The Clinton Herald, Clinton, Iowa

Lifestyles

March 22, 2013

Slate: Facebook is making you buy things

PALO ALTO, Calif. — This is a story about advertising on the Web. Specifically, it's about ads on Facebook, a hugely popular free service that's supported solely through advertising, yet is packed with users who are actively hostile to the idea of being marketed to on their cherished social network.

Considering all of this, the best place to start is with your primary concern about Web ads. This is what I hear from readers every time I write about the online ad economy, especially ads on Facebook: "I don't know how Facebook will ever make any money — I never click on Web ads!"

And that's not all. You've checked with your friends and relatives. No one you know has ever intentionally clicked on a Web ad. OK, once, years ago, a co-worker told you about a guy who knows a guy who tapped an ad on his phone. True story! But don't worry. People close to the situation dismissed it as a one-time deal. The guy wasn't trying to tap the ad; he just had really fat fingers. He felt really bad about it afterward, too.

So, the question persists: How does Facebook expect to become a huge business if most people you know never click on ads?

The answer is surprisingly obvious. It's a fact well-known to advertisers, though it's not always appreciated by people who use Facebook or even by folks in the Web ad business: Clicks don't matter. Whether you know it or not — even if you consider yourself skeptical of marketing — the ads you see on Facebook are working. Sponsored messages in your feed are changing your behavior — they're getting you and your friends to buy certain products instead of others, and that's happening despite the fact that you're not clicking, and even if you think you're ignoring the ads.

This isn't conjecture. It's science. It's based on a remarkable set of in-depth studies that Facebook has conducted to show whether and how its users respond to ads on the site. The studies demonstrate that Facebook ads influence purchases and that clicks don't matter. They also shed light on Facebook's long-term business strategy.

The tech world is consumed by the war between Facebook and Google — two huge sites that are constantly battling one another for users, engineers and advertising clients. Yet Facebook's studies suggest that its advertising fortune won't necessarily come at the expense of Google. Instead, the findings show that people react to ads on Facebook in the same way they respond to ads on television. If Facebook's ad business takes off, it might be at the expense of the biggest ad-supported medium in the world.

Last year, Facebook partnered with Datalogix, a firm 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 percent had a 3X or better return-on-investment — that means that 70 percent 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 5X 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 percent 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.

Manjoo is Slate's technology reporter and the author of "True Enough: Learning to Live in a Post-Fact Society." Twitter: @fmanjoo

Text Only
Lifestyles
  • sunshine.jpg Skin cancer screening is set for Saturday

    CLINTON — A free skin cancer screening will be held this weekend in Clinton.

    June 19, 2013 1 Photo

  • organ-transplant.jpg Facebook's organ donor status sends registrations soaring

    Facebook's addition of a way for its users to tell people their organ-donor status helped boost the number of people who registered as donors 21-fold in one day.

    June 18, 2013 1 Photo

  • Putting a healthy spin on the popular fish taco Mexican cuisine has been popular for a long time, but my recent travels around our country have persuaded me that fish tacos are big now in a way they never were before. Naturally, perhaps, they are easiest to find in regions with a strong Hispanic i

    June 18, 2013

  • trash fish Dishing up trash: New look for sustainable seafood

    Most people have only ever seen a scorpion fish in an aquarium. Unless they dine at Carolina Crossroads Restaurant in Chapel Hill, N.C., where they'll find the spiny, venomous creature on the menu.

    June 14, 2013 1 Photo

  • doortodoor-market-box.jpg Consumers' desire for local, organic food drives online grocery business

    Just a few years ago, consumers who were fervent about eating locally-grown and organic foods had to head out to the nearest Whole Foods or farmers market. Now all it takes is a few swipes of the mouse at an online grocer like Door to Door Organics, Relay Foods or AmazonFresh.

    June 12, 2013 1 Photo

  • iStock_000008462647XSmall.jpg When did sunscreen get so complicated?

    Summer is almost here, which means it's time for picnics, pool parties, and every parent's favorite pastime: chasing after your kid with the sunscreen bottle. But what's arguably more arduous than slathering lotion onto a screaming 3-year-old is choosing the right sunscreen.

    June 11, 2013 1 Photo

  • cell-phone.jpg How to shield calls, chats, browsing from surveillance

    If you have followed the startling revelations about the scope of the U.S. government's surveillance efforts, you may have thought you were reading about the end of privacy. But even when faced with the most ubiquitous of modern surveillance, there are ways to keep your communications away from prying eyes.

    June 11, 2013 1 Photo

  • Miss Iowa Nicole Kelly wins Miss Iowa CLINTON -- Nicole Kelly of Keokuk won the 2013 Miss Iowa crown Saturday. The candidates from Clinton did not grab the crown, but they did not walk away empty handed. Miss Johnson County Taylor Wiebers, of Clinton, received the Miracle Maker award fro

    June 10, 2013 1 Photo

  • New schedule for holiday collection CLINTON -- The city of Clinton will no longer conduct garbage collection on Saturdays. Collection will be conducted differently during a holiday week. If a holiday falls on a Monday, then Monday and Tuesday's routes will be collected on Tuesday. Sub

    June 8, 2013

  • Property owner faces fine conform to sale guidelines DEWITT -- Mike Eckhart, previous owner of property at 221 E. Second St., addressed the DeWitt City Council concerning an infrastructure issue on the property. Eckhart sold the property in 2012 without consolidating the two lots involved or separatin

    June 7, 2013

Clinton Herald Photos


Browse, buy and submit pictures with our photo site.

Community Calendar
Loading…
Events by eviesays.com
AP Video
Featured Comment
Front page
Poll

Do you think the city of Clinton should be in the solid waste business?

Yes
No
     View Results
Featured Ads
Local Radar
Blue Zones Project
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Front page