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Facebook's marketing biz dissed by Forrester

While the social network collected more than $4 billion in ad revenue last year, the research firm says that doesn't mean Facebook advertising actually works.


The first line in an open letter from research firm Forrester to Facebook CEO Mark Zuckerberg is: "Facebook is failing marketers."

Apparently, Nate Elliot, Forrester's vice president and author of the open letter, doesn't mince his words. Elliot is drawing his conclusion from a study Forrester published on Monday that surveyed hundreds of executives from large companies in the US, Canada, and the UK. The results of the study claim that placing ads on Facebook doesn't necessarily drive users to brands.

Here's more from Elliot's letter:

I know this statement sounds remarkable, perhaps even unbelievable. After all, you offer marketers access to the largest audience in media history and you know a remarkable amount about each of your users. As a result nearly every large company now markets on Facebook. Last year your company collected more than $4 billion in advertising revenues.

But while lots of marketers spend lots of money on Facebook today, relatively few find success. In August, Forrester surveyed 395 marketers and eBusiness executives at large companies across the US, Canada and the UK -- and these executives told us that Facebook creates less business value than any other digital marketing opportunity.

Forrester says there are two reasons why businesses are unhappy with using Facebook as a marketing tool. Elliot writes that, first, the social network shows sponsored posts to only 16 percent of a brand's fans and, second, ads get lost in the "ever-growing cache of social data."

According to Forrester, executives said Facebook's display ads were less effective than display ads bought on other sites. When Forrester asked executives to rate 13 different online marketing sites and approaches, Facebook came in last -- behind Twitter, Google+, and LinkedIn. On-site ratings and reviews, search marketing, and e-mail marketing got the top three spots.

For its part, Facebook appears to be trying to boost marketing. In August, the social network hired its first-ever chief marketing officer and last week it amped up mobile ads by introducing a video component. As of this week, Facebook will also be allowing ads to run on Instagram.

CNET contacted Facebook for comment. We'll update this story when we get more information.