Tuesday, October 29, 2013

Marketers Use But Are VERY Disappointed By Facebook—Forrester Study

A new report from Forrester’s Nate Elliott reveals what many of us in social business have long suspected: Brands may be using Facebook for marketing, but they are not particularly happy with the success they are seeing.

Forrester surveyed 395 marketing executives from the US, UK and Canada about the business value derived from 13 different online marketing sites and tactics. The outcome was that, “Facebook offered less value than anything else on our list.” Just how dissatisfied are marketers with Facebook? Even Google+ marketing is rated higher!

The report, “Why Facebook is Failing Marketers” (free for Forrester subscribers), notes that more than seven in ten marketers already post updates to a branded Facebook page and approximately half buy paid ads on the social network. Despite this, marketers report Facebook is furnishing disappointing business value and that Facebook ads “generate less business value than display ads on other sites.”

Forrester notes that Facebook status updates are delivered to just 16% of a brand’s Facebook fans; by comparison, the average opt-in marketing email delivery rate exceeds 90%. In the footnotes, Elliott notes, “It’s safe to say that if your email service provider was only delivering messages to 16% of your mailing list, you wouldn’t think twice before firing them.”

The report concludes with recommendations for marketers and Facebook. I hope both parties are listening, because if big marketers yank their ad dollars and Facebook fails to evolve their ad products, Forrester predicts a further degrading user experience on Facebook.

What I really liked about this report is that it does not simply stop at what marketers are saying but also digs into how significantly Facebook’s potential to change advertising has been missed. As I noted in my post earlier this month, “Facebook's Missed Opportunity to Change Advertising As We Know It,” Facebook had promised to change the very nature of advertising with new forms of marketing based on social signals. Today, however, the social network offers advertising almost undifferentiated from that available on other highly trafficked websites. “Only approximately 10% to 15% of the ad impressions delivered on (Facebook) use social connections as a form of targeting,” according to a Facebook executive, leading Elliott to note that the social network “has become a Web 1.0-style ad seller.”

For more information on Forrester’s survey of marketing executives and what marketers and Facebook should do to improve marketing value on the social network, check out Nate Elliott’s blog post or buy or download the report at http://bit.ly/WhyFacebookIsFailingMarketers.

7 comments:

Ken Hittel said...

Augie, I can't say I'm particularly impressed by this study, which I find sensationalist and disingenuous. On a scale of 1 to 5, where the highest satisfaction rating is only 3.84 -- i.e., not one strategy or tactic even rated a 4 -- and where Facebook rates the lowest score of 3.54, there is VERY little difference between best and worst -- just 0.30 on a one/five scale!
Moreover, if you're truly looking for solid online business results, you should be doing most if not necessarily all the things on the chart. For most companies, large or small, I think Facebook is a necessary item in their digital portfolio, which is perhaps proven by the mere, sheer fact that all 395 of these international marketers are using Facebook advertising, even if they find it mildly less satisfactory than their most satifactory choice.

Carri Bugbee said...

Good points, Augie. Because Forrester is primarily (perhaps exclusively) concerned with the interests of big brands and their agencies, I think this report is probably skewed to view Facebook more positively than it would if it included businesses of all sizes.

SMBs are even less satisfied with Facebook lately because they can’t afford to hire marketers who spend all day, every day just on Facebook and the platform’s increasing complexity requires that level of dedication. SMBs who got in on the early “gold rush” days of Facebook (when they actually showed up in newsfeed) often have a decent number of fans and can occasionally leverage those. Businesses just getting started, however, find it a long, hard slog—nearly pointless in many cases.

I think every business should have a Facebook presence, but without devoting efforts to drive traffic there via advertising and outside means (instead of driving traffic to their own landing pages or websites—a dubious endeavor at best), I suspect brand pages will be mostly placeholders for customer service issues and sweepstakes/contests.

Carri Bugbee said...

Good points, Augie. Because Forrester is primarily (perhaps exclusively) concerned with the interests of big brands and their agencies, I think this report is probably skewed to view Facebook more positively than it would if it included businesses of all sizes.

SMBs are even less satisfied with Facebook lately because they can’t afford to hire marketers who spend all day, every day just on Facebook and the platform’s increasing complexity requires that level of dedication. SMBs who got in on the early “gold rush” days of Facebook (when they actually showed up in newsfeed) often have a decent number of fans and can occasionally leverage those. Businesses just getting started, however, find it a long, hard slog—nearly pointless in many cases.

I think every business should have a Facebook presence, but without devoting efforts to drive traffic there via advertising and outside means (instead of driving traffic to their own landing pages or websites—a dubious endeavor at best), I suspect brand pages will be mostly placeholders for customer service issues and sweepstakes/contests.

Terry said...

For most companies I speak with, there is an acceptance that access to the news feed is just not possibly without paying. So the performance of ads is critical and like the study recipients, there is growing disappointment. Companies must be on Facebook, if for no other reason that customers have a reasonable expectation of finding them if they want to speak with, or complain to them.

As for Facebook ads, brands will use them, but for simplistic reasons, but not to generate business until Facebook can provide better value.

Augie Ray said...

Well, I have to hand it to Nate and Forrester for getting people talking, if nothing else!

Ken, the fact marketers should be doing all (or most) of those digital tactics does not make moot the fact many marketers have a growing level of dissatisfaction with the platform. I don't think the intent of the survey was to rack and stack various competing tactics but to show that Facebook is lagging compared to other available tactics.

As for it being sensationalist, well, yes, it was. I'm less certain about disingenuous, however. The fact that Nate hears marketers complain frequently about Facebook so he went looking for dissatisfaction doesn't disqualify the results he found. It may be a small sample, but it's still quite a statistically significant one.

Carri, I've also heard SMBs are struggling. And I also agree that spending money is almost required nowadays to build any fan base. Of course, brands COULD earn fans the old-fashioned way--by earning them with great products, service and experience--but why go to that trouble? I'm being snarky, of course, but fan pages were SUPPOSED to be sources of brand energy because of AUTHENTIC reasons, not because of sweeps and contests. And if the brand pages become effective places for customer service, I'm not sure that's really a loss for brands, in the end (provided they actually live up to customer expectations.)

And Terry, I appreciate your insights. I agree that a fan page is necessity nowadays, and I also hear the same level of discontent with the results of Facebook advertising. I think Facebook has plenty of room to improve its ad products, but I still think Facebook missed a huge opportunity by not protecting the authenticity of "likes." The way brands collected useless "likes" from non-fans have left everyone worse off.

Thanks for the dialog, everyone!

Ken Hittel said...

Well, Augie, Nate certainly did set this up as a "rack & stack" -- what else could you call this chart? Facebook at the very bottom, everything else digital above it.
Actually, I don't think a survey of 395 users is at all statistically insignificant. From what I've known over the years, 300 would be statistically significant & results would be little different if you added another 700 marketers.
What IS statistically insignificant, however, is the difference between the most satisfying & the least -- a mere 0.30 out of 400 possible "points."
If marketers are, as you say, "VERY disappointed by Facebook," there's no evidence of it in Nate's rack & stack chart. And the presentation of such disappointment in this chart is indeed, sorry to say, wholly disingenuous.

Augie Ray said...

Ken,

I'll grant you the "VERY" party may have been an exaggeration in my headline (but hey, I'm a blogger who likes to collect readers!)

You can interpret Nate's chart as rack and stack, or you can interpret it as merely listing, from most satisfied to least, the order in which marketers ranked the different tactics. In the report, Nate doesn't exactly say marketers should avoid Facebook; just that they should be sure to evaluate it on an equal basis with every other tactic. (The implication is that marketers are overspending on Facebook ads even though the results they are seeing are less per dollar spent than in other channels.)

I appreciate your tenacity in ensuring an honest interpretation of the results. I'll admit that I hear enough complaints from other marketers that Nate's report rang true. I certainly hear more disappointment than I do satisfaction (although the advertising tech companies are certainly biting back at this report quite a bit.)

Thanks for the critical dialog!