Success is a .07% Click Thru Rate??

Facebook, the current darling of Wall Street, is being hammered in the stock market today, down some 10%+ based on their earnings just released.  Why?  Simply put — because their sales were lower than expected.  I think I know why.

In a recent article on Mediapost titled: “Is Clickthrough Rate Still A Good Measure For Success?”, in the body of the article is the punch line from recent Facebook Ads engagement data:

“More statistics emerging on Facebook advertising statistics. I still am baffled that marketers are so lathered up about them. POINT-ZERO-SEVEN percent CTRs?”

I have to admit I am too. The writer went on to talk about “a program last year that generated a 14% conversion rate” (now that’s not bad). The friend/experts response was even better:

“…Don’t doubt there are some instances. But when the CTRs are on average that low, I can’t fathom why a medium or small business would even try…..”

What is interesting about this remark is that in their recent earnings call, Facebook COO Sheryl Sandberg offered that sales to local SMB’s were “… the holy grail of the Internet” and that Facebook is uniquely positioned to capitalize because of the 7 million businesses that market from their Pages each month.

I turned to the fountain of all knowledge on the web for another comparison point, Wikipedia, to get this gem about CTR’s in general:

The average click-through rate of 3% in the 1990s declined to 0.1%-0.3% by 2011.  Since advertisers typically pay more for a high click-through rate, getting many click-throughs with few purchases is undesirable to advertisers….”

Gee, you think so?

Someone help me out here.  If CTR’s are less than half a percent, why would any SMB spend money on Facebook when even a direct mail campaign would bring better responses for the targeted area that business is after???  Has a sub-one percent response rate become the new definition of an “effective” advertising campaign on the Internet?

And people say print Yellow Pages is irrelevant these days?  Seriously?



One response to “Success is a .07% Click Thru Rate??

  1. Excellent insight to a whole new type of objection that yp reps sometimes struggle with. Everybody has those calls where “we only do Facebook.”

    Being at an independent publisher in a small/medium market, local businesses seem to think that Facebook will be some kind of savior for struggling small businesses. We actually had a client pull their yp menu with us with no warning to go “strictly Facebook”. It was an Italian restaurant that was very loved within the community. However, as much as everybody loved them, they were out of business in literally only a matter of months.

    It is amazing to see the actual numbers start becoming so public. With the move that GM made, I’m sure we will see more to follow. They are GM, folks. If they cannot find a reason to be there, how could a SMB possibly make it work?

    As my father said, “If it doesn’t work on paper, it doesn’t work.” Facebook is very alluring for SMB owners, and there are many independents/firms popping up to capitalize on this. However, if you put all your money in MySpace years ago, what would you have now?

    The best thing we can do is to properly educate our clients and strive to be as well-rounded as we can be, with vast knowledge of all forms of advertising that seem to be popping up everywhere.

    Excellent article. Invaluable information for reps everywhere. Thanks!


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