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Forbes: Is Facebook's Credibility Eroding?

August 1, 2012

By Patrick Hanlon, Forbes

There has been lots of discussion in the last few weeks about the case for advertising on Facebook.

However, two events in the last 48 hours have become cause for pause.

Canadian publication Maclean’s this week announced a study from the Advertising Research Foundation in New York City. The article states the respected Foundation recently tested a “blank” on Ad Networks whose click-thru rate performed only .01% less well than regular ads.

(By another measure, the blank ads performed 60% better.)

The ARF’s research director, Ted McConnell, is the former manager of digital marketing innovation at Procter & Gamble.

In an email, Ted McConnell cites a correction from an earlier posting of this article: “The Blank Ad was trafficked on Ad Networks, as reported in the Ad Age Story, not in Facebook. Facebook was not mentioned in the story. I doubt if FB would have accepted a blank ad,” cites McConnell. “Further, from a research standpoint, we also reported that we trafficked a Blank, not an ad, [the earlier post stated the object was a blank ad rather than blank] so the results were about whether attribution models might suffer from mistake clicks at very low low click rates.  We think that the presence of a display ad is a signal to a user that they have the opportunity to navigate, whereas a click on a blank is a click response to no signal at all. We also reported a variance by site so that no conclusion could be reached about any particular site.”

“In any case, it would be incorrect to make any conclusion about Facebook  from the standpoint of context and ad format is very different from most publishers. [The study] was intended to discover what risks there might be for those who use very low click rates as a surrogate for attention to advertising.  For the record, I believe that display advertising, well executed, works well, in degrees that vary by audience and context quality, as is true with all advertising,” concludes McConnell.

In related news, a Facebook advertiser named Limited Run—a start-up that develops e-commerce platforms for musicians and labels, announced they detected that only about 20% of their clicks actually lead people to its website (they also pay for the 80% that don’t lead to their site which is the problem). This story was in PC World.

Whatever explanations Facebook may have for these hoped-for anomalies (we hope they are anomalies and we assume FB hopes so, too), we hope Facebook can calm the growing disquiet that began with GM suddenly pulling its Facebook advertising a few months ago.

In the last century, when advertisers placed television campaigns on television, they were never exactly sure how many eyeballs they reached. Rating services took test samples in various markets across the nation and extrapolated reasonable numbers. These numbers were based upon hard statistical data (there was always room for variation and people who got up to go to the bathroom during commercial breaks were never measured).

But, importantly, while the numbers were first seasoned with math, they were also given huge dollops of trust. If FB wants advertisers to “Like” it, the company must realize that it’s always easy to get the numbers. What’s not always easy to sustain the trust.

As seen here: http://www.forbes.com/sites/patrickhanlon/2012/08/01/is-fb-becoming-bs/

 

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