Facebook and the old fake bagel company trap

The effectiveness of advertising on Facebook is being called into question once again following revelations from the BBC that its ‘VirtualBagel’ experiment, an imaginary business that tech reporter Rory Cellan-Jones started in a bid to test it, received 3,000 ‘likes’ within four days, despite the fact that it offered no products or interesting content. 

According to the BBC, almost all “likers” came from India, Egypt, Indonesia and the Philippines, many of them ‘social spammers‘. And what was most notable was the almost virtual absence of the US or UK, two of the most valuable markets for advertisers. 

When adjusted to target just UK, the number of people liking the page dropped considerably. The click-through rate (CTR) fell to just ten percent of the previous level.

Facebook claims lack of interest in a targeted market is often the result of poor targeting of adverts and Greenlight, a UK-based independent digital marketing agency, agrees. 

“For Greenlight and many other agencies and brands, advertising on Facebook has become part of the ‘usual mix’”, says Hannah Kimuyu, director of paid media. “We specifically saw our Facebook investment (client media spend) overtake both Yahoo and Bing collectively at the start of 2011, hinting the channel has constant growth and is delivering a strong enough return to invest more. Furthermore, with Greenlight’s client base, we have seen strong performance levels, especially with retail getting more and more from Facebook.  On average a CTR of 0.5 percent – 0.8 percent is considered positive, however retail brands typically achieve 0.8 percent – one percent.” 

Kimuyu points out that similarly to Google’s Display Network, Facebook has spent the past 12 months developing its advertising programme, slowly moving from offering just branded advertising to becoming a serious direct acquisition channel.  

“Many of the developments are appealing to retail brands, especially with retail being the most active in the space.  Most recently we have seen one high street retailer achieve a 15 percent higher average basket value and a 20 percent increase in conversion rates on Facebook, when compared to its search activity.”

Facebook has had some wins and some losses recently, with GM pulling paid advertising but other big brands like Coke and Ford coming out in support of the platform. It also released some research to try and silence a few doubters that showed the combined effect of paid and earned media on spending behaviour. 

But debate is still raging over the value of a like, as evidenced by some of the comments on the story about Skinny Mobile’s advocacy first, awareness next strategy. Value depends on what you’re measuring, of course. And as one commentor commented, linking to this article on the topic, ”there is no standard answer, essentially because there is no standard question”. 

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