Facebook is failing marketers.
I know this statement sounds remarkable, perhaps even unbelievable. After all, you offer marketers access to the largest audience in media history and you know a remarkable amount about each of your users. As a result nearly every large company now markets on Facebook. Last year your company collected more than $4 billion in advertising revenues.
But while lots of marketers spend lots of money on Facebook today, relatively few find success. In August, Forrester surveyed 395 marketers and eBusiness executives at large companies across the US, Canada and the UK — and these executives told us that Facebook creates less business value than any other digital marketing opportunity.
Why are business leaders less satisfied with Facebook than with any other digital tool? We believe there are two reasons.
First, your company focuses too little on the thing marketers want most: driving genuine engagement between companies and their customers. Your sales materials tease marketers with the promise that you’ll help them create such connections. But in reality, you rarely do. Everyone who clicks the like button on a brand’s Facebook page volunteers to receive that brand’s messages — but on average, you only show each brand’s posts to 16 per cent of its fans. And while your company upgrades its advertising tools and offerings monthly or more, you’ve done little in the past 18 months to improve your unloved branded page format or the tools that marketers use to manage and measure those pages.
Second, your company isn’t good enough at the pure advertising business onto which you’ve shifted your focus. We estimate your site now delivers tens of billions of display ads every day. But fewer than 15 per cent of those ads leverage your ever-growing cache of social data to target relevant audiences.
And your site’s static-image ad units offer marketers less impact per impression than they could achieve with the ad units other sites offer. The result? The executives we surveyed said Facebook’s display ads were significantly less effective than the display ads they buy elsewhere online. They also reported that Facebook ads were less valuable than any other marketing tactic they could use on your site.
I believe there’s still time for Facebook to refocus its efforts and realize its enormous potential. To do that, you’ll need to once again build bridges between companies and their customers, you'll need to fully leverage social affinity data within your ad targeting products, and you'll need to better listen to the marketers who drive your company’s financial success. But you must act quickly, before more marketers act on their growing dissatisfaction and start earmarking an increasingly smaller budget share to your company. I hope our research convinces you and your team to change course.
Nate Elliot is the vice president and principal analyst serving interactive marketing professionals at Forrester.