Facebook Has Passed The Tipping Point in Brand Advertising

I believe Facebook has reached the tipping point in the last three months. The results we are seeing on the most recent advertising buys on the network are very impressive. Let me explain.

  • We recently ran a campaign for a client on paid search and on Facebook. The client is a technology company. The campaign was designed to drive visitors to a specific landing page designed specifically for the campaign. The campaign was run in seven countries – Argentina, Indonesia, Malaysia, Mexico, Philippines, Thailand, and the U.S.
  • In the past, we would get very low CTRs (click-through rates) on decent, but not great impression counts. The CTR rates were “display like” – in the .02 to .04% range – compared to search results in the 2 to 5% range. Essentially, a two-order of magnitude difference. Facebook would deliver more impressions, but not so much to overcome the CTRs and deliver noticeable, significant inventory.
  • With this recent campaign – we saw 100X the impressions delivered on Facebook as we saw delivered through paid search on Google, Yahoo and Bing during the campaign run. The CTRs were still a two-order of magnitude below the search CTRs – essentially, for the same $1, the same number of clicks were delivered. We have not seen this before.

The key point, however, is that the inventory available on Facebook is huge and growing. On a dollar-for-dollar basis, Facebook and Google are performing the same on this particular campaign. However, when the budget was ramped up by 10X, the statistics did not degrade in any way. For 10X the spend, we delivered 10X the results – with no end in sight.  With Google performance often gated by the ability of a brand to build brand awareness and drive visitors to the search engine – Facebook seems to have accelerated growth in its inventory.

And, it is not just the U.S. As stated above, we saw results in seven countries. Facebook was consistently strong – and, in fact, even stronger within APAC countries.

The issue that I am asked over and over is: Where should the budget come from to pay for Facebook campaigns?For now, social media investments remain small enough that they are usually financed through incremental media budgets – and not really “taken” from any established media.

The question is – as social media spending grows, will it come from paid search or from display. I believe it will come from both digital media allocation growth and from display. It will not come from search.  Search is still performing. Facebook is performing too – better than display and comparable to search.

This note is not an indemnification of paid search. Rather, it is a recognition of the powerhouse that is Facebook. It has passed the tipping point and is delivering truly big time inventory, at comparable pricing to PPC, and with display-like CTRs.

ACTIONABLE INSIGHT #1:
Facebook must become a part of any branding campaign. It is delivering huge inventory volumes, with solid conversions. And, the performance is even stronger in APAC compared to search.

ACTIONABLE INSIGHT #2:
Marketing spend for Facebook will increase rapidly in the next 12 months – budget allocation should come from current display budgets and from incremental digital budgeting.