Is A 0.014% Ad CTR Facebook's Weakest Link?

Courtesy of Bloomberg, we have our first impression of what advertisers' "efficiency" is for Facebook ads, and whether or not they will decide to use Facebook as an ad medium as opposed to a legacy wholesale advertising channel's like Google AdSense. Frankly, it does not look too hot: as the attached chart shows, the CTR on an ad campaign is a paltry 0.014%, or said otherwise 182,901 page views leading to... 26 clicks. Now of course, the amount paid for this exposure will be modest (although at $2.80 CPC this is astronomical compared to the likes of adsense), however the real question is what advertiser, for whom reader engagement, i.e., click thrus are important, will wish to subject themselves to this abysmal level of "interaction." it is probably no secret that for Google adsense, CTR is at least one order of magnitude higher. This also explains why anyone betting on the advertising model as being the primary driver of revenue growth will likely be disappointed. Naturally, there is the possible offset that the ad campaign was merely not engaging, or not that exciting, or not proper user targeted, but that is what Face Book is doing after all - it is trying to replicate adsense interest matching. So if Facebook is about ten times worse than adsense, just who will use it? We agree with Mark Gimein's conclusion, "Whether you’re a giant advertiser or a tiny one, you know exactly how much value you get from a Google placement. For us, it was just really hard to know what we were getting from our Facebook ads."

More from Mark Gimein:

For a brief period last fall, I was a Facebook advertiser. It came about like this: my fiancee, an artist, started a series of painting classes. Mostly she advertised by word of mouth, but as the term was about to begin there were still a few open spots. Like Google, Facebook has an extremely low barrier to entry for advertisers. It is almost as easy to advertise on Facebook as to sign up. You can start running ads with a commitment as low as a dollar. One buck.


The ad costs can be very low. Not just pennies but fractions of pennies for each time an ad is shown. We threw some numbers together in our heads. If only one in 500 people who saw an ad clicked on it, this was a great deal. Or even one in 1,000. And surely we could get those numbers, right? Especially with all of Facebook’s targeting options. We could target men, women, or certain age groups. We could (and did) use zip-code targeting to hit only people living in Manhattan below Central Park. Or those living close to the Metropolitan Museum. Or even men interested in painting who lived in East Side Manhattan zip codes.


Okay, that last one turns out to be a tiny group. But we tried that in combination with other small groups. We had ads with different images, and tried various text options. On most ads, we offered discounts. We even managed to (once) sneak an ad with an image of a painted nude through Facebook’s approval process. Even the nude didn’t make a difference. We didn’t get one viewer in 500 to click. You can see the numbers above. It was closer to one in 10,000. And frankly, judging from the fact that half of those who did click left the site within seconds, it’s pretty likely most of those were slips of the mouse.


For $72.80 we did get 182,901 ad views. If you lived in Manhattan and indicated an interest in any kind of art classes, you’re likely to have seen our ad. Actually, if you were in that group of one of our other carefully targeted sub-categories, you almost certainly saw it at least a few times. More likely, five or six. You just were very, very unlikely to click it.


That’s not necessarily a terrible result. I am sure others do much better. More important, click-thru is far from the only measure of an ad’s effectiveness. It’s very possible that those who saw an ad in the fall will hear from a friend about the classes my fiancee is teaching this spring and recall, “Right, those were the painting classes with the Facebook ads.” I get a kick out of the thought that many of our friends probably saw the ads out the corner of an eye.


I wonder, though, how much more value Facebook can squeeze out of this kind of advertising. Google’s strength was the combination of keyword targeting with easily measurable results. Whether you’re a giant advertiser or a tiny one, you know exactly how much value you get from a Google placement. For us, it was just really hard to know what we were getting from our Facebook ads.

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