Last week I wrote about Facebook’s partnership with Datalogix to measure ad effectiveness by tracking whether people bought a product in store after seeing a Facebook ad. Since then more detail has been forthcoming about why this is a good idea, doubtless aimed at overcoming the privacy objections. This is the most telling:
Smallwood [Facebook’s Head of Measurements and Insight] said that ad impressions, rather than clicks, drive sales. In fact, in the DataLogix campaigns, 99 percent of sales were from people who saw ads but didn’t interact with them. To back that up, he also also pointed to a Nielsen study showing that there’s virtually no correlation between clicks on ads and either brand metrics or offline sales.
For many companies, particularly startups on a tight budget with a keen eye on customer acquisition costs and customer lifetime value, focusing on clicks is the right thing to do. They can focus on brand and offline sales later, if appropriate. However, what Smallwood is making clear is that for many others to focus on clicks is to miss the bigger part of the picture. Maybe up to 99% of the picture. Moreover, it is big brands with large volumes of offline sales and the largest ad budgets that this applies to. Helping them link online ad impressions to offline sales will help them to bring more of their ad budgets online and to mobile. That is good for all of us.