Earlier this week, Facebook's Brad Smallwood spoke at the IAB MIXX Conference in New York... and said something pretty startling for a bunch of data-driven marketers like us.
Clicks don't matter.
Wait, what? According to Todd Wasserman's recap on Mashable and a blog on Facebook Studio that recaps the talk, marketers are focusing too much on clicks to measure the effectiveness of their Facebook campaigns, and not enough on two far more critical metrics -- reach, and frequency. Let's dive into this a little bit more, shall we?
The "Clicks Don't Matter" Argument
The argument Smallwood makes is that clicks help marketers measure campaigns, but they don't drive any actual value. So basically, marketers are getting really good at measuring how seemingly invaluable their Facebook ad campaigns are. That's a bleak picture to paint.
Actually, Smallwood cited research from Nielsen in his talk that showed a 0.07% correlation between high click through rates and sales. He also cited data from Datalogix that 99% of sales generated from online branding ad campaigns came from people who saw ads, but did not click on them.
As a result, Smallwood recommended marketers focus on three things:
- Impressions - Getting your brand out in front of consumers is valuable to marketers and generates actual sales, per the data cited above.
- Reach - According to the Facebook Studio post that recapped Smallwood's talk, much like a TV ad, online ads -- and by extension Facebook ads -- deliver "on average a 70 percent higher return on investment."
- Frequency - You need to establish the right frequency of people seeing your ad so you hit a "sweetspot" for each campaign. For example, marketers might want to reallocate high frequency impressions to the people seeing too few impressions -- they said those that did this saw a "40 percent increase in ROI with the same budget."
Hmmm... I kind of see what he's getting at with the focus on reach and frequency. I mean, you can't argue that the right reach and frequency don't play a huge part in the effectiveness of any marketing or ad campaign. But it's hard to get on board with the "clicks don't matter" mindset, especially as a marketer that needs to prove ROI down to the dollars and cents. So, I decided to sit down with Amanda Sibley here at HubSpot who manages our own Facebook ad campaigns to get her take on the subject of whether Facebook clicks matter, or not.
When we're measuring our Facebook ad campaigns, do clicks matter?
Yes, clicks do matter. Blog post over.
Haha, just kidding. But one of the reasons clicks matter is that there's two things we're looking at -- the number of clicks, as well as the engagement. We're interested in both.
If it's good enough for Google -- this whole focus on clicks, I mean, -- can't it be good enough for Facebook?
Actually, I think that's part of the problem. People "grew up" on Google PPC, so when Facebook ads came along, they thought of measuring clicks in the same way. But Facebook has a high number of impressions, so your click through rate is going to be smaller. That doesn't mean your ads aren't effective, though. There's also a lot of controversy from Facebook users, saying they don't want to see ad posts in their news feed, but in Google you expect those ads -- you're on Google to look at precisely those things, whether in the organic results or the paid. But on Facebook, people could be there for myriad other reasons.
What other metrics should marketers be looking at on Facebook aside from clicks?
Like I said, engagement rates are very important, along with cost per click. We also look at the cost per lead, and I think that metric is what's most important, because we do a bunch of different campaigns -- from ad campaigns to Sponsored Stories. And since they all have different results and metrics that tell the story of whether they're successful, at the end of the day the cost per lead is the best way to determine whether we're seeing ROI.
Could you give me an example? For instance, how would you measure whether your Facebook Sponsored Stories are working?
Sure. So if we take our Sponsored Stories as an example, we like to look at our engagement rate there. If we can do less work (spend less, and get more leads) we're going to focus on that. And that's what we're seeing so far with Sponsored Stories, by the way, which makes a lot of sense -- the content is more relevant to people since it's related to what their friends are interested in. I also think the element of social proof with the posts has been really helpful.
So in that case you just described, clicks really wouldn't matter?
Not exactly. In fact, Sponsored Stories actually see 2-4X higher CTR than our other Facebook ads. And that CTR matters, even when engagement is a primary metric we track for Sponsored Stories. It matters because it's another indication that I'm doing less work and getting more people interested with what I'm doing.
Let's take the metric of reach as another example. Reach matters a lot to me when I'm looking for volume. For example, let's say an ad I put out got 10,000 clicks, and the Sponsored Story got only 200 clicks... but the Sponsored Story had a much higher conversion rate. That will cost me less in the long run because they are more likely to become a customer. But if I'm looking for volume -- quantity, not quality -- then I'm going to look at reach.
Basically, reach is important, but click through rate isn't dead.
Any final thoughts on how marketers should interpret Facebook's remarks?
I think that low click through rate makes marketers really discouraged. On the other hand, big reach makes marketers look successful. These are all "feelings" though, and the point of marketing metrics is that they tell a more objective story about what's working, and what isn't. So I think it's important that marketers look at benchmarks for all of their metrics to see what's working.
They have to remember, for example, that Google and Facebook are totally different beasts. So if their click through rate on a Google ad is way higher than on their Facebook ads, it doesn't mean their Facebook ad isn't working -- HubSpot's CTR on Google is 10X higher than what we see on Facebook, for instance. But we also know, because we look at a lot of other metrics alongside CTR, like reach, engagement, and cost per lead, that our Facebook ads are still worth our spend. Getting the whole picture, and setting benchmarks for what's effective for you and what isn't on that specific network, is the best approach in my opinion.
What do you think of Facebook's assertion that clicks don't matter?
Image credit: Ksayer1