My crystal ball for Facebook advertising is working well.

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FacebookWorld domination is ongoing, law suits are pending and one of my Facebook predictions for marketers is coming true.

I predicted that the cost of advertising on Facebook would rise (it’s up 40% in the last year) but that click through rates would drop. Ergo, it’s not a great destination for seriously bottom line focused marketers, companies and brands. See a few of my social media predictions – here.

The anecdotal evidence that we’ve heard and seen from partners and competitors is that the return on investment for companies looking to use it as an aquisition tool for paying customers, is one word, crap.

We do a lot of deals with portals, ad networks and other online destinations. Conversion rates can be anything from .5% to 5% depending on whether the site that our ad is appearing on is targeted (to our segment) or untargetd (maybe just sports, but no gambling). We’ve heard of 5 figure campaigns run with response and ultimate conversion rates of less than .001%. Ouch.

Twitter’s growth is unabated, and it seems to have beaten Facebook to the punch on click through rate – but part of that is due to the nature of the medium (of the tweet). To have any engagement, you HAVE to click through a tweet to see more in-depth content – this is primarily due to the URL shorteners out there.

Some of the feedback that we’ve had from customers is that when they are on Facebook, they are in friend-browsing mode and even less likely than usual to engage with random marketing, however targeted. It’s a little different when they are surfing outside of a social network. They are more open to suggestion.

There’s a good piece on it here from last year, and that was before Facebook’s prices went up. Read it here.

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