Facebook Advertisers Shun Sponsored Stories: Report

Sponsored stories are still not being used by 55 percent of advertisers on Facebook, according to a recent study by social media marketing outfit Social Fresh.

Social Fresh released an new survey of 347 Facebook advertisers, “The 2012 Facebook Ads Report.” Here are some of the major findings, along with my commentary.

The company found that the most common purpose of Facebook advertising is to raise awareness.

Some of the most interesting findings in this report include:

  • One third of advertisers are not split-testing at all. They are testing ad creative and ad targeting almost equally, but only one-third are split-testing landing pages. That’s bad. In my experience, landing pages from Facebook ads can perform very differently. You should test at least one alternative.
  • Most ads have high-performing life spans of two weeks or less. The best results occur in the first three days, but most advertisers run their ads longer than that. The report advises against this, but my experience is that some of my best ads are viable for weeks. Life span depends on the ad and size of the target audience. If you have the time, treat ads as individuals. Refresh them when their performance declines.
  • 55 percent of advertisers aren’t using sponsored stories. Not so good: About a year ago, another study showed that many multimillion-fan pages were reaching fewer than 100,000 of their fans daily. The declining reach of many fan pages and Facebook’s emphasis on its Reach Generator product suggests that you may need to start using sponsored stories. Most fans don’t return to the pages themselves. The more you focus on timeline right now, the more you’ll spend on ads in the future. Focus on posts that get interaction, and keep the less interactive fans aware of your posts with sponsored stories.
  • Return on investment and analytics are the biggest challenges faced by Facebook advertisers. Both sales and tracking are still problematic. It’s impossible to tell the quality of their analytics, however, and whether this is in part the cause of the ROI issues. Campalyst, which offers great Facebook post integration with Google Analytics and Adobe, will soon debut better Facebook ad tracking.
  • Advertisers favor some ad criteria and neglect others, so you may find competitive opportunity in trying some of the less frequently used criteria like workplace, relationship, and education. B2B and higher education marketers may find this inspiring.

How are Facebook advertisers doing with cost per click?

  • The overall average CPC was $0.80.
  • 83 percent of advertisers use CPC bidding.
  • Working with a Facebook ad representative requires a spend of more than $10,000 per month but only decreases your cost per click by 6 percent.
  • Sending Facebook ad traffic off Facebook correlated with a 50 percent higher cost per click ($0.70 CPC on Facebook, $1.08 off Facebook). I wonder if this may be complicated by other factors — the highest click-through rate and lowest CPC ads I’ve ever seen were fan-growth ads with like buttons. If the ad traffic to tabs were compared to ad traffic offsite, I wonder if the results would be different. I asked Social Fresh Founder and Chief Executive officer Jason Keath these questions, but did not hear back by the time this article was published.

More about the advertisers in this survey:

  • These advertising professionals on average had 8.3 years of marketing experience, were 34 years old, and had two years of Facebook ad experience.
  • Most Facebook ads are self-serve, and 79 percent of these advertisers use the self-serve “marketplace” ads. Only 21 percent use premium ads with the help of a Facebook representative.
  • Only 15 percent use ad-management software. I’m a big fan of optim.al’s multivariate ad testing platform. It has helped me lower CPC by one-half, at times.
  • Only 30 percent of these advertisers are with agencies. Agencies had achieved the best CTR results (although freelancers like myself were not broken out into a separate category — I’m curious about that!).
  • A surprising 9 percent are with PR agencies running Facebook ads. I was surprised it was close to 10 percent because most PR people I’ve spoken with dislike ads and claim that their clients don’t have budgets for ads. But they’re an amazing way to increase awareness of whatever message you’re trying to spread.
  • Only about one-third use third-party analytics.

Get the full report here.

Brian Carter is the author of The Like Economy: How Businesses Make Money with Facebook, and the forthcoming LinkedIn for Business: How Advertisers, Marketers, and Salespeople Get Leads, Sales, and Profits from LinkedIn.

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