Should Facebook be Part of Portal Ad Mix?

Simon Baker

May 16, 2012

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One of the key strategic priorities for any property portal is generating strong traffic to the site.  Of course there are many ways of doing that however CPC is one that is favoured by many.  Traditionally portals have spent on Google to capture clicks.  More and more they are adding Facebook to the advertising mix.  However, while Facebook is the poster boy for the social media movement, does it actually deliver results to the advertiser?

A global survey undertaken by leading independent digital marketing agency, Greenlight, reveals 30% of people ‘strongly distrust’ Facebook with their personal data whilst 44% say they would ‘never’ click on Facebook sponsored ads, all of which indicates Facebook’s advertising programme has an upward struggle.

Greenlight’s global “Search & Social Survey (2011-2012)” asked 500 people – from students, law enforcement professionals, medical staff, accountants, lawyers to the unemployed, how they engage with online advertising, search engines, and social networks, in order to glean insight into how consumers engage with marketers today, and to formulate views on what the future might hold.

Facebook the third most popular website after Google and YouTube

As expected, 50% of respondents to Greenlight’s survey said they use Facebook for social engagement, sharing photos, and catching up with friends and family.

Facebook ranked as the third most popular website (after Google and YouTube) when asked ‘How regularly do you use the following websites/services?’. It ranked second when asked ‘Which of the following do you use on your mobile phone?’, with roughly 30% of those surveyed saying they use Facebook on their mobiles and tablets.

“Facebook’s popularity doesn’t come as a surprise. However, with over 30% of respondents saying they ‘strongly distrust’ Facebook with their personal data, Facebook’s advertising programme has an upward struggle,” says Hannah Kimuyu, director of paid media at Greenlight.  “Facebook’s advertising programme allows brands to connect with more than 800 million potential customers, through targeting their age, gender, location and interests, in other words – personal data.”

How much do you trust the following companies/brands with your personal data?

5252

Source: Greenlight

Should brands bother with Facebook advertising?

Asked ‘Do you click on advertisements or sponsored listings in Facebook’, just 3% of respondents answered with regularly and 10% often. The alarming response was the 44% that answered never.

Yet, does this reflect an advertiser’s point of view?

“For Greenlight and many other agencies and brands, advertising on Facebook has become part of the ‘usual mix’, says Kimuyu. We specifically saw our Facebook investment (client media spend) overtake both Yahoo and Bing collectively at the start of 2011, hinting the channel has constant growth and is delivering a strong enough return to invest more.”

Do you click on advertisements or sponsored listings in Facebook?

5253

Source: Greenlight

A Global Facebook Advertising Report compiled by TBG Digital in Q2 2011, examined 200 billion impressions across hundreds of advertisers in 21 markets. The study revealed that retail delivered the highest click through rate (CTR) when compared to other sectors.  Furthermore, retail saw the largest increase in growth, going from being non-existent in Q3 2010 to showing steady growth by Q2 of 2011 (a 36% increase).

“Pulling this study back to Greenlight’s client base, we have seen similar performance levels, especially with retail getting more from Facebook.  On average a CTR of 0.5% – 0.8% is considered positive, however retail brands typically achieve 0.8% – 1.0%.”

Kimuyu points out that similarly to Google’s Display Network (GDN), Facebook has spent the last 12 months developing its advertising programme, slowly moving from offering just branded advertising (Fan Acquisitions) to becoming a serious direct acquisition channel.  “Many of the developments are appealing to retail brands, especially with retail being the most active in the space.  Most recently we have seen one high street retailer achieve a 15% higher average basket value and a 20% increase in conversion rates on Facebook, when compared to its Search activity.”

So when is Facebook most effective?

The most popular and effective ad format is the Sponsored Story. The format delivers, on average, a 32% decrease in cost per acquisitions (sales) and an increase in CTR (engagement).

“When running both the traditional ad format alongside a sponsored story format, we tend to see at least a 30% increase in conversion rates, again with retail leading across the sectors,” says Kimuyu.

Kimuyu concludes:

“Although 44% say they would ‘never’ click on advertisements or sponsored listings in Facebook, it is interesting to see that those who do find the targeting effective and engaging.  Moreover, given the positive growth figures, we at Greenlight predict that more of us will be advertising and hopefully ‘clicking’ on an advertisement or a sponsored listing on Facebook this year.

So who is Greenlight?

Greenlight is a leading independent digital marketing agency, providing Search and Social Media services. With over 100 blue-chip clients including Santander, New Look, Sky and ghd, Greenlight is a leader in the digital marketing space, and is recognized worldwide for its commitment to delivering record ROI for its clients and investing in the future.

Greenlight is considered the premier thought leader in the sector, publishing widely read industry reports, original research, speaking at trade events, and delivering a highly respected digital marketing training programme via the Greenlight Academy. Founded in 2001, Greenlight is headquartered in London, with offices in New York. www.greenlightdigital.com

Simon Baker

May 16, 2012

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Acerca de Lucas Vargas:

  • Empezó en Grupo ZAP como el VP de Sales y en 2016 cuando la empresa tenía 60 empleados. Fue nombrado COO de VivaReal tomando el mando de Brian Requarth el Co-Fundador. VivaReal lanzó en Colombia y se trasladó a Brasil. En 2017 se hizo CEO del Grupo ZAP.
  • Ha trabajado en Mexico en PWC y en el Banco Santander
  • Tiene un Master de Business Administration de Harvard
  • En noviembre este año después de la fusión de OLX Brasil y Grupo ZAP fue nombrado el CEO del OLX Business Unit. Lidera la empresa junto con Andries Oudshoorn y Marcos Leite
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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.