This document summarizes a Nielsen report analyzing the effectiveness of Facebook ads. The study found that earned media through social sharing significantly increased the impact of paid ads. Exposure to both paid ads and subsequent organic shares from friends led to higher brand awareness, ad recall, and purchase intent compared to paid ads alone. The report recommends that advertisers use paid media to drive more earned sharing, in order to leverage the combined power of both paid and organic impressions.

1. http://mashable.com/2010/04/20/nielsen-facebook-ad-report/
The Formula for Effective Facebook Ads [REPORT]
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In order to understand the value of a Facebook
ad impression, Nielsen analyzed over six months of responses from 800,000 users to
more than 125 Facebook ad campaigns by 70 different brand advertisers.
The study — after analyzing reach via impressions and effectiveness of impressions —
concluded that earned media and social advocacy made Facebook users more likely to
notice ads, absorb their content and make purchases.

2. Paid vs. Earned Media
To arrive at the aforementioned conclusion, Nielsen looked at three types of impressions
on Facebook and categorized them as either paid media, earned media or both.
• Homepage ads: Above-the-fold ads that contain ad creative as well as an option
for users to engage with the brand (e.g. “Become a Fan”). This is an example of
paid media.
• Social impressions: Homepage ads that include social context, like the names of
users’ friends who are already fans of the brand. This is an example of a hybrid ad
that is both parts paid and earned media.

3. • Organic impression: Social stories that appear on the homepage of friends of
users who have engaged with a brand or become a fan of that brand. This is an
example of earned media.
Earned media is being used to describe brand mentions on Facebook that are broadcasted
(“shared”) by the consumer, whereas hybrid organic impressions offer a more controlled
way to generate earned media from paid advertisements.
The data clearly shows that the social advocacy of earned media played a substantial role
in the performance of homepage ads on Facebook. According to the data, ad recall grew
from 10% to 16%, awareness doubled from 4% to 8% and purchase intent quadrupled
from 2% to 8%. That last metric is perhaps the most telling, and shows that when a
Facebook user advocates for an ad, the ad is 4x more likely to result in a purchase.
In the organic impression department, Nielsen found that “those users exposed to both the
‘paid ad’ and the organic impression remembered the ad at three times the rate of those
just exposed to the paid homepage ad,” and that “homepage ads increased awareness of
the product or brand by 4% on average, but exposure to both homepage ads and organic
ads increased awareness by a delta of 13% versus the control group.”
The bottom line is that the more the user was exposed to paid and earned media — with a
combination of both packing a powerful punch — the greater the ad recall, awareness and
purchase intent.
Tips for Advertisers
Nielsen recommends the following tips for advertisers looking to capitalize on their data:

4. • Start with engaging homepage impressions; these will drive more organic
impressions and the engagement rate goes up as the organic impressions go up.
• Buy paid media on social networks; it’s the catalyst for more earned media.
• Balance reach and frequency across homepage, social, and organic impressions.
You can read the full report below for even more information and tips on how to leverage
earned and paid media on Facebook.