Facebook links with data, such as from supermarket loyalty programs, to customise ads. Photo: David Paul Morris
This is a story about advertising on the web. Specifically, it's about ads on Facebook, a hugely popular free service that's supported solely through advertising, yet is packed with users who are actively hostile to the idea of being marketed to on their cherished social network.
Every time I write about the online ad economy, especially ads on Facebook, readers tell me: "I don't know how Facebook will ever make any money – I never click on web ads!"
And that's not all. You've checked with your friends and relatives – no one you know has ever intentionally clicked on a web ad. OK, once, years ago, a co-worker told you about a guy who knows a guy who tapped an ad on his phone. True story! But don't worry. People close to the situation dismissed it as a one-time deal. The guy wasn't trying to tap the ad; he just had really fat fingers. He felt really bad about it afterward, too.
So, the question persists: how does Facebook expect to become a huge business if most people you know never click on ads?
The answer is surprisingly obvious. It's a fact well-known to advertisers, though it's not always appreciated by people who use Facebook or even by folks in the web ad business: clicks don't matter. Whether you know it or not – even if you consider yourself sceptical of marketing – the ads you see on Facebook are working.
Sponsored messages in your feed are changing your behaviour – they're getting you and your friends to buy certain products instead of others, and that's happening despite the fact that you're not clicking, and even if you think you're ignoring the ads.
This isn't conjecture. It's science. It's based on a remarkable set of in-depth studies that Facebook has conducted to show whether and how its users respond to ads on the site. The studies demonstrate that Facebook ads influence purchases and that clicks don't matter. They also shed light on Facebook's long-term business strategy.
The tech world is consumed by the war between Facebook and Google – two huge sites that are constantly battling one another for users, engineers and advertising clients. Yet Facebook's studies suggest that its advertising fortune won't necessarily come at the expense of Google. Instead, the findings show that people react to ads on Facebook in the same way they respond to ads on television. If Facebook's ad business takes off, it might be at the expense of the biggest ad-supported medium in the world.
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