Sure, Big Brands Don't Like Paying for Facebook, But Most of Them Have To

So far, the most intriguing social media story of the week is this one from The Wall Street Journal,  the headline of which might send marketers straight to their budgetary spreadsheets: “Big Brands Like Facebook, But They Don't Like to Pay.”

 The deeper truth The Wall Street Journal is trying to get at is that “Big Brands Like Facebook, But They Don’t Have to Pay.” In other words, only chumps pay for their exposure on Facebook. 

But that conclusion, while sexy, is also a bit specious. The story centers on Doug, the orange spokespuppet for the Ford Focus, and his unpaid-for likeability on Facebook. (In case you’re a newbie, Facebook pages are free, even to brands.)

Doug has more than 43,000 “Likes,” according to his page, but Ford got them for very little -- at least on Facebook, where it spent an undisclosed amount of money on a Sponsored Stories campaign. That is, until Doug’s “Likes” hit 10,000, at which point Ford decided no further ad investment was needed. The story explains: “While Ford shelled out an estimated $95 million to advertise the new Focus across a broad range of media, it spent just pennies on the dollar for Facebook ads.”

While I don’t believe Doug was the centerpiece of the overall campaign -- and I couldn’t find any evidence today that he appeared on TV -- Doug still had a budget. His exposure on other social media channels, like YouTube, primed the pump for his likeability, of course. The “FocusDoug” channel on YouTube contains 49 different videos, which, according to the company, cost the equivalent of producing three TV spots. It also hired Paul Feig, who has directed “The Office,” and an undisclosed writer from “The Simpsons,” to produce them. Sure, the whole thing is cheap relative to other forms of video, but we’re still talking about an initial investment of millions of dollars; those “Likes” didn’t occur in a vacuum.

In fact, the story actually proves one of the maxims of the social marketing age: that it takes a combination of paid and earned media to have a shot at viral success.

Yes, it’s true that in Ford’s case, much of that money didn’t get spent on Facebook. And that is a problem. But only to a point. The difference between Facebook and other media properties -- with the exception of Google -- is that advertisers have to be there, and while some of those advertisers will create their presence on the cheap, others won’t be able to. Viral video is lightning in a bottle, and always has been. Not every advertiser, agency, or creative team is capable of creating a “Doug.” They will need to invest more, in the hopes they can buy people’s interest.

Meanwhile, the near-universal need to be on Facebook isn’t something that can be said of a single TV network, a single magazine, or a single radio station. Not all major advertisers simply have to spend money on Fox. On or offline, there is no other property, besides Google, that has 800 million users -- and there’s no other property with Facebook’s level of engagement. People spend time there, so advertisers want to spend time there too. To wit, Facebook told the Journal that 96 of the top 100 U.S. advertisers spent money there the last year.

Yes, the numbers, once again, tell the story, and here are a few more. According to a comScore chart that accompanied the story, Ford spent eight percent of its digital ad impressions on Facebook in September, but other big-budget advertisers invested in far bigger Facebook footprints. AT&T, Walt Disney, American Express, Blizzard Entertainment and IAC all spent had more than 20% of their impressions appear on Facebook; there are a number of other high-profile advertisers, including Google and Sony, whose percentages are in the high-teens.

But here’s the showstopper: all told, Facebook accounted for 25.7% of all Internet ad impressions in September. Even in the heyday of Yahoo, I doubt that any one property had so much dominance in online display advertising. Sure, as an advertising proposition, Facebook is a harder nut to crack then some other properties, like Google, a direct-response platform if ever there was one. We’ve discussed that here before. But Facebook is such a dominant property that, in the big scheme of things, the fact some advertisers aren’t spending a lot of money there barely matters.

 

 



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4 comments about "Sure, Big Brands Don't Like Paying for Facebook, But Most of Them Have To".
  1. Rick Mulholland from Novell Design Studio , November 3, 2011 at 1:26 p.m.
    You made a very good point – Doug did have a budget, and wasn’t just a sock puppet being filmed with an iPhone. It’s a story that does appear to have a happy ending, but this ending is probably closer to be atypical rather than typical.
  2. Brad Stewart from Adjoy , November 3, 2011 at 4:13 p.m.
    Thanks for highlighting the affordability myth of social media marketing, Catharine. For anyone who actually engages in SMM, you know that cost per acquisition is astronomical unless you are firing on all cylinders, and hit a nerve.
  3. Kristina Marino from Mirrorball , November 3, 2011 at 7:50 p.m.
    via the WSJ article: Ford spent more than $95 million buying ads promoting the Focus in the first half of the year on TV, print and other media, according to WPP's ad tracking firm, Kantar Media. The auto maker declined to comment on Kantar's spending figure, but said it spent less than 5% of its total online ad budget for the campaign on Facebook to make Doug a well-liked attraction. 5% of $95 Mill is $4.75MILL!!!! That is no small penny!
  4. Cathy Taylor from MediaPost , November 4, 2011 at 12:05 p.m.
    But the $95 million is for total ad spending, not just online. So Ford spent $4.75 million online but a small portion of that on Facebook.