Uncovering the True Value (or Lack Thereof) of Facebook Advertising

April 29, 2016

Speaking out against the traditionally unquestioned authority of Facebook isn’t something that you see too often on today’s Internet. In fact, with access to over one billion active daily users and an ad revenue total that’s projected to hit $21.43 billion by the end of 2016 (as reported by the experts from eMarketer), being on the wrong side of this conversation feels like arguing with a brick wall at times.

However, looking beyond these flashy numbers and truly evaluating the tangible benefits of advertising via this platform unveils a starkly contrasting story to the one presented by Mark Zuckerberg and the rest of the team over at 1 Hacker Way. To prove this point and safeguard your dealership’s precious marketing budget from wasteful spending and lackluster results, let’s get a little controversial and delve headfirst into why advertising on Facebook simply isn’t worth the effort.

Dispelling the Notion of “Genuine Engagement"

“Facebook is failing marketers.”
– Nate Elliot, Forrester Research

If we’re going to start tearing down the myth of Facebook’s advertising prowess, there’s no better place to begin than with the incendiary report penned by Forrester Research’s vice president and principal analyst, Nate Elliot. As Elliot explains, the allure of this social media giant’s massive audience, constantly expanding data repository, and the potential to build lasting connections with consumers are the main reasons why seemingly every talking head on the web points to an active Facebook Ads Manager account as a “must include” within your marketing campaign.

“[Facebook’s] sales materials tease marketers with the promise that you’ll help them create such connections. But in reality, you rarely do.”
– Nate Elliot, Forrester Research

Unfortunately, the aforementioned benefits don’t translate to the marketing process – primarily because Facebook neither supports its advertising partners (in this case, your dealership), nor fosters an advertising environment that is conducive to generating engagement. Elliot corroborates this particularly damaging claim by noting that Facebook, on average, shows each advertiser’s posts to less than 16 percent of its target audience; hardly a rate that instills confidence.

If that wasn’t enough, there’s also the fact that in Elliot’s poll of 395 marketing professionals from across the United States, Canada, and the United Kingdom, Facebook ranked dead last out of the 13 marketing channels up for review in terms of creating business value. To put these findings in plain English, the smartest guys in the industry only turn to advertising on the world’s largest social network as a last resort if more effective channels – on-site customer ratings and reviews, search marketing, etc. – aren’t feasible or readily available.

Facebook Isn’t Interested in Being a Strong Advertising Platform

Despite the inherently negative implications that come with offering up such a substandard service, Elliot goes on to note that Facebook really isn’t all that worried about enhancing and improving its advertising product. The proof of this assertion, Elliot suggests, comes from the realization that during the 18 months leading up to his report, Facebook supported less than 15 percent of the tens of billions of display ads promoted on its network with its ever-growing cache of rich social data and consumer insight.

(Quick aside: If you’re not interested in unloading a few hundred dollars to look over Elliot’s full-length report, at least read his open letter to Mark Zuckerberg. It’s an eye-opening look at the shortcomings of advertising on Facebook that doesn’t pull any punches and takes aim directly at the man in charge of this social media giant.)

So why can’t Facebook be bothered to develop a platform that actually generates results for its users? As The HubSpot Blog’s Dan Lyons points out, there’s absolutely no need for Facebook to rock the boat with any improvements as long as the men and women at the top of the totem pole can point to the more than one million companies that leverage this advertising channel on a regular basis – as well as the company’s own massive bottom line.

“One of the arguments used to rebut the Forrester report (in fact it’s part of Facebook’s own defense) is that if Facebook's ads are so ineffective, why do people keep buying them?”
– Dan Lyons, The HubSpot Blog

Essentially, the thought process behind the “one million company argument” looks something like this: “Advertising on Facebook can’t be a colossal waste of time and resources for my dealership if there are so many companies from across the globe funneling their marketing budgets into this platform!”

For the people out there that aren’t interested in thinking too critically about their marketing operations, there’s plenty of logic and reassurance to be found within this rationalization. However, is glossing over the hard numbers and doing something just because it’s what everyone else already does really enough justification for the money that your dealership pumps into its advertising campaigns? Lyons, Elliot, and plenty of other prominent figures within the digital community that have dug into the actual results generated by advertising on Facebook seem to think otherwise.

Disengaged and Disinterested Audience

Even if you live in an alternate reality where Facebook isn’t exclusively focused on bolstering its own earnings and actually goes out of its way to support advertisers, Canadian marketing guru Patrick Lannigan suggests on his personal blog that there’s an even bigger problem with putting all of your eggs in this specific basket: Facebook users aren’t interested in consuming – or even acknowledging – your ad content on this channel in the first place.

“Facebook users are so engaged (and pleasured) by the updates from their friends and family that they aren't attracted to advertisements.”
– Patrick Lannigan, Vice President of Marketing, Strategic Information Technology

According to Lannigan, proving this statement all comes down to understanding the psyche of the average Facebook user:

  • Facebook users are already engaged and entertained via status updates, shared posts, and other interaction with friends and family members.
  • It’s nearly impossible to garner a viewer’s attention once he or she is immersed in this high engagement experience.
  • Other marketing channels – like search marketing – circumvent this issue by connecting with viewers who are seeking engagement, but haven’t quite locked in on it yet.

When you put all of this together, the point Lannigan is making becomes abundantly clear: Advertising endeavors on Facebook are always doomed to fail because there’s a fatal flaw built into the infrastructure of this marketing system.

Fixing Facebook’s Woes

So now that we’ve painted an exceptionally gloomy picture of Facebook’s future and convinced you that dedicating even a tiny portion of your marketing budget to this endeavor is a bad call, it’s time to put the notion of advertising on this network to rest for good, right? Not exactly.

As it stands today, advertising on Facebook is clearly not a smart idea. However, if this social giant can find a way to differentiate itself, either by developing a new (and effective) way to disrupt the user experience or rethinking its entire approach to display ads, then it might be worth reconsidering this “scorched earth” policy. Until we get to that point though, there’s no denying that it’s in your dealership’s best interests to steer clear of the Facebook advertising platform and devote its marketing resources to other channels that actually put your advertising budget to good use.