In a revelation suggesting the rationale for advertising on Facebook is more like astronomical science than marketing science, one of the social network’s clients told industry executives and Wall Street analysts that his rationale for budgeting it is akin to deep space exploration.
Calling the revelation "one of the best explanations we have heard to date about how Facebook budgets have been justified," Wall Street analyst Brian Wieser issued an equities research report this morning based on presentations at an undisclosed marketing conference.
"The marketer began with a 'gut' feel that they should be advertising on Facebook, as so many marketers have done," writes Wieser, a senior research analyst with Pivotal Research Group.
"Pointing to NASA's hunt for planets outside of the Solar System by looking for 'wobbles' of light, the marketer performed extensive analytical exercises (employing Big Data analytics consultants) which intended to look for marketing outcome 'wobbles'."
Wieser says those exploratory probes are then rationalized "with extensive testing" to determine how Facebook impacts a "range of metrics."
Wieser says the revelation indicates Facebook’s role in media-mix models is "less about proving cause-and-effect and more about providing confidence that a budgeting choice is 'less wrong' than alternative choices."
Despite the astronomical view of Facebook’s marketing ROI, Wieser says he expects Facebook’s revenues to continue to accelerate as it expands its advertiser base and adds new advertising products.
"Conflicting viewpoints were put forward by some presenters on how to maintain a social media presence," Wieser concludes, adding: "To this end it was once again evident that Facebook remains an experimental property for most marketers."