Facebook tries to soothe advertisers' frayed nerves
But saying that clicks don't matter won't be an easy sell.
According to Reuters, the company is trying to convince advertisers that "clicks" are not the only way to measure the effectiveness of advertisements. The reason Facebook is making this argument is that "fewer than 1% of in-store sales tied to brand advertising campaigns on Facebook come from people who clicked on an ad," the news service says.
Whether that's enough to win over skeptical advertisers remains to be seen. Clicks matter to brand advertisers, which often ask consumers to take actions such as view a video or to tweet or "like" something on Facebook. This helps them determine the effectiveness of their ads. Moreover, it may not be easy to tie sales to specific advertisements. Privacy activists are also not happy about the new tools Facebook is working on with Datalogix.
Facebook's argument about clicks is similar to claims networks make about TV ratings. Shows such as "30 Rock" may not attract huge audiences, but their viewers are educated and well-heeled, which should make them attractive to advertisers. But ratings do matter. Marketers aren't interested in supporting shows whose audiences are dwindling, because fewer people will see their messages.
Clicks may not be the only way to measure an online ad's effectiveness, but they certainly are an important one. Advertisers won't simply "forget" about them unless Facebook can make a more convincing case than it has already.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jdberr.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Start investing in technology companies with help from financial writers and experts who know the industry best. Learn what to look for in a technology company to make the right investment decisions.
Forget Facebook: DataCoup allows users to sell their private data directly to businesses. But will consumers feel comfortable taking them up on the offer?
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'