Facebook delivers appalling ad clickthroughs: 0.04% clickthrough | Hacker News Reader

Facebook delivers appalling ad clickthroughs: 0.04% clickthrough

reachstudents.co.uk

10 pointsdanw14 comments

I've been questioning the honesty and the intelligence of the people (some second-tier VCs) who are touting and actively promoting F8 as a "great" way for startups to acquire users.

Fact is, Facebook is only making so much money because Microsoft entered into an agreement with them guaranteeing them profits per year. You as an independent developer will get even crappier CTRs.

One 'organically' acquired user on your own site is worth at least 1000 Facebook app users. Don't be fooled by the numbers!

"Fact is, Facebook is only making so much money because Microsoft entered into an agreement with them guaranteeing them profits per year. You as an independent developer will get even crappier CTRs."

One huge reason why I suspect Facebook's click through rates are so low is because they actually respect their users by not putting their ads in annoying, profitable places. As an Facebook app developer, you probably have far fewer users than Facebook, so you don't have the luxury of making up the costs of respect with volume. If you put your ads in more annoying places than Facebook does without being annoying enough for people to stop using your app, you can probably make money. The Graffiti app does this on their canvas pages with AdSense. I'd like to see their numbers.

Or you could actually do a good job of advertising instead of silly lowest common denominator ads. As a Facebook Platform app, you have access to quite a bit of data about your users. Use it. To do a good job of it, you'd probably have to sell your own ads. Then you could ask yourself if each ad will actually be useful to your users, and reject them if they're not. Whether or not that would be a profitable endeavor is left as an exercise for the reader.

The other option is to provide a useful service to your users that results in them paying you money. Very 20th century, I know. iLike seems to be doing a pretty good job of it.

Do folks know about good sources of CTRs for various sites? It seems like much of that information is gated.

If 0.04% is bad, is 0.4% bad? Surely 4% is good. And how are these rates going to change with metrics better than unique page views?

A more technically literate user base will use Adblock.

And it's about time -- it's bizarre that start-ups are trying to get acquired with money that ultimately comes from advertising Tide. Don't offend the corporate sponsors.

I mentioned this to a friend of mine the other day and she simply said "What ads on facebook?". She not a techie, doesn't use an ad blocker and logs into facebook daily. We're all used to these ads and don't even see them anymore, in much the same way we all channel surf or go to make a cup of tea during TV ad breaks.

Perhaps we need a new way of delivering ads in communication apps that differs from information & entertainment apps. Twitter, facebook, blyk and many other face this same problem with monetisation. Whats the solution? Is it ok to analyse what people are saying to each other and deliver text link ads inline with the conversation. If I say "Want to go for a drink later?" to a friend on facebook should there be a link underneath saying "Get half price drinks a Bob's Bar"?

Any ideas?

There's nothing surprising here. Facebook users are more sophisticated than most internet surfers and generally just ignore the ads.

Here's my proposal for getting people to look at online advertising seriously:

http://mindrosity.blogspot.com/2007/07/how-to-get-people-to-...

You can try to get people to look at ads in a different way, or you can accept that ads aren't the best way to generate income in an over marketed world and look for some other income source.

I think it's always safer to do the latter.

Look at what Pandora has done. I think each of their ads looks phenomenal. I sometimes keep staring (and end up clicking!) at the ads just because they are so beautifully integrated with the site.

So FB makes:

15.8x10^9(pageviews/month)x0.01x0.04/100 + 0.25x15.8x10^6 = $4x10^6 per month on ads?

So their annual revenue is just under $50x10^6 or $50 million.

Note: this assumes one ad per page.

$50 Million isn't nearly enough for 15.8 billion pageviews.

There's a lot of overhead cutting down the profits there. (Probably why there's an IPO rumour.)

There's ads on Facebook?

Advertising in general is hard to do well. Just throwing up standard "click on our site" banner ads won't have good click through rates wherever you put them up. We had good success with our fb flyers by keeping them topical and interesting - it was written about here: http://www.trendcatching.com/2006/12/ycombinator_sta.html

I think the key to making money on facebook is not by delivering ads but by delivering products and services. For example, TripUp provide a service where you can say where you're travelling and invite your friends to join you or look for people to meet in those areas. That's a goldmine for affiliated sales. Travel services (flights, hotels, hostels, car rental, etc). Local knowledge (internet cafes, guidebooks, taxi services). The list goes on and on.

Ads are an invasion of your viewing space. Smart, affiliated services are a win-win.

I think this bears repeating: http://news.ycombinator.com/item?id=30836

Facebook isn't the place to make money, the same way pets.com wasn't. Anyone that lived through the first dot-bomb should be able to see that.

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