Valleywag and others are reporting that data and anecdotes are leaking out reporting that Facebook is a terribly performing advertising buy.
Without more detail, it’s tough to really draw too many conclusions here. It’s not surprising that a social network filled with generally poor college kids doesn’t generate a lot of clicks and conversions, so I think it’d be more interesting to know some other aspects.
What are the advertisers in question pitching?
What type of creatives are the advertisers using?
What type of optimization are the advertisers using?
What type of optimization is Facebook using on their own inventory?
We know Facebook has a deal with Microsoft to represent their inventory, but I’m not aware of what technology Facebook is using to get the best yield possible out of their inventory. The Valleywag piece mentions that Myspace has been performing over twice as well as Facebook with a somewhat similar audience. What’s the difference?
Myspace could potentially be managing their advertising better, doing better user targeting, better optimization, using better yield management, and finding easy ways to work with more buyers for their inventory.
Additionally, Myspace makes a lot of their ads very hard to miss, while the majority (if not all) of Facebook’s ads are below the fold. This difference alone is going to affect performance.
It’d be great to know the details of the setups to truly compare, but at this point it sounds like Facebook may need to try and do some things to keep some of their ad buyers around.