Facebook’s Metrics Mess

There’s been quite a bit of discussion this week in the press and around the event circuit on GM’s decision to pull back from Facebook. Given Facebook is the “new new” thing that is supposed to be reshaping the world of brand advertising, I find it ironic that on the week of its IPO it’s being pulled down by an age-old problem. The bottom line: Facebook’s huge (and very hot) but if it can’t prove that its ad offerings work, using metrics brand advertisers buy into, it will lose business. Period. At the Luma conference last week, a number of online ad industry and brand execs said that the main problem with Facebook is that they are not giving CMOs any useful metrics to measure success.

This challenge isn’t specific to Facebook. It’s pervasive in the world of online advertising. In fact, one of the medium’s key strengths – inherent measurability – is partly to blame for this dynamic. Online metrics are so numerous they can quickly become a Tower of Babble, creating mass confusion as everyone tries to define success using a different measure. Take the results of a recent study my company conducted of brand marketers and their partners in the digital media ecosystem (e.g., people trying to sell them advertising). When marketers were asked what would lead them to increase spending online, the top three responses were 1) “Improved clarity around ROI,” 2) “Ability to verify the impact of the advertising” and 3) “The ability to use the same performance metrics online as are used offline.”