POV: Will Facebook Eat into the Ad Shares of Top Sites?

By Kapil Ohri , afaqs!, New Delhi | In Digital | April 15, 2011
Users are spending more time on Facebook (FB) compared to other top sites like Yahoo!, MSN, Rediff or Google. Will this provoke advertisers to put more money on FB?

Rajnish R
Founder, Althea Systems

When we launched the ad campaign last year, we put equal amounts of money on Google AdWords and Facebook for cost-per-click (CPC) campaigns. The Facebook campaign gave better RoI. We got 10-15 per cent lower CPC and 20 per cent more registrations from Facebook than Google, in a month.

A good CPC campaign on Facebook could get a click-through-rate (CTR) of 2-3 per cent -- comparable to the best AdWords campaign. I think FB uses real-time customer click-through data to spread ads. For example, if I click on XYZ ad (on FB) to land on XYZ's FB page, I will be asked to click on the 'like' button. FB then uses the combination of 'click-through' data and 'like' data to target my other friends and show them same 'XYZ ad'. As more friends click on 'XYZ ad' and its 'like' button, the CTR will improve.

Neville Taraporewalla
Director, MS Advertising

While Facebook has good targetting capabilities, it faces the challenge of creative limitations in execution -- small banner sizes, for instance, work against benefits that rich media targetting offers.

Further, large ad formats would be intrusive in the social environment of 'conversations'. Brand metrics to measure RoI and the efficiency of 'likes', 'shares', 'fan pages' and 'events' are still evolving with benchmarks that need to be set. Privacy is also a big concern.

Brand owners need to be aware that small formats, tiny images and peripheral placements on the page don't allow them the flexible and impactful creative palette they need for a true brand advertising. So, while Facebook might have a slight edge, the marketer is smart enough to know its limitations. Portals such as MSN provide huge RoI by helping build a long-term engagement.

Ratish Nair
Co-founder, Ad Magnet

Just as Google created a new channel called 'Search', FB created one called 'SociaL', and ensured that the total size of the digital pie increased. All the top display media properties including ad networks, video and portals as well as Google search have shown double-digit growth in revenues between 2009 and 2010, proving that FB is not taking revenues away from other channels.

FB -- and social media -- will be used in a way that is different from search or display. It will be more 'relevantly' targetted. While there might be some money that may move to FB from display advertising, the move will be more from the direct marketing budget. Consumers are using platforms like FB to do things for which they used other platforms (e-mail) in the past.

Advit Sahdev
Founder and CEO, ODigMa Consultancy

The average CPC bid on an FB ad has increased by up to five times in the last one year. This is a clear indication of the demand for FB ads among advertisers. Some comparisons:

FB ads versus search ads: CPC and cost-per-lead (CPL) is less on FB (up to Rs 40) compared to ads (Rs 150) on prominent search engines. Unlike search engines, where keywords related to domains like travel, finance and luxury goods are priced high, there is little price disparity in the average CPC bid offered by FB for categories.

FB ads versus display ads: FB offers targetting opportunities based on gender, age, date of birth, location, occupation, education and company. With innovative concepts like FB Places, 'Check- in' ads and 'Social Ads' (suggested stories), FB is set to explode.

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