Blunt Analyst Report Says That Marketing on Facebook Doesn’t Work

Described as “damning,” “scathing,” and “brutal,” a Forrester report says Facebook is all but useless as a marketing tool, bluntly declaring “Facebook is failing marketers.”

“Don’t dedicate a paid ad budget for Facebook,” advises Forrester. “Marketers tell us Facebook ads generate less business value than display ads on other sites. It’s time to make decisions based on facts, not on faith or fascination. You’re just buying display ads!”

In a blog post addressed to Facebook CEO Mark Zuckerberg, the author of the report says,”While lots of marketers spend lots of money on Facebook today, relatively few find success… Facebook ads were less valuable than any other marketing tactic (marketers)  could use on your site.”

“Less business value” than other opportunities

Written by Nate Elliott, Forrester vice president and principal analyst, the report is based on surveying 395 marketers and eBusiness executives at large companies across the U.S., Canada and the UK. “And these executives,” writes Elliott, “told us that Facebook creates less business value than any other digital marketing opportunity.”

Despite the dramatic pronouncements, Forrester’s score sheet puts Facebook behind top-ranked Google by only .3 points. Google scored 3.84 (out of 5) in satisfaction with the business value it provides marketers. Facebook, which came in at the bottom, got an average 3.54.

Noting that it has “a million active advertisers,” Facebook labeled the report illogical and irresponsible. In an email response to Business Insider Facebook said:

While we agree that the promise of social media is still in process, the conclusions in this report are at times illogical and at others irresponsible. The reality is that Facebook advertising works.

Facebook: “More effective than traditional display ads”

Standing with Facebook, Webush analyst Michael Pacther told MarketWatch, “The ‘social’ promise of Facebook suggests virality, and that is secondary to most marketers. Rather, targeting is what they care about most, and Facebook gives them that in spades.”

Ratko Vidakovic, marketing director at online ad buying platform SiteScout, defended Facebook saying, “There is a heavy social component to Facebook ads, making them far more effective than traditional display ads… The quality of its targeting data is top notch.”

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Some of Forrester’s harshest criticism was directed at company and brand pages. Calling the format of these pages “unloved,” Elliott complained in his blog post, “Everyone who clicks the like button on a brand’s Facebook page volunteers to receive that brand’s messages — but on average, you only show each brand’s posts to 16 percent of its fans.

A lack of “genuine engagement?”

“Your company,” he told Zuckerberg, “focuses too little on the thing marketers want most: driving genuine engagement between companies and their customers.”

Facebook’s stock price dropped Monday after the report and blog entry were posted. Today, the stock hit a low of $49.27 before recovering and going up just above $50.40 in early afternoon trading in New York.

Facebook is scheduled to report its third quarter results tomorrow after the market closes. Analysts expect the company to report earning 19 cents a share on revenue of $1.91 billion.

John Zappe is the editor of and a contributing editor of John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.


1 Comment on “Blunt Analyst Report Says That Marketing on Facebook Doesn’t Work

  1. As a publisher, advertiser and digital media consultant, I promise you this article is misleading. Asking Facebook to be responsible for engagement between your business and its fan base is like asking your parents to join you at school every day so the other kids will be nice to you. There are plenty of things that annoy me about Facebook but some of their innovations, especially their boosts and targets, could be very useful for a skilled recruiter or employment brand manager needing to push out a message. In truth, few employers truly “engage” in social media out of fear of litigation making most employer-based social media messages (paid or un-paid) less than stimulating.

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