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Brands Buying Facebook's New Pitch, Mostly

At data summit in Rome, attendees like Kellogg's say social ads work, though some researchers are less certain
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Yesterday, Facebook was in Rome spreading the word at a big data conference that its social ads—like TV spots—sell everything from Fiats to fettuccine. To an audience of data-marketing players, it was almost like preaching to the Sistine Chapel choir.

Though after 10 years of Web-based platforms like Facebook struggling to “prove out” that digital ads work offline, it's worth noting that the message is no longer falling on deaf ears when it comes to brands. Or, at least not as many deaf ears as before.

“There’s no doubt from my perspective that Facebook ads and other display ads drive [sales] volume,” said Aaron Fetters, director of insights and analytics solutions for Kelloggs Company, at the I-Com Global Summit in the Eternal City.

Janice Chan, director of dgital marketing, Asia Pacific, Starwood Hotels & Resorts, said Facebook ads have driven room bookings in Asia in her recent tests. The hospitality brand will now likely invest more on the platform in Europe and the Americas, she said.

“Brand engagement and conversions are where we are getting the meat and value out of Facebook,” Chan said.

Brad Smallwood, measurement lead at Facebook, shared his company’s study that was unveiled during Advertising Week with the I-Com crowd, highlighting that 99 percent of store sales influenced by the social site didn’t involve a mouse click. Trust in display as a branding tool is going in the right direction as advertisers evolve how they think about digital, said the industry vet, who previously worked at Yahoo.

“In the past, there’d be like one case study and nobody would want to believe that,” Smallwood said. “What we needed was a systematic way of running it across a wide variety of offline sales-focused campaigns. And that’s what we think we did.”

On Oct. 23, the eyes of Wall Street will focus on Facebook when it announces its third-quarter earnings. With investors' money on Facebook’s display and mobile ads results, they can only hope that Smallwood is spot-on.

While attendees at I-Com (ends Oct. 18) are bullish on the future of Facebook and online advertising as a whole, they warn against the idea that any digital ad by itself could be the sole reason why consumers walk into a store and buy certain brands. There has been plenty of chatter about analyzing marketing mix models and selling digital's branding effectiveness in a simple way to get consumer packaged-goods (CPG) firms to lift their spends.

New York University’s E. Craig Stacey said his research team will soon release a CPG-based report examining how display ads perform when combined with other online tactics. “They don’t work nearly as well as they do when in concert with paid search,” Stacey said. “We would not have accounted for more than half of the [sales] effect of online media if we had not incorporated both the individual and synergistic effects of paid search and online display.”

On the Facebook level, Mikko Kotila, CEO of the research firm Statsit, believes the site’s ads can be effective if the social company improves its marketing products. At the same time, his firm recently surveyed "avid Facebook users," pitting the social site’s ads against TV spots.

“Television’s influence was double compared to Facebook’s,” Kotila said. “The research assumption was that they’d be more influenced by Facebook. But we got completely opposite results.”

Though, companies seem increasingly comfortable bumping up Facebook spend, plugging social ads—at a small cost compared to what they invest in traditional media—into multifaceted campaigns.

“Facebook ads have branding value,” Kellogg’s Fetters said.