Under pressure for not being able to generate enough clicks on advertisements posted on its website, Facebook Inc. (NASDAQ: FB), the social networking giant urged advertisers to look at bigger picture instead and should not worry about number of hits.
According to Facebook, a study done by Datalogix, which collects consumer purchasing data from retailers found that most of sales arise from people who see ads on the FB but does not necessarily click on the online advertisement.
While addressing an advertising conference in New York, Brad Smallwood, Facebook’s head of measurement and insights highlighted that this study (Datalogix) has analyzed about 50 digital campaigns before reaching to the conclusion.
The findings of this study are listed on the FB blog. According to the blog, people who looked at online ads but did not click contributed 99% of sales. Facebook says that the findings are sufficient to prove that developing an effective marketing campaign is more important than generating clicks.
Some other findings were also highlighted by the Facebook. Everyone knows that a company can maximize sales by advertising its products and services in front of large number of people. In other words, higher the number of eyeballs, higher will be the sales. For example: television. Advertisers, measure the effectiveness of ads by simply looking at the number of people that likely to watch ads. Nevertheless, marketers didn’t believe in the same logic when it came to advertise online.
However, according to FB, findings point out that advertisers who try to maximize their reach through various mediums have 70% higher return on investments.
Ever since FB made its IPO in May amid lots hype over its valuation and future growth prospects, the company has struggled to maintain investors’ trust. Falling revenue from online ads, lower revenue per user, slowing users’ base have raised fears over FB’s growth in the future.
Just last week, Facebook announced the launch of a new feature which would allow users to send gifts to their friends. With holiday season and thanks giving season just around the corner, the new feature could not have come at a better time for FB, believes analysts.
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