Ouch. Forrester’s new research says that Facebook ads are ‘failing marketers’

If you were Facebook — a business which derives 88% of its income from advertising — the last thing you’d want to hear is that some new research is suggesting brands don’t get much value from your ads and shouldn’t set aside a dedicated budget to pay for them. Unfortunately for Zuck and co., that’s exactly what has happened.

According to a new report from technology and market research company Forrester, the social network is “failing marketers” and hasn’t revolutionised digital marketing at all. Instead, the research house claims it “does little to support social experiences between brands and customers” and its adverts are not much more than loosely targeted banners. It goes on to conclude that brands shouldn’t “dedicate a paid ad budget for Facebook.”

In a blog post / open letter to Facebook CEO Mark Zuckerberg, Forrester vice president and principal analyst serving marketing leadership professionals, Nate Elliott, explains that the company surveyed 395 marketers and ebusiness execs at companies in the US, Canada and the UK about which digital marketing platforms they’re most satisfied with, and that they rated Facebook behind other competitors like Twitter, Google and LinkedIn.

As Elliot puts it, despite the fact that Facebook’s 1.15-billion plus monthly active user base offers brands a massive potential audience — and, on top of that, knows what they like and are interested in — it isn’t making optimum use of all that social power. Even though the company now has more than 1-million advertisers — including some of the world’s biggest brands — the analyst says that Facebook’s ad products aren’t really driving real engagement with customers and really using all its social network data. Addressing Zuckerberg, Elliot writes:

Everyone who clicks the like button on a brand’s Facebook page volunteers to receive that brand’s messages — but on average, you only show each brand’s posts to 16% of its fans. And while your company upgrades its advertising tools and offerings monthly or more, you’ve done little in the past 18 months to improve your unloved branded page format or the tools that marketers use to manage and measure those pages.

We estimate your site now delivers tens of billions of display ads every day. But fewer than 15% of those ads leverage your ever-growing cache of social data to target relevant audiences. And your site’s static-image ad units offer marketers less impact per impression than they could achieve with the ad units other sites offer.

Facebook’s response? It says while it does agree that “the promise of social media is still in process, the conclusions in this report are at times illogical and at others irresponsible.” “The reality is that Facebook advertising works. That’s why we have more than a million active advertisers including all of the Ad Age 100. And, countless studies have demonstrated the significant return on investment marketers see from Facebook,” it said in a statement to Business Insider.

For its part, Facebook has been improving its analytics tools to give page managers greater insight into how their posts are performing, and reducing and streamlining its ad offerings. It has also been digging deeper into post data to offer TV networks insights into how their shows are being discussed on its site. Still, as Elliott points out, it could help brands target smaller specific niches who might be interested in their product, or offer more engaging ad formats — but then again, how will users react to a Facebook with even more ads?