Facebook can deliver great reach for brands and companies — it’s just becoming increasingly evident that you have to pay for it. A study by Neustar, a real-time analytics firm, shows that Facebook’s advertised reach efficiency exceeds that of exchange services, advertising portals and ad networks. However, reach on Facebook (noted in the report as social) has dipped considerably from Q4 2013 to Q1 2014.
The study also found that, compared to exchange, portals and networks, Facebook advertising was the most cost-effective way to go for major brands. Neustar’s study tracked 152 billion ad events, 28 billion impressions and 300 million conversions tracked through the company’s AK Media Insights platform.
Neustar Senior Vice President of Media and Advertising Rob Gatto talked with Inside Facebook about the report:
Month after month, the cost and reach efficiency (of Facebook) is always very high because of the long and durable nature of social users. The interesting thing that surprised me is that exchanges have really had some marked improvement in the first quarter. I don’t know if that’s because inventory itself is better, or if there’s more premium inventory. I have noticed that social used to dominate this report and it seems as though exchanges are catching up a bit. It seems like portals and ad networks are just kind of left on the sidelines. Nobody can track Facebook Custom Audiences, so I would be curious.
Neustar’s study shows that of the four pathways tracked, Facebook advertising was the most efficient at drawing in new users.
The reach efficiency metric also takes into consideration cost-per-unique-user. Social (Facebook) performed 37 percent better than ad exchange services, Neustar found, though the quality of user (based on ability to target repeatedly and consistently) was substantially higher for ad exchange.
Gatto talked about Facebook’s ability to deliver reach:
Facebook continues, hands down, to drive significant unique reach as it compares to the other players. I know that Facebook will do their own advertising off of Facebook ID, not cookies, but a lot of the ecosystem still tracks off cookies. A lot of that has to do with the durability of the login and the fact that Facebook connect is everywhere and everywhere you go, you’re logged in. It just makes their users more durable. When you have a more durable user, it allows you to hit that user over and over again, which increase the return on investment and increases unique reach.
Facebook also performed well as a channel that influenced purchasing decisions along the upper part of the funnel.
Social finished second to ad networks, but far higher that portal or exchange, in this metric. We’ve heard that Facebook is great for awareness and top-of-mind recognition, and the Neustar study shows that social is growing in this regard.
Neustar also compiled an infographic summing up its study: