Time For Facebook To Face The Music

Last week Facebook made some minor news by announcing it would be discontinuing its conversion-tracking tool for performance advertising.  I was a bit surprised by how few people read between the lines of this announcement: the only reason Facebook would discontinue this effort must be that it found its users don't convert!

I've run a number of Facebook ad buys for brands, driving consumers to follow or like the brand, and they have been  stellar in their performance. I've also had clients run campaigns to drive conversion to other off-Facebook activity such as coupons and CRM registrations; surprisingly, these campaigns have also worked really well. But if Facebook saw that kind of positive performance across the board,  don't you think the company would keep the tool alive and start promoting the results? 

It's also a tad bit funny, because it's a brilliant PR move to announce it's shuttering the service the same week that Mark Zuckerberg announces he's giving $100 million  to Newark schools,  because no one wants to blast the guy while he's helping kids with their education needs.  I guess that makes me the bad guy (oh well).



Facebook's challenge is,  its strategists want to the company to be something more than it is.  Facebook has carved out an incredible place in the eco-system of the Internet; simply put, it owns social media.  There is no other portal, site or platform that can compare from a gross user perspective, nor from the depth in which it's ingrained in the daily life of the average Internet user (other than Google, but in a different way). 

People complain that Facebook is "too big" or that it is "too powerful" -- but that's what mass brand advertisers want!  They want big.  They want influential.  They want powerful!  Facebook needs to understand that it may not be a performance buying opportunity, but very may well be the world's largest brand platform ever created!  Facebook can build a brand (and so can Mark Zuckerberg).

I call this out not because it's a bad thing.  There are lots of ways  performance marketers can use the Web to drive actionable, immediate results.  Facebook is not one of them (Google owns that realm).  Some data has been published to suggest that a Facebook user is valuable.  On the low end, Adam Ostrow, on Mashable, puts the value at $1.40 per user.  

Others put it far higher.  From my humble perspective, it is significantly more valuable.  Where else can users express their desire to hear from a brand or service on a regular basis, possibly even every single day, and not get annoyed?  Even if you factor in some level of annoyance, and assume a 10% attrition rate of users who "unlike" your brand, the value is far higher than $1.40.  

Does that mean the platform is going to drive an immediate conversion to a customer somewhere else?  Not really.  Does it imply that the platform can be significantly more influential than a traditional email blast or standard ad campaign, and have stronger, long-term results?  Yes!

And let's not forget that traditional CRM has a cost attached to it, while blasting out messages on Facebook does not.  Until Facebook decides to start charging brands for messaging to consumers, this is still the single most effective way to engage a consumer who has expressed interest.

You also can reach targeted users, similar to your customers, and even those who are friends of your customers.  That's a powerful tool for developing your audience, though admittedly not in the first exposure.  It takes (strike me down for saying this now) frequency to break through the clutter and get your target to listen and pay attention.  Facebook provides that simply by the fact the audience comes back often, even daily.  You may have to be more creative in how you use the platform, but banners, text ads and Facebook pages are only the beginning.  With absolutely no inside knowledge, I can guarantee these will not be the only tools for mass brand advertisers on Facebook in the next 18 months.

So it comes as no surprise to me that Facebook shut down its conversion tracking system  -- but it will surprise me if Facebook doesn't face the music and make a concerted push in the next few months to proclaim its value to brands.  If its strategists miss this opportunity, they shoot themselves in the foot in the long term.  We now know that Facebook is not a place for direct-response, performance-based advertisers en masse.  But that's OK!  

And yes, thank you, Mark Zuckerberg, for giving those kids a ray of hope in an otherwise cloudy environment (maybe that means I won't be viewed as the bad guy for calling you out -- and maybe people won't hate you after they see the David Fincher movie).

8 comments about "Time For Facebook To Face The Music".
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  1. Jon-Mikel Bailey from Wood Street, Inc., September 29, 2010 at 11:54 a.m.

    Great post and great insight! I think this speaks to Social Media Marketing in general. You have to rethink conversion and how to track ROI with using Social Media for marketing. Thanks for keeping it real Cory!

  2. Douglas Ferguson from College of Charleston, September 29, 2010 at 12:45 p.m.

    It'll take more than $100 million gift (from a man worth nearly $7 billion, or less than 1.5%) for me to forgive his words, captured in email to a colleague during the early days. You can read his words in the upper-right corner of

  3. Scott Curtis from Studeo, September 29, 2010 at 12:49 p.m.

    I didn't read the whole article but we are running some FB campaigns right now and they garner the 2nd highest CTR's. The top is a retargeting campaign and they are actually pretty close so for us FB is a great ad source and is not really 'still tbd.'

  4. Mark Naples from WIT Strategy, September 29, 2010 at 2:06 p.m.

    Great Column, as usual, Cory. I keep thinking that FB will introduce a completely new way to think about advertising, much as Google did a few years after we all used it for Search. But FB keeps disappointing. You'd think that with all the new ways to measure engagement and other brand-adherence, like Lotame's LTR, that FB would be out in front on this. Not yet though, hmm?

  5. James Meskauskas from ICON International, September 29, 2010 at 2:21 p.m.

    Good piece, Cory.

    Some advertisers may be getting results, others may not be. Not sure if performance was the reason for FB's pulling the plug on the conversion-tracking tool. Could be that they wanted to be "clean" in advance of the government's impending regulation of online data collection. Could be that it reveals that there really is no grand distinction between advertising on Facebook/social media and any other media. Social media, is, after all, a "weak-connection" platform. Not as motivating to action as other environments (like, say, actual rather than virtual communities).

    I think we're going to find that social media, too, is no magic tool for marketing's needs; it's just one more place to plaster messaging and hope it has some influence on the x-factor of human behavior.

  6. Mike Einstein from the Brothers Einstein, September 29, 2010 at 2:21 p.m.


    Your reference to frequency is misleading. Frequency doesn't relate to impressions across the supply. It only relates to actual reach, which is an audience measurement, not a supply-side metric.

    It is precisely this cause and effect that inhibits scale,
    because you can't scale what you don't reach, and you can't reach anyone with a work product - ads - that no one wants and which everyone is equipped and inclined to avoid.

    People don't gravitate to Facebook for the ads, and never will, to wit it's called a "Wall" for a reason.

  7. Jim McMichael, September 29, 2010 at 4:06 p.m.

    Too many fall into the instant gratification trap of wanting an immediate customer purchase or other activity. Small CTRs are what they are. The old branding idea - having you name out there so that when somebody wants to make a purchase they think of you - is still a valid goal in my opinion.

    FaceBook is great for that. Why not look at it simply as the opportunity it is?

    Valuable insights, Corey.

  8. Kathy Sharpe from Resonate Networks, September 29, 2010 at 5:01 p.m.

    Couldn't agree more. The level of emotion that surrounds the defense of Facebook as an advertising tool is a very sure indicator that it really isn't working.

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