As a company that measures Facebook Ad spend from click all the way through the marketing funnel to performance events like registrations, viral invites and purchases, we know first hand that Facebook Ads “work” in driving revenue and business value. Campaigns run through Nanigans’ Ad Engine drive over 2 million performance events every day, a large portion of which are actual purchases. Needless to say, we were excited when comScore released The Power of Like 2: How Social Media Works report — a major focus of which is how Facebook Advertising drives both online and offline sales.
Case Study: Facebook Ads Drive Purchases
In March 2012, 15.2% of all display ads across the web were socially-enabled, an 8.2% increase from Novemeber 2011. comScore attributes the growth to brands’ increased understanding that Facebook is crucial to successful marketing, and that Facebook Ads can result in meaningful sales.
comScore conducted a study with a large retailer to examine the effects of Facebook Ads on purchase rates, by comparing a group with exposure to Facebook Ads to one with no exposure. As shown in the graph below, a larger portion of those who were exposed to Facebook Ads (represented by the solid line) purchased than those who did not see the Facebook Ad (represented by the dashed line). And this was the case in both online and offline shopping scenarios.
According to comScore:
For a medium that is often noted as having below average display ad click-through rates, the ability to understand effectiveness as a result of exposure (i.e. view-through effectiveness) and independent of a user on an ad offers critically important context for understanding marketing effectiveness on social media channels.”
Speaking to Facebook’s impact further up the marketing funnel, pre-purchase, another case study in the comScore report underscores how the volume of interactions on Facebook compare to interactions on a brand’s website. Fruity candy maker Skittles saw Fan page traffic outpace traffic to its corresponding brand website. Skittles.com attracted 23,000 unique visitors the website in March 2012, and in the same month, Skittles’ Facebook Page saw 320,000 visitors — 14 times the traffic! comScore notes that Facebook Pages often outpace their .com counterparts because there are multiple places for Fans to connect with brands on Facebook, such as in News Feeds, with Sponsored Stories, Premium Ads, Friends’ sharing and directly on a brand’s Page.
This comScore study built upon its previous report from July 2011, The Power of Like: How Brands Reach and Influence Fans Through Social Media Marketing, which examined how acquiring Likes on Facebook was an “initial springboard” to reaching people with paid and earned media. ”The Power of Like 2″ study goes beyond this “initial springboard” to look at how brand pages were fairing a year later after the initial study, how online and offline purchase rates increased, and the importance of the amplification of a brand’s messaging.
The report is broken down into three sections:
(1) Fan Reach: In order to be effective on Facebook, brand messages need to be viewed and discovered by consumers. Facebook’s algorithm rewards brands who engage frequently with strong content by increasing their chances of appearing on users’ News Feeds. Brands can maximize Fan Reach even further through Facebook Ads.
(2) Engagement: Engagement includes Likes, shares, check-ins, etc. and are valuable because they expand the reach of a brand’s message when a user takes one of these actions.
(3) Amplification: Amplification is the result of Engagement, or the “reach” component we explained above. The average Facebook user has hundreds of friends, so when a user shares a brand message (Like, post, etc.) it can potentially reach dozens of of their friends.
The report is loaded with more information on branding and the effectiveness of Facebook advertising–check out The Power of Like 2 How Social Media Works to get more insights and let us know if we can answer any questions for you!