How to measure the ‘Facebook Effect’ on Advertisement performance?

     Before Facebook IPO, I heard that General Motors was pulling $10 million in display advertising from the world’s largest social network due to poor performance. GM was the third largest advertiser and that seemed to impact on Facebook but it didn’t so much and Ford represented that the advertisement on Facebook is effective. Moreover, GM restarted advertisement on Facebook in this April.

     What I was interested in was how to measure the Facebook effect on ad performance. How did GM measure its display advertising campaign performance? Several news articles reported that GM was relying on click through rates (CTRs) or last click to measure display campaign performance on Facebook. Also, the article says, “while the CTR is a great indicator of paid search performance, the online marketing industry has long known it’s an unreliable and ineffective way to measure the true impact of display.” This is because “display’s primary role, however, is to generate awareness and consideration at the top of the funnel, where immediate actions (like clicking or buying) generally do not occur as often. As a result, one would expect few clicks to occur on display campaigns even if they have the desired impact on overall campaign performance”, according to some articles.

    

    I’m not sure of which is right way to measure the performance but what I learned from this kind of issue is that we carefully need to consider not only marketing way but also measuring tool to figure out how much degree of the effect we can get from the advertisement.