Is Facebook Really Worth It For Your Business?

17 Jan No Comments
A recent article in the LA Times indicated that a startup called Limited Pressing discovered that up to 85% of their Facebook ad clickthroughs were from bots not actual people (yet FB of course charged them for each one anyway). They discovered this by a fairly well-known method. By using a log file analysis tool (I use AW Stats for this), they were able to find out from the actual log files where the visits came from. They discovered that a high percentage of the visits were from sites that had disabled Java–a much, much higher percentage than the normal one or two percent. Further investigation of those visits revealed them to be from bots that simply crawl the web and make false visits to sites. The technical part of this is really easy to understand: the log files reveal nonhuman, non-browser traffic. Tagged pages hit by bots will never appear in analytics reports but unfortunately they will appear on your bill from Facebook (or other ad serving outifts–it isn’t just Facebook doing this). The same article cited another startup company complaining of a similar ratio. In a separate but related note, a recent peek at the Facebook page for MSNBC’s Chris Matthews’ Hardball show reveals a fair amount of scathing comments that just don’t seem to be much help to the brand. And maybe that’s because the page is poorly managed, or maybe because they are honest and don’t keep people from saying what they want. Let me make it clear I have long been a Facebook skeptic and believe moreover that its stock price, even as it tanks, is still overvalued. Let me also say that Facebook is a great venue for big brands with hundreds of thousands, even millions of followers where they can learn likes and dislikes and do very low cost product research using the big ‘Book.

But does that mean your business benefits from it?

No, it does not. With evidence that much of the traffic is sham traffic, that likes are not sales, that mobile conversions are poor, and that Facebook is a company not a platform (whereas the Internet is a platform), it seems like Facebook is only a moderate, occasional win for certain kinds of businesses.

Lets try to remember why this is.

Facebook’s DNA is akin to that of a college yearbook. It is for people (people) to share pictures and thoughts about themselves. It’s free and people love to share their lives with others and some would say a billion users can’t be wrong. And they’re not. But they are also not generating revenue for Facebook, at least not by performing all the core activities Facebook offers. And they are also, with rare exception at the very top of the food chain, not generating anything like an ROI for businesses. Because they are not clicking on enough ads. Can Facebook help you understand your demographic? Yes. Listen to your customers? Of course. Should you shut down your Facebook page? Well, maybe Hardball should but you can only know this for yourself. Do you spend a great deal of time and money managing it? If so, why?

Should you buy advertising on Facebook?

The answer is not clear. But what is clear is that you should monitor it very carefully. And you should not pay for robot clickthroughs. And then you should evaluate whether its really the right venue for your business. My take on it is that it’s far from an automatic “yes”.  

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