3 ms·

> Assuming an estimated ROAS of about 6-10x then this equates to advertisers seeing a $60B to $100B reduction in sales via Facebook. That's a pretty big assump

> Assuming an estimated ROAS of about 6-10x then this equates to advertisers seeing a $60B to $100B reduction in sales via Facebook. That's a pretty big assumption. Do we have any data that backs that up? It's just as easy to assume that there will be very little impact, because most people ignore Facebook ads, and that this is actually saving small businesses money.

samwillis 5y ago
A ROAS of 6-10 is apparently the average from what I have read, although I don't quite believe this. Even if its actually closer to a ROAS of 2-3 (which is not unreasonable, 30-50% of sale price paying for advertising), that would still be $20B-$30B in reduced sales.
aembleton 5y ago
They must be making a return on their investment, otherwise why would they do it? Maybe not 6-10x but it must be greater than 1x
- falcolas 5y ago
  > They must be making a return on their investment, otherwise why would they do it? Because of Facebook's advertising that says they should. Or independent contractors who will helpfully create an ad campaign that will "earn 6x their investment". There's plenty of stories out there of folks who actually put in the effort to measure the income generated by FB and Google ads, and they aren't flattering.
- Sander_Marechal 5y ago
  Because everyone else is doing it and they feel like they need to do it. Also, statistics manipulation by said ad agencies. They do anything for conversion "attribution" metrics. Saw an ad 6 months ago and now you buy the product? That's tracked as a conversion by the ad company, telling the business how great their ads are doing. I'm convinced that a vast amount of sales attributed to online ads are sales that would have been made anyway.
mountainb 5y ago
Ad spending just shifts to other channels or other forms of marketing / sales. It doesn't necessarily mean that the sales are going down. eCommerce is on a tear of growth worldwide. ROAS of 6-10x would be unusually excellent.

samwillis 5y ago

A ROAS of 6-10 is apparently the average from what I have read, although I don't quite believe this. Even if its actually closer to a ROAS of 2-3 (which is not unreasonable, 30-50% of sale price paying for advertising), that would still be $20B-$30B in reduced sales.

aembleton 5y ago

They must be making a return on their investment, otherwise why would they do it? Maybe not 6-10x but it must be greater than 1x

falcolas 5y ago
> They must be making a return on their investment, otherwise why would they do it? Because of Facebook's advertising that says they should. Or independent contractors who will helpfully create an ad campaign that will "earn 6x their investment". There's plenty of stories out there of folks who actually put in the effort to measure the income generated by FB and Google ads, and they aren't flattering.
Sander_Marechal 5y ago
Because everyone else is doing it and they feel like they need to do it. Also, statistics manipulation by said ad agencies. They do anything for conversion "attribution" metrics. Saw an ad 6 months ago and now you buy the product? That's tracked as a conversion by the ad company, telling the business how great their ads are doing. I'm convinced that a vast amount of sales attributed to online ads are sales that would have been made anyway.

mountainb 5y ago

Ad spending just shifts to other channels or other forms of marketing / sales. It doesn't necessarily mean that the sales are going down. eCommerce is on a tear of growth worldwide. ROAS of 6-10x would be unusually excellent.