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Good news and bad news about Facebook ad ROI

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The good news is that a 2013 test, reported by Facebook and confirmed by Coca-Cola executives, showed that Facebook display ads linked to videos outperformed a television campaign by a factor of 3.6.

The bad news is: In France, not here.

The test

In the first quarter of last year, Coke ran a campaign to reintroduce its polar bears.

One component was five 30-second television commercials, edited down from a six-minute online video shot by Ridley Scott.

The other component was three days of Facebook display ads linked to videos and a video that played when people logged out.

With the content being similar, if not in some instances identical, it would seem to have all the makings of an apples-to-apples, experiment-and-control test.

The results

Based on weekly reports of actual shopping from 10,000 French panelists (8,000 of whom were internet users), every euro spent on television advertising produced a 0.76 euro return on investment, while every euro spent on Facebook returned 2.74 euros in additional Coke sales.

That's 3.6 times the ROI.

The problem

If only it were that straightforward.

There are complications, which go beyond the fact that France isn't America.

One is that Facebook's higher "R" is attributable to its low "I"; the Facebook component of the campaign cost only 2 percent of the total, as Tony Evans, Facebook's head of vertical measurement for Europe, the Middle East and Africa, told Advertising Age.

Another is that Facebook wouldn't have worked anywhere as well without the television advertising. Coke marketing director Manuel Berquet attributes 35 percent of the campaign's total impact to the synergy of both media reinforcing each other.

A third is that few Facebook campaigns have such a proven, popular and effective creative vehicle as Coke's polar bears, which first saw the light of day in 1922 and made a big Arctic splash with their computer-generated television debut in 1993. "Facebook's targeting capabilities and engaging ad units" can "make it an effective sales channel" only when "there is a unique and strong creative content" driven by smart strategy, Berquet admitted. Most Facebook promotions fail to measure up to that standard.

So if you think your small business can get a huge ROI with Facebook advertising alone – in France or anywhere else – you'd better think again. As Facebook's own Tony Evans concedes, "It wouldn't work without TV at the heart of it."


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