Is Facebook’s Sponsored Results a Failure Already?

Back in July, Facebook started testing Sponsored Results, a new format designed to allow businesses to buy ad spots that are displayed in its internal search results — think Google AdWords. The format went live in late August. Initially there were rumblings regarding whether the social giant was biting off more than it can chew and setting itself up for another failure. That chatter is slowly disappearing as the results start to roll in.

Gauging Reach and Effectiveness
According to a testing initiative headed up by social marketing and analytics startup Optimal, the early results show a new ad format with a whole lot of potential. With this initiative, the company focused on two key areas: reach and effectiveness.
On the reach front is where Sponsored Results may be its most impressive. Optimal wanted to find out the reach of a particular search term in comparison to a brand’s fans. This was done over a course of seven days. When measuring the reach of the term “Facebook”, Optimal found that it showed up in more than 24,000 U.S. searches, with roughly only 22% of those searches coming from fans. Searches for top brands like Coca Cola, MTV and YouTube produced similar results.
What does all means to you, the marketer thinking of investing in Facebook’s Sponsored Results? Well let’s say a search for your brand yielded around 24,000 U.S. searchers. Same scenario, just your brand. In this case, only about 20% of them are coming from the fans you’re already connected with, but 80% is from an entirely new audience. See the potential there?
As far as effectiveness goes, the jury is still out, but Optimal’s test run warrants a bit of optimism. This time, the company chose to supply data derived from its very own campaign with Sponsored Results. These campaigns focused on a brand range of areas, including consumer goods, entertainment, and politics.
According to the findings, click-through rates varied from 0.7 to 4.1%, which is on the lower end of the spectrum, yet better than the company’s performance with Facebook’s Marketplace ad format. For those who have been struggling with the other advertising solutions available on the social platform, these results are probably very encouraging.
A Closer Look at Sponsored Results
A user will see sponsored content after typing a related keyword in Facebook’s search box. Marketers can even optimize their campaigns in a targeted way that sees ads popping up when certain words or phrases are entered. Will these factors spark outrage from the user base? That remains to be seen, but like all Facebook ads, Sponsored Results gives users the freedom to do away with any content they don’t want to deal with. All it takes is a simple click of the “x” at the top right corner to get rid of the ad in question.
Facebook Sponsored Results are straightforward and simple to use. This format enables ads to be targeted by platform relevant elements such as pages, apps, and places. The traffic however, is either directed to a Facebook Page or app. This is very important point to keep in mind as it pretty much limits whatever potential the new format has to the social platform. Brands who may have been looking for another way to lure users to their website may be disappointed  — at least for now.
Long-term Outlook
Potential aside, there is no guarantee that Sponsored Results will not turn out to be a flop. The fact that its reach is limited to within Facebook means there is only so much you can do with it. People go to Google Search looking for shoes, plane tickets, food, and a host of other things. That is not the case with Facebook. In many instances, people come here in search of games, apps, companies, and other very specific things.
So while the new format will likely provide a better way for users to discover apps and other new content, its overall value to marketers is still questionable. Facebook is probably just hoping it helps increase ad revenue without hindering the user experience. The company could certainly use the extra financial support, but the user experience is something it cannot afford to compromise. That experience is pretty much what keeps it atop the pile in the social space.
In the mean time, Facebook is only deploying Sponsored Results to desktop users. With Zuckerberg’s increased focus on monetizing the company’s mobile presence, it should only be a matter of time before the format reaches smartphone and tablet users.