Facebook Advertising is a Bust for Brands

I casually read a blog post by UK-based Market Sentinel that I gave a second look at a day later.  It deals with Market Sentinel’s examination of how effective Facebook advertising is for brands.  Their conclusion: it’s not.

As with any analysis, it has its pluses and minuses (more on that shortly) but what caught my eye on second read were the online metrics used.

Did you know that you can:

• track your Facebook fan base online, just like rock stars do?
• find the popularity of any Facebook application?

Read on to learn how.

But first, a look at the job Facebook does for advertisers.

The Money Still Flows to Google

My gut tells me that the folks at Market Sentinel are right: Facebook is not a mecca for brand advertisers who use Facebook like they use conventional media.  Few have cracked the code.

Earlier this month I provided stats on social media advertising (the data excludes Google) showing that 98% of companies are either already doing advertising on Facebook, or plan to do so this year.  What the data does not show, however, is how much skin advertisers have in the game, i.e. ad spend.  This chart, though based on data gathered 6 months earlier, sheds light on share of ad spend.

If projections turn out as forecast in this scenario, then Google is expected to capture almost half of online ad spend next year.  Facebook, though growing, would take share from AOL yet still lag behind Yahoo! in 3rd place.

Of course, the marvelous thing about projections, as I blogged yesterday, is that they cannot anticipate future events.  They are predictions of how the future might be, not how it will be.  One of the events this projection could not anticipate was the launch of Google +.  My betting is that Google’s ad spend share can only go up, not down, as a result.  Time will tell.

What’s Your Fan Base?

The visual centerpiece of the Market Sentinel blog is a table showing the Facebook fan base for the Top 20 celebrities.  Eminem leads the pack with 42 million fans.  All of the celebrities leave big brands and their fan pages in the dust.

Here’s the interesting metric though.  Eminem only has 575 loyal fans - as defined by those who write comments more than the average for the other 41 million.  The most active fan base of the Top 20 is that of Lady Gaga, who has 1,231 active fans out of her 39 million followers.

Why should this matter?

Because only Facebook users who actively interact with a page receive updates.  In other words, only those fans who frequently visit and interact with a company’s page automatically receive the company’s updates in their Facebook stream.

So, all those clever “Like Us” promotions don’t end up streaming company content to the thousands - or millions - of fans who signed up.  If Lady Gaga updates are only reaching 1,231 or so of her 41 million fans, you have to wonder who is receiving those promised American Express updates.  I know I’m not.

If you’d like to find out the size and loyalty of your Facebook fan base - it’s free.

Visit Skyttle Friends  

Just be sure you are signed onto your Facebook account, then the rest is easy.  Warning: prepare to be disappointed.

What Facebook Apps get Traction?

This goes to show that, online, there’s a metric for everything.  If you’re familiar with Alex website rankings, you’ll find this similar.

Appdata is an online traffic tracking service run by Palo Alto-based Inside Network.

Here’s its Top 100 Application Leaderboard.

Scroll through the listings and you’ll soon notice, as reported by Market Sentinel, that brand applications, though many, don’t garner much usage at all.  Why?  Likely because few companies have figured out what is truly of value and interest to their customers and followers.  They’d all be better off understanding, as Starbucks did, why the game applications garner large followings.

You can track both Facebook’s top applications and apps developers, and call up all sorts of interesting time graphs - just as you can with stocks.  Here’s what the headings mean:

• DAU - Daily Active Users
• MAU - Monthly Active Users (a summation of each DAU count for the month)

Takeaways

1. Companies (brands) are still figuring out how to promote themselves on social networks like Facebook.  Activity and experimentation is high, but ROI is low.  With repeated trial and error, they’ll catch on.  And when they do, ad spend will catch up.
2. Corporate brands should use Facebook as CRM (Customer Relationship Management) tool, and not as a substitute for email marketing or display advertising.