Facebook Inc. is on a marketing tour.
The world’s largest social network passed the 1-billion user mark this month, but it is still selling itself to marketers, who have tough questions about the value of advertising on the site.
Facebook conducted research projects in nine key markets around the world this summer – for the first time, Canada is on that list – and is spending the fall travelling to those regions to share a picture of the local user base. It’s the largest tour since Facebook began holding these marketing summits roughly a year and a half ago.
Rob D’Onofrio, the company’s head of audience insights, was in Toronto this week to unveil research it conducted with comScore Inc. on Canadian Facebook users. The event marked the first time Facebook has shared this level of detail on its users with marketers.
Events have already taken place in the Brazil, France and the U.K. More summits are coming up soon in the U.S., India, South Korea, Germany and Japan.
“Hopefully the marketers in the room learn something about who’s on Facebook, learn something about how to market to them on Facebook, and at the end of the day ... [we are] showing why this is a worthwhile investment,” Mr. D’Onofrio said.
As of the most recent second quarter earnings report, 84 per cent of Facebook’s $1.18-billion in revenue came from advertising.
In July, Facebook chief operating officer Sheryl Sandberg told analysts on a conference call that the company has a “measurement challenge” with its ads. Users on the social network don’t tend to click on an ad to buy the product, she said, but are more likely to search it out later on, either in-store or online. A focus for Facebook is “market education” to convince advertisers that seeing an ad on the site actually drives purchase behaviour. These summits, Mr. D’Onofrio said, are part of that education.
Air Miles was also on hand Thursday to demonstrate some of that measurement. Because the company has an app where card members can identify themselves on Facebook, Air Miles is able to measure purchasing behaviour as a result of social media activities.
The company found that people who engaged on social media, by sharing their stories on the brand page for instance, increased their spending with Air Miles partners such as grocery stores and gas stations by 6 per cent, on average. And it was not just Facebook superfans driving that spend: avid points collectors increased purchase activity by only 2 per cent, whereas moderate users were up 8 per cent and passive members were up 9 per cent.
“This is what created the most buzz in the room. If you do this well, it’s really driving incremental sales for those customers, the ones that you really need to get,” said Neil Everett, chief marketing officer at Air Miles parent company LoyaltyOne Inc. Air Miles is now conducting more research to see if friends of those fans are also influenced in their purchasing decisions. The company plans to increase its investment in Facebook advertising, Mr. Everett said.
One of the most surprising findings he shared was that one third of Canadian Facebook users are over 45 – more than double the number of teenagers on the site. That’s common for the markets where Facebook has been in use the longest. It’s a key point to make to advertisers, since the older segment of consumers is a lucrative target market. But Facebook does not often come to mind for marketers in targeting them.
Mr. D’Onofrio’s aim is to give advertisers a broader sense of the kinds of consumers they can target on the site.
“My message to marketers as I walk through this data is ... if you’ve been skeptical about the opportunity that exists on Facebook, you should hopefully not be skeptical any more,” Mr. D’Onofrio said. “...Facebook shouldn’t be that add-on [in the marketing plan] at the end, an afterthought. It should be a starting point.”
Facebook in Canada
Some of the new information Facebook revealed to marketers in Toronto on Thursday:
4 out of 5
The number of Internet users that are also on Facebook in Canada. This is higher than the U.S. (three in four) and the global average (slightly more than one in two).
Amount of time a month a typical Canadian user spends on Facebook – a growth of 14 per cent compared to last year. The global average is roughly 6.5 hours, up 7 per cent compared to last year.
33 per cent
Proportion of Canadian Facebook users who are over the age of 45.
54 per cent
Smartphone penetration in Canada, up from about 36 per cent last year. Half of all smartphone users in Canada use Facebook on their mobile device.