We have come across a report by ARF comparing display ads click-through rates (CTRs)on Facebook. It was published in Macleans.ca. We felt like it is only one side of the story. Below is our response based on our experience with Facebook marketing and various other research studies.
The ARF report is clearly missing a few other social media measurements like engagement ratio on the posts. The CTRs (click-through rate) on display ads are always low. These are rarely ever measured for CTRS, unless there is something compelling users to click, like an offer or call to action, targeted to right audience (direct response campaign).
When comparing Facebook ads to other display ads or just display ads on Facebook, one needs to consider the reach one can have on Facebook and compare it to the reach on display ads. Facebook is more about the ability to engage, listen and build relationships with existing and new clients. It is like an old school word of mouth strategy. When people share and like or comment, the word spreads and it is purely based on Edge rank.
What is the ripple effect on Facebook?
Facebook marketing is like old word of mouth marketing. When someone likes a post or comments on a page or interacts with ads, the word is spread to their friends and friends of their friends or public. So whoever is interested in interacting with the post can do so and the word spreads faster than any other advertising. When businesses engage with the engagement created by the Facebook users they can improve their brand awareness and clearly attract more consumers.
The report didn’t include any statistics on what happens once someone clicked on the display ad and what are the after effects (ripple effect) from the audience. Also, it didn’t count the engagement factor – with social media you create a brand and brand ambassadors to spread your message. Those businesses that doesn’t have strong brand presence offline will not have the ripple effect as much, since nobody recognizes the brand. Most often this happens with small and medium businesses. Can they use Facebook to improve their brand awareness? Definitely they can.