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?