76% of Businesses Fail with Facebook Ads with Negative ROI

Facebook is making billions of dollars, most of which is coming from running advertisements on their social network. It stands to reason that these advertisements are producing positive results for the advertisers, or people would stop using them, right? According to a new survey from Manta, that might not be the case.

Manta reached out to more than 4700 small businesses (> 10 employees) to survey them about how they used social media advertising, and what their results were. They found that of those that responded, just 24% reported that they were seeing a positive return on investment from Facebook.

Unfortunately, this survey did not dive deeper into correlating the way the companies used Facebook with their ROI. Plus, out of the 4700 small businesses in the survey, only 49% even had a Facebook account, which greatly reduces the sample size.

Most of the respondents said they used this type of social network advertising to boost awareness, attract new customers (by generating phone calls or traffic to their site), and to help with customer retention. Interestingly, 58% of those businesses with a Facebook account said they only post a few times per month. This lack of posting would certainly have something to do with their poor ROI.

Just 9% said they posted daily, 7% said 1-3 times daily, and 6% said more than three times per day. So, while this does provide some interesting information, it isn’t really enough for a small business to determine whether Facebook ads are ineffective, or if they are effective but only when the right efforts are made.

What's your opinion?