Web analysts Comscore have surprised everyone and said that placing an advert on the social networking site, Facebook, is actually an effective way to spend your advertising budget.
Facebook has been seeing a number of high profile exits from its customer base as companies like the car maker Ford said that it was not a good way to spend its cash.
A Reuters/Ipsos poll published last week showed four out of five Facebook users haven’t bought a product or service as a result of advertising or comments on Facebook.
Comscore’s report called The Power of Like 2: How Social Media Works, looked at paid advertising on Facebook as well as earned media exposure.
It said that most brand exposures on Facebook occur through users’ news feeds rather than visits to dedicated brand pages on Facebook.
Consumers who click a button that they like a certain brand or product tend to outspend others for that particular brand, Comscore said.
Using Target as a test case, Comscore studied two groups. The first was Target fans and their friends who ran updates about Target in their news feeds.
The second group was made up of Facebook users who weren’t fans of Target and saw no messages. Before the study both groups had identical purchase behaviour at Target.
However, fans who saw the messages were 19 percent more likely to buy goods at Target than the group that didn’t see a message. Their friends were 27 percent more likely.
Comscore conducted a similar study involving a national retailer. It looked at groups of Facebook users who were exposed to a paid online Facebook campaign about that brand, and a test group that was not. After a month, the group that saw the messages was 16 percent more likely to buy goods at the retailer than the group that did not see the messages.
But there are some problems with Comscore’s reasoning. It is hard to gauge how many people saw a particular ad, and connecting the message with purchases is even more difficult. Then there is the small matter that Facebook is a Comscore client and pays the company to measure advertising effectiveness.
Shares of Facebook are still hovering at $27, which is 29 percent below its IPO price of $38 last month.