Efficiency Problem of Facebook Marketing

The Efficiency and Effectiveness Problem of Facebook Marketing

With more than 800 million active users (“Facebook F8,” 2011), Facebook is currently the world’s most popular social network. The considerable number of audiences provides marketers with an ideal platform to post promotions and advertisements. Activities integrating marketing practices with Facebook features are referred to Facebook marketing. Statistics show that (Bullas, 2010) the number of Facebook Ads has passed the milestone of 1 trillion, which is a powerful evidence of the popularity of this marketing platform. However, the return of advertisements on this platform cannot entertain marketers’ expectation on account of several inferior mechanisms of Facebook marketing. This essay will analyze problems concerning the efficiency of Facebook marketing and present solutions to them. A conclusion will also be drawn.

Recent research (Bullas, 2010) indicates that the click through rate, which is a key metric of the response to an online commercial, of Facebook advertisement is only 0.05% on average, far below the figure of Google which is 8%. A possible reason of this enormous disparity is the conditions for the emergence of these banner advertisements. Though Facebook allows advertisers to deliver marketing information direct to their target audience according to age, gender and interest (Castle, 2009), the information is not so up-to-date that reflects the user’s instant requirement which users are willing to meet through reading advertisement. Little audience is attracted to click the link if the marketing information presented on users’ homepages cannot efficiently matches with their need. Without the delivery of advertising information through clicks, the effectiveness of such marketing practices is limited.

Another problem concerning Facebook marketing’s effectiveness is the existence of “click fraud” referring to deliberate clicks on sponsored links with the intention of malicious competition (Jansen, 2007). Facebook adopts a payment method named pay per click that advertisers are charged when a user initiates browsing that company’s page by clicking the link. Taking advantage of loopholes of this payment system, a company can intentionally click links of its competitors repeatedly so as to increase advertising expense. If the publisher cannot identify and prevent these behaviors, advertisers cannot achieve expected value matched with their unreasonably high cost and, therefore, would quit promoting via Facebook.

A possible means to increase the click rate of Facebook advertisement is to develop an efficient mechanism matching advertisements with the corresponding user’s demand. Comparing to Facebook, Google displays advertisements which are relevant to search keywords so that every piece of advertising information is relevant to user’s instant demand (Castle, 2009). Facebook users tend to express their interest to others through updating their own status and sharing other people’s events. Utilizing this characteristic, Facebook can collect keywords from user’s stories and match these keywords with related advertisements, provided that users authorized the publisher to gather their information for marketing use. Users will receive upgraded set of advertisement containing certain information they are currently seeking. In this case, Facebook marketing practices contribute to higher advertising value through attracting potential audience. Thus, the efficiency of Facebook marketing will be enhanced.

To alleviate the problem of click fraud, Facebook should develop a detecting mechanism to identify fraudulent clicks. One vital component of such system is an automated filter. Facebook should develop a detector to track possible signs for malicious clicks such as time patterns and IP address (Layton, 2007). When detecting suspicious clicks, the filter automatically reports these clicks as fraudulent clicks and separates them from normal ones for further investigation. Another essential component is human analyzing. Based on statistics and reports provided by the automated filter, administrators of Facebook advertisements should analyze the origin of these clicks to finalize the identification and implement the corresponding action. In addition, Facebook should investigate immediately when certain advertiser complains about irregular clicks. Restraining click fraud can protect the interest of advertisers by increase the return of their advertising investment, and thus enhance the effectiveness of this marketing platform.

To sum up, Facebook is not as effective and efficient as expected because of its poor advertising click through rate and click fraud issue. Facebook can enhance the effectiveness of marketing practices by developing a matching system to link up-to-date user information with advertisements and a powerful detecting system to control the existence of click fraud. From my perspective, Facebook generates most of its revenue through the marketing function, which prompts Facebook to improve the capability of this platform. To establish its dominance in the marketing field, Facebook should exploit the advantage of its nature as social media and create a dynamic ecosystem integrating marketing and social network. However, the ground of Facebook marketing’s success lies in its 800 million users, most of whom simply expect connecting with their friends from this website. Therefore, Facebook should esteem its valuable customers and serve them with infinite enthusiasm.
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References

Bullas, J. (2010). How Effective Are Facebook Ads. Retrieved November 5, 2011, Web site: http://www.jeffbullas.com/2011/02/25/how-effective-are-facebook-ads/
Castle, M. (2009). Advertising Efficiency of Google vs. Facebook. Retrieved November 4, 2011, Web site: http://smallbusiness.chron.com/advertising-efficiency-google-vs-facebook-29060.html
Facebook F8: Redesigning and hitting 800 million users (September 22, 2011). Retrieved November 3, 2011 from L.A. Times, Web site: http://latimesblogs.latimes.com/technology/2011/09/facebook-f8-media-features.html
Layton, J. (March 6, 2007). What is this click fraud that is costing Google billions. Retrieved November 4, 2011 from HowStuffWorks.com, Web site: http://computer.howstuffworks.com/click-fraud.htm
Jansen, B. J. (July, 2007). Click Fraud. Retrieved November 3, 2011 from The Pennsylvania State University, College of Information Sciences and Technology Web site: http://faculty.ist.psu.edu/jjansen/academic/jansen_click_fraud.pdf

References: Bullas, J. (2010). How Effective Are Facebook Ads. Retrieved November 5, 2011, Web site: http://www.jeffbullas.com/2011/02/25/how-effective-are-facebook-ads/ Castle, M. (2009). Advertising Efficiency of Google vs. Facebook. Retrieved November 4, 2011, Web site: http://smallbusiness.chron.com/advertising-efficiency-google-vs-facebook-29060.html Facebook F8: Redesigning and hitting 800 million users (September 22, 2011). Retrieved November 3, 2011 from L.A. Times, Web site: http://latimesblogs.latimes.com/technology/2011/09/facebook-f8-media-features.html Layton, J. (March 6, 2007). What is this click fraud that is costing Google billions. Retrieved November 4, 2011 from HowStuffWorks.com, Web site: http://computer.howstuffworks.com/click-fraud.htm Jansen, B. J. (July, 2007). Click Fraud. Retrieved November 3, 2011 from The Pennsylvania State University, College of Information Sciences and Technology Web site: http://faculty.ist.psu.edu/jjansen/academic/jansen_click_fraud.pdf