Study: Facebook ads undervalued by as much as 30 percent

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Facebook advertising can be a great value for brands — provided they’re utilized correctly. A recent study by Kenshoo, a Facebook Preferred Marketing Developer in ads, shows that Facebook ads can be undervalued by as much as 30 percent when an advertiser prefers the First Only model in comparison to the Last Ad model.

Last Ad credits the entire value of a conversion against the last ad that was exposed to the consumer. Kenshoo found that using the First Only attribution model (which credits just the first ad click a consumer makes), Facebook ads were undervalued by 30 percent, compared to Last Ad.

Josh Dreller, director of marketing research at Kenshoo, commented on the study’s findings:

As Facebook continues to become even more of an essential component of the marketing mix, it’s critical that all advertisers be aware of the costly oversight inherent in the Last Ad model. The use of multi-touch attribution helps to accurately quantify the value of Facebook ads within a cross-channel campaign and helps marketers optimize spend to boost ROI.

Kenshoo studied the performance of Facebook ads through its clients using five standard industry-accepted models: First Only, Prefer First (crediting the first couple clicks), Divide Equally (crediting all clicks equally), Prefer Last (crediting the last clicks) and U-Shaped (giving more credit to the first and last clicks). Here’s what the company found:

  • First Only: Facebook was undervalued 30 percent using the Last Ad model.
  • Prefer First: Facebook undervalued 20 percent using the Last Ad model.
  • Divide Equally: Facebook undervalued 16 percent using the Last Ad model.
  • Prefer Last: Facebook undervalued 12 percent using the Last Ad model.
  • U-Shaped: Facebook undervalued 15 percent using the Last Ad model.

Click here to read the full study.

Readers: Which model do you usually use in your Facebook advertising plans?

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