Facts, damn facts. Clickthrough Rates (CTRs) for Facebook Ads

Don’t you hate it when facts interfere with a good story? That must be the way Facebook feels today. Scoop is, somebody cared enough about where their money was going to take a hard look at the effectiveness of Facebook ads.

A dedicated Facebook user’s response just might be “Ads? They have ads on Facebook?”. (Yup, those clusters of 20 words or so that clutter the right hand side of the page – sometimes with microscopic images attached.)

And, that’s exactly the problem. We now learn that the clickthrough rate on Facebook ads is .051%. (Here is a summary of the study by Webtrends.) To be clear, that’s 5 one-hundredths of a percent. Or, one click through for every 2000 times your ad is displayed.

Heck, maybe this rate is pretty good since your ad is probably only noticed once out of every 1999 times it’s seen. But it is scary that this clickthrough rate is DOWN. That’s right, the click-through rate was an astronomical .063% in 2009.

And, there’s one more key concern. Facebook ads should be highly targeted – only put on pages of people whose profile indicate the ads should interest them. So your highly targeted ads have a click through rate of five-hundredths of a percent. Yikes.

A Serious Issue

A few years ago an article in Advertising Age noted that it used to be a measured fact that we’d see an average of 500 or so commercial messages in a day and remember one or two. But, we are now confronted with an average of 2500 (or more) messages a day of which…we still only remember one or two.

My analysis? New media has fragmented messages to the point where consumers don’t care about them or pay attention to them. Instead, we bombard consumers with millions of tiny attacks hoping, I suppose, to wear them down.

And that trains consumers to ignore us at higher and higher rates – like what has happened to Facebook.

Facebook’s Value Isn’t as Advertising

Internet advertising has proven extraordinarily weak at reaching out to people who aren’t already interested in your product. These numbers merely confirm what’s always been true elsewhere.

That doesn’t mean I think Facebook isn’t useful to advertisers. Instead, this indicates pretty clearly that advertising on Facebook conflicts with the reasons that we join Facebook as individuals.

At the same time, it’s all about price with this type of advertising. If you’re paying the right price for displaying your ad to 1999 people, then you’ve paid the right price for that 2000th who clicks. Maybe despite these miserable rates you can eke out a living with these Facebook ads.

But if you want your business to thrive, Facebook’s generally not the place to build it. To make big change happen, you need to leverage off-line advertising. Then once people know why they should seek you out, there’s a plethora of options for using the internet, retail, and other channels to lead consumers to purchase.

Copyright 2011 – Doug Garnett

About Doug Garnett
Doug Garnett is an expert introducing innovative consumer products and services to market while driving higher return on innovation investment. His career has been spent in innovation and he is the president of Protonik, LLC - an innovation consultancy focused on marketing and innovation. Prior to founding Protonik, he was founder and CEO of ad agency Atomic Direct.

6 Responses to Facts, damn facts. Clickthrough Rates (CTRs) for Facebook Ads

  1. Pingback: WebifiedDevelopment.com » Facebook Marketing Strategies

  2. Pingback: Facts....clickthrough Rates (CTRs) for Facebook Ads | Consumer Packaged Goods CPG Brokers

  3. Bryan Coe says:

    You are making a very broad generalization about the internet based on the click through rates of Facebook. Plus, what are you measuring it against in “offline” media and how? What are the stats for the number of people that see a billboard or a TV spot and do something actionable? You can argue that tv ratings are up, but that in itself is just an estimate. In fact majority of offline media reporting is just a “good story”. Remember the old mantra “Half my advertising is wasted, I just don’t know which half.” Online advertising diminishes this sentiment.

    Oh yeah, don’t forget that one of the place that tv is seeing growth is online.

    • Doug Garnett says:

      Agreed, my conclusion is a broad generalization. But it’s not based solely on this Facebook example. The Facebook example is just one more confirmation of the vast gap between web hype and web reality. My conclusion, instead, is based on years of experience in advertising and communication – both online and offline.

      From its very start, we’ve been told how extraordinary the web will be for reaching people at the point when they care. Except, that’s not what really happens. What has surprised me is that for a “highly targeted” medium, clickthrough rates across the web are extraordinarily low.

      Consider that dull & boring old direct mail continues to return rate of a 1 to 5 responses per hundred sent while a banner ad is lucky to generate 1 to 5 responses per thousand presentations.

      Don’t hear me wrong: the web is cost effective – because a web impression is priced as low as its value generating response.

      But these fundamentals should cause us ALL to question whether the web advertising theory has any connection with web reality.

      For more thoughts on offline vs online advertising, here’s an additional post I’ve written: https://dsgarnett.wordpress.com/2010/10/29/off-line-advertising-is-necessary-for-online-growth/

      • spotmagicsolis says:

        You are correct, Doug. I am involved in bringing a direct mail approach to online broadcast media. I followed from Linkedin.

  4. frostwire says:

    Very nice post. I just stumbled upon your blog and wanted to say that I have truly enjoyed browsing your blog posts. After all I will be subscribing to your feed and I hope you write again soon!

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