Unpacking The Horrific Math of Facebook Advertising

Adweek is reporting on a study by Webtrends that shows that the performance of advertising on Facebook, which was astonishingly bad in 2009, has gotten worse in 2010. The average click-through rate has fallen from .063% to .051%.

Let’s think about what that means. To get a single person to click on a Facebook ad, 2,000 people must be exposed to it. If all 500 million people on Facebook were exposed to an ad, it would net just 250,000 clicks. Put another way, if your ad were seen by a group of people the size of the combined population of the United States and Brazil, it would be clicked on by a group the size of the population of Chandler, Arizona.

Webtrends’ study covered 11,000 ad campaigns and 4.5 billion impressions. All together, 4.5 billion impressions generates a total of only 2.25 million clicks. That’s not much to spread around among all the brands clamoring to advertise on Facebook. In fact, when you divide this number up among the 11,000 ad campaigns, each one averages an embarrassing 205 clicks. I don’t know of too many brands–or for that matter too many corner dry cleaners–for whom this type of performance is acceptable.

Yes, yes, of course, Mark Zuckerberg and his pals will protest that click-throughs aren’t important on Facebook. They’ll tell you brands benefit from Facebook’s “social value,” not its ability to drive traffic. I give them full marks for this, if only because it must be extraordinarily difficult to say such things without giggling when they know that ad spending on Facebook is projected at $2.19 billion in 2011.

Don’t misunderstand me. I’m not saying Facebook is completely without value for brands, but I am saying advertising on Facebook is damned close to it. Agencies that want to deliver value to their clients have an obligation to go beyond ads. They have to think harder and invent ways to be genuinely engaging. Forsman & Bodenfors in Gothenburg, Sweden did it brilliantly for IKEA, leveraging the basic photo tagging feature of Facebook in a way no one had ever thought of before. Presumably, clients who can do small amounts of math will demand comparable thinking.

Photograph © Jason McELweenie