On the surface, Facebook is an advertiser’s dream platform: You can target your audience by interest, geography, age or educational level. You can decide how you’ll pay for your ad -- by impression or click-through. And, while your ad runs, Facebook provides daily reporting so you can track your ad’s reach and effectiveness in real time.
Yet, despite the incredible scope and robust infrastructure, there’s not much data to suggest that, outside of a few notable exceptions, advertising on Facebook -- or any social network -- has led to significant sales.
“These networks are paradoxes,” says Wharton marketing lecturer and new media expert Steve Ennen. “Facebook reaches 500 million people, but that doesn't mean it will reach people who are interested in buying what you are selling.”
A social network’s strength, he believes, is in its ability to create clubs and groups around areas of interests, not to deliver revenues from traditional broadcast-like advertising. “Groups generate interest,” says Ennen. “But that's not the same as targeting someone who likes your product.”
The community aspect is part of the paradox, says Ennen. “It's not just the ability to identify those who seem likely to buy, but to play a part in a dynamic community.” It's about participation, not simply penetration. “The idea is that businesses need to engage in a community as more than just advertisers. They need to bring something of value.”
For example, Old Spice created a humorous ad campaign featuring actor and former pro athlete Isaiah Mustafa. “They started making short videos that became popular online,” says Ennen. “It was a viral success. It had a YouTube presence; it could be passed along and shared. It was user-generated content that propelled the message across different environments. It's active. And it's directly tied to an increase in sales. Old Spice was strategic. They allowed users to participate. The overall costs were minimized because the users did a lot of the work.”
On the other hand, Ennen says he sees a lot of static ads that whimper out. “Samsung was advertising a phone. They developed a Facebook fan page, the purpose of which was to stream online videos of commercials -- nothing of value to the users whatsoever. It was just ads running. There were 150,000 people who liked it, but nothing happened there. So Samsung stopped participating. Now they have this Facebook page on which nothing is happening. The company didn't care. The agency didn't care, so why would consumers care?”
The key, says Ennen, is for advertisers to ask themselves what they can bring to the conversation, either by being perceived as an expert or offering “something of value to the conversation,” he says. That's a shift in dynamics from traditional advertising. “Companies don't see the results they expect because they are taking a broadcasting mindset. It's a shift to a community mindset that will make advertising on social networks effective going forward.”