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Facebook is making you buy things

Farhad Manjoo (via Slate/ SMH) | March 27, 2013
Even if you never click on Facebook ads, they are making you buy.

Last year, Facebook partnered with Datalogix, a company that records the purchasing patterns of more than 100 million American households. When you stop by the supermarket to buy Tide, Rice-A-Roni and Mountain Dew this evening, there's a good chance you'll hand the cashier a loyalty card to get a discount on your items. That card ties your identity to your purchases – it puts a name on your Tide, Rice-A-Roni and Mountain Dew. After you leave the store, your sales data is sent over to a server maintained by Datalogix, which has agreements with hundreds of major retailers to procure such data.

Over the past few months, Facebook and Datalogix figured out a way to match their data sets in a manner that maintains people's privacy. In other words, Facebook can now tie its users to the stuff they buy at supermarkets. Armed with this data, Facebook began running a series of analyses into the effects of advertising campaigns on its site.

If, say, Procter & Gamble ran a Facebook ad for Tide, Facebook could look at Datalogix's data to see whether people who were exposed to the ad tended to purchase more Tide in the weeks after the campaign. (Tide is just an example here; Facebook has conducted more than 60 such studies for major advertisers, and while it was willing to give me general insights about its findings, it wouldn't discuss specific advertisers.)

These general insights make a strong case for Facebook ads. First, according to the study, Facebook ads work. "Of the first 60 campaigns we looked at, 70 per cent had a three times or better return-on-investment – that means that 70 per cent of advertisers got back three times as many dollars in purchases as they spent on ads," says Sean Bruich, Facebook's head of measurement platforms and standards. What's more, half of the campaigns showed a five times return: advertisers got back five times what they spent on Facebook ads.

But the most interesting finding was the total lack of correlation between purchases and clicks. "On average, if you look at people who saw an ad on Facebook and later bought a product, [fewer than] 1 per cent had clicked on the ad," Bruich says. In other words, the click doesn't matter; people who click on ads aren't necessarily buying, and people who are buying are almost certainly not clicking.

As Facebook's measurement systems improve, you might even see better ads. One of the eventual goals the system, Bruich says, is to figure out what kinds of ads appeal to what kinds of users, so over time you'll be presented with ads that are less likely to annoy you. And if, as you insist, ads really don't work on you – that you never buy things because of marketing you see on Facebook – it's theoretically possible that Facebook's system would be able to figure that out, too, and maybe the site won't show you any messages.

But that's unlikely. You may not love the ads you see – and you'll still never click on them. But unbeknownst to you, Facebook ads still work on you. Resistance is futile.

 

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