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Why Are Ad Click-Throughs On Facebook So Bad?

Facebook may be the hottest thing without the name iPhone, but ads on the social networking site are not. According to a post on the "Welcome to Reach Students Blog," ad click-throughs on Facebook are pretty low, even with precise targeting. Why are ads on Facebook flopping?
Facebook may be the hottest thing without the name iPhone, but ads on the social networking site are not. According to a post on the "Welcome to Reach Students Blog," ad click-throughs on Facebook are pretty low, even with precise targeting. Why are ads on Facebook flopping?Here is a look at a series of campaigns on Facebook:


We've run four targeted campaigns this year using its flyer ads, and each time the results have been disappointing.

Our most recent campaign saw 1.4 million page impressions delivered at specific universities - and only a 0.04% clickthrough rate. Ouch.

When we first experienced poor results earlier this year we looked carefully at creative and planning. Further experimentation saw a variety of quite different offers and creative approaches. What kept us going was the fact that others had anecdotally mentioned good returns from Facebook ads.

Yet our results did not improve.

It seems the guys at Reach Students aren't alone. Valleywag reports similar ad performance issues with Facebook:


So Facebook, which has been letting people know it's on track for $150m in revenues in 2007, must be an awesome advertising platform. Well, sorry to rain on the parade, but no. Media buyers -- the agency people who book campaigns -- report that the college social network is a truly terrible target. They're mainly students, with low disposable income, of course; but, beyond that, the users appear to be too busy leaving messages for eachother to show much interest in advertising. Facebook's members appear indifferent even to movie advertising aimed at their demographic. Clickthrough rates, the percentage of time users click on an ad, average 0.04% -- just 400 clicks in every 1m views -- according to one report seen by Valleywag.

Marketers have leveled similar complaints against MySpace, but even MySpace's ad performance -- clocking in at around 0.10% -- far outpaces these numbers.

While I don't have a definite answer, I have a theory. The primary users of Facebook are college students, or the infamous Gen Y. This is the generation that was raised on the Web and, if we are to believe reports from many of the leading Web gurus, they don't respond to interruption advertising.

Most agencies still use banner advertising on the Web. Of course, they also use AdWords and other forms of contextual advertising, and I am sure some of these poor performing ads were text links. Plus, Facebook is supposed to offer this amazing contextual ad program. And context isn't the same as interruption, right?

No. I think context could be just another form of interruption advertising, especially for the generation as Web savvy as this one. What if contextual advertising is just as doomed as old-school banners with the younger generation, especially with the college-oriented, career-bound segment of it that Facebook targets. Seriously, what if Gen Y treats contextual ads the way you and I treat standard Web ads? What if they're already callous to context? This is a distinct possibility I don't see many marketers talking about.

The poor ad performance on Facebook -- and the lackluster ad performance on MySpace -- could the first signs of this.

What do you think? Why are ads on Facebook performing so poorly?