
“The social nature of Facebook has had a tremendous impact on our business, and word of mouth via Facebook is our customers’ most trusted source of information. Not surprisingly, 50% of our recent growth in revenue can be directly attributed to Facebook,” said Lam Chun Kwan Kelvin, director at Cottonwork Limited.
Another success story is Philippine-based online shopping portal, Chicify, which saw 1,000 new customers and a 13 times increase in site registration, and all is attributed to its advertising on Facebook. It also registered a 667% increase in revenue, because of its Facebook advertising presence. It has a total of 165,000 fans on Facebook.
“Facebook is one medium that we will surely use time and time again because it allows us to connect to our customers, target our market, measure our campaigns and market quickly and cost efficiently,” said Sultan Joson, the CEO of Chicify Shop.
With Chicify, its main goals for using the social network are to engage with prospective and existing customers, raise awareness and visibility for the website, and drive traffic back to its company website.
And with their main demographic being females, Chicify uses their advertising space on Facebook to target these women who are interested in fashion to become fans. They also take advantage of it by promoting product-related posts, sell products by directing users to the tab to purchase items, and get friends of their existing fans to join as well through sponsored articles.
According to Facebook, Wine Market Australia, an online wine retailer with a fan base of 29,000 users, earned $15,000 AUD in revenue per month through their Facebook e-commerce shop. It was founded in 2008 and had 450 orders from unique customers on their Facebook Page.
Its goals are mainly to develop the page into a fully operational sales channel with strong brand credibility and awareness. It also focused on its e-commerce shop to drive sales, gave away vouchers and special offers to its page fans, and have forms to generate new leads.
In gist, Facebook is an entirely new medium for communicating and engaging with customers. The more “traditional” means of measuring performance, like clickthroughs and eyeballs might not necessarily be relevant with the social network. Again, what matters are the three Rs: reach, resonance and reaction framework.
Image Credit: Dominate Web Media
The post Facebook: small companies benefit from brand ads, CTR does not matter appeared first on e27.
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