Let’s Talk About “Commerce” on Facebook, Not Impressions or Branding but SALES

This post was written in response to Facebook Commerce – Does it work?, a post promoted on Social Media Today.

social media today, facebook commerce

This post is off target, in my opinion. I was interested in the “commerce” part of the title and what we get in the post is little more than an outline of how Facebook “commerce” is really more like a billboard along the social media super highway. And that’s why Facebook PERFORMANCE is so anemic. I mean sure, we get millions of impressions rather quickly, but the CTR (click through rate) tends to be in the 0.020% And that’s not just my advertising campaigns, that’s how it is reported by eMarketer for results in late 2010.

So commerce is about selling. Billboards are, for McDonalds and other HUGE brands, about BRANDING. As you mention, they are not trying to show you every item on their menu. But there is also no button on the McD’s ads on Facebook to BUY a big mac. So there is, in fact, zero commerce.

We’re trying some ideas that might activate the viewer without them having to click on the facebook ad to make the transaction. (eg: a 800# in the ad itself) But still the numbers are horrible for “commerce” for everyone using facebook.

Why do we do it? To test messaging very quickly to a consumer audience. Because if you can move the needle up off the bare floor on facebook, then perhaps your message is ready for primetime and for you to put some money behind it on other online sites that actually drive commerce.

UPDATE 4-15-11 the story continues: An additional comment I filed on the SocialMediaToday page regarding facebook commerce.

Brian, I find your comment a bit confusing, “Facebook Commerce will be a huge success, and already is for many companies that understand how to use the social channel to build a groundswell with what people are doing there already.”

What “many companies” are you referring to? And what is the success you are attributing to their facebook ads? The topic of conversation was supposed to be “commerce.” And unless I misunderstand the definition, commerce is about sales, roi, dollars transacted.

So saying facebook is a huge success is an understatement. But “building groundswell” is a very social term but is rarely equated to commerce. And everything is potential, every eyeball, every passing click, but most of that (the 99.98% of all impressions on facebook) results in zero action. Nothing. Nada.

Groundswell? Hmm. Did facebook really play a role in Egypt, or could it have as easily been AOL, or a BBS system? Can McDonalds create a groundswell for Big Macs? Or is their purpose more to point exploit the recent shaming news about Taco Bell’s meat being only about 48% actual meet? Not a single click to buy order from McDonalds off Facebook, but commerce is not the direct intention of that ad. Brand is. Big difference.

[won’t you join the conversation here on or the social media today page?]

@jmacofearth

Forrester Report April 7, 2011, Will Facebook Ever Drive eCommerce?, Demystifying The Hype For Retail eBusiness Executives by Sucharita Mulpuru

“In spite of the fact that hundreds of millions of people around the world have Facebook accounts, the ability of the social network to drive revenue for eCommerce businesses continues to remain elusive. eBusiness professionals in retail collectively report little direct or indirect benefit from Facebook, and social networks overall trail far behind other customer acquisition and retention tactics like paid search and email in generating a return on investment. For some companies and brands, Facebook promises to support branding and awareness (i.e., “top of the (marketing) funnel”) efforts, but for most eBusiness companies in retail, Facebook is unlikely to correlate directly to near-term sales.” [Full Report is $499.]

UPDATE: Here is a FastCompany story about the Business of Facebook.

 

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This Post Has 4 Comments

  1. I can tell you from experience that Facebook can work and does work if done right. What do I mean by right? Well, it is like anything in marketing, many marketers think if they hang up a shingle or just throw something out there in the form of an ad or a communication, they should see some ROI. Well, you probably will, but not what you were hoping. It amazes me how many big companies with smart marketers in them, forget many marketing 101 concepts when approaching new media (and old). People still have to want what you are selling. It still needs to be relevant to the market or audience you are targeting. Facebook is no different. Yes, it is a great place to get friends to recommend to friends. Yes, it is a great place to be a billboard on the busiest highway in the superhighway structure. But if they are not in the mood for a burger, they are not pulling over at McDonald’s no matter how big their billboard is. However, that should not stop you from going after all those hungry people that are in the mood for a burger. Facebook has an incredible way to target. You can narrowcast on Facebook and it should be used. No one should just stick up a page on Facebook and expect it to fill up with “likes.” This is not the Field of Dreams. Just like any campaign, it should be multifaceted. If you put up a page, use the Facebook ads to target in on your customers to get them to come to your Facebook page, or wait, maybe even directly into your store. I just did that over a six month period of time at a very large computer company in Texas. By targeting and giving people what they wanted based on what we knew about them, we were able to increase our relative ROI from $.25 on the dollar to $4 for every dollar we spent. Now, there was a learning curve, and our dollar amounts started low as a test, but then as we honed and achieved better results, we were able to turn great results. In just 104 days we were able to increase our overall results by 12 times. Drive more than 600 million impressions, 200K clicks, and $500K in revenue. If marketers stop being mystified by new media and apply the basics, it is possible to sell on platforms like Facebook.

    1. Nice stats Robert. I can only imagine who that customer is. Well Done. Your numbers are WAY over the average.

      1. Thanks John. I think you might know the computer company I am talking about fairly well. 🙂

        It was amazing how when we stopped casting out a huge net saying “buy something” and went more down the route of “Hey Military member, get a special price on this military game and super powerful system” how much the ROI changed. In social media it is even more important to act like you know your customer as most everything and everybody they interact with in social media is someone or something they “know.”

        1. Yep, I noticed the change on the advertising too. Nice to hear it worlked.

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