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Forrester Slams Facebook: Where They Missed the Mark
Posted on October 30th 2013
Facebook took a hit this week from one of the most influential, respected research organizations on the web. Forrester, a research and analysis information technology company, slammed Facebook’s marketing and advertising efforts with a scathing report on Facebook’s lack of advertising follow-through. As social media director at Quaintise, speaking strictly from the experience of managing many client Facebook marketing and advertising accounts, I think Facebook might be getting a bad rap.
"Facebook is failing marketers."
That was the headline, the main point that Nate Elliot, Forrester's vice president, wrote in an open letter to Mark Zuckerberg. The letter goes on to say:
I know this statement sounds remarkable, perhaps even unbelievable. After all, you offer marketers access to the largest audience in media history and you know a remarkable amount about each of your users. As a result nearly every large company now markets on Facebook. Last year your company collected more than $4 billion in advertising revenues.
But while lots of marketers spend lots of money on Facebook today, relatively few find success. In August, Forrester surveyed 395 marketers and eBusiness executives at large companies across the US, Canada and the UK -- and these executives told us that Facebook creates less business value than any other digital marketing opportunity.
Elliot does make some great points, which I whole-heartedly agree with:
The first being that Facebook focuses too little on the thing marketers want most: driving genuine engagement between companies and their customers. The simple fact that only a small fraction of a brand’s Facebook Fans see each brand post, 16% of the brand’s Fans to be exact, points to the fact that Facebook is focused on making money for it’s investors over making connections for it’s users.
While Facebook has done a great deal to improve Facebook Advertising, it has also positioned itself so that brands are nearly required to utilize that advertising in order to reach their Fans – the Fans who have already Liked the brand page, have already shown interest in the brand, and who have blatantly told Facebook that they want to see that brand’s page updates.
The second great point is the fact that Facebook delivers tens of billions of display ads every day. But fewer than 15% of those ads leverage your ever-growing cache of social data to target relevant audiences. With that ‘ever-growing cache of social data’ that Facebook has amassed over the years, it’s unacceptable that they do not allow for greater ad innovation, even placement on other sites provided with such targeted social data. There is unlimited opportunity available for brands utilizing Facebook’s ‘ever-growing cache of social data’ – the problem is Facebook’s unwillingness to allow for innovation and originality.
Why Quaintise Still Loves Facebook Advertising
Forrester went off the deep end with this report, driving Facebook into the ground because of a small-sampled, limited research report. With over 15 million active brands on Facebook, Forrester only sampled 395 of them. And in that sample, the difference between the top rated advertising source and Facebook was only 0.3 points on a scale of zero to five.
Of course, the story is not complete without both sides of the argument, and so Facebook responded to Forrester with the following:
While we agree that the promise of social media is still in process, the conclusions in this report are at times illogical and at others irresponsible. The reality is that Facebook advertising works. That’s why we have more than a million active advertisers including all of the Ad Age 100. And, countless studies have demonstrated the significant return on investment marketers see from Facebook. Our promise is to continue to deliver positive results for marketers.
Facebook Advertising can be highly effective when used properly. Here at Quaintise, our Facebook Advertising campaigns run at under $0.20 Per Click with an above average (4%) Click Through Rate targeting extremely segmented demographics with extremely concentrated ad campaigns.
The key to Facebook Advertising, and one of the reasons why we at Quaintise love it so much, is understanding who your audience on Facebook truly is. There is no amount of ‘social data’ or ‘big data’ that Facebook can provide it’s advertising brands that can substitute intuition and empathy for the targeted audience.