What do you think of Facebook ads? As businesses and marketers, do you find them useful? From the consumer perspective, are they annoying? Have your eyes already realized where they need to go to avoid them?

As you ponder these questions, let’s take a look at the Facebook advertising platform.  When Facebook became open to all users, advertising became inevitable as a monetization model. Since the ad platform was rolled out several years ago, it’s gone through many different phases and developments. Most would probably agree that these changes have been for the better.

The real question is: Are Facebook ads providing real value to businesses?

According to a couple of recent studies that were incidentally released just before Facebook’s Q3 earnings came out, they do. Kenshoo Social, a digital marketing technology company, released its quarterly review of Facebook’s advertising performance and found considerable improvements from Q2. Some notable improvements include:

• Ad impressions:  Up 13%
• Click Volume:  Up 14.4%
• Cost Per Click (CPC):  Down 9%
• Conversion Rate (CVR):  Up 2.36x
• Conversion Volume:  Up 2.85x
• Revenue:  Up 2.16x
• Revenue Per Click (RPC):  Up 1.76x
• Return on Investment (ROI):  Up 3.04x

Kenshoo Social believes that changes Facebook has made to its ad platform should largely be credited with these improved performances. For instance, Facebook has given advertisers greater targeting capabilities and more formatting options. Also, as Facebook continues to provide a better product for its advertisers, they, in turn, are becoming more experienced, a.k.a. better, with their approaches.

In a blog post about the study, Kenshoo Social’s Senior Director of Product Marketing Todd Herrold made a powerful statement regarding Facebook ads:

“Facebook is a powerful direct response channel that drives significant sales, revenue and ROI… [and] Facebook continues to outperform with major brands driving more sales, more revenue and higher ROI from Facebook Ads.”

A second study from Adobe, which is the first annual Social Media Intelligence report, also found positive developments in Facebook ad performance. The study specifically looked at more than 131 billion ad impressions and 4.3 billion social engagements on Facebook. It found that, overall, Facebook’s ad clicks, ad impressions and the advertiser’s return on investment (ROI) increased in 2013 from 2012. Particularly speaking, Facebook ads were clicked 29 percent more in 2013, the volume of impressions was up 85 percent and the ROI was up 58 percent year over year.

Interestingly enough, well-acclaimed research firm Forrester also just released an open letter to Mark Zuckerberg explaining why it thinks the social giant is “failing marketers.” The company conducted a survey as well that covered marketers and ebusiness executives across the U.S., Canada, and the UK. Based on this study, Facebook does NOT create business value:

This news has raised quite a stir with outlets such as Venture Beat calling the report “an embarrassment” and “distasteful.”

Facebook too responded to the report saying it was “illogical and… irresponsible.”

So, which is it? Are Facebook ads doing great, or are they a failure?

Though the story is still developing, business leaders and marketers ultimately need to analyze this data and this news based on your own perspective. If we’ve said it once, we’ve said it a million times – there is no formula for social media. What works for one company does not necessarily work for another. Yes, it can in some cases, but if there were a secret formula for success on social media, all companies would be social media rock stars. Unfortunately, it doesn’t work this way.

In this particular matter, it does seem clear that Facebook is continually improving its ad platform. Also, advertising on Facebook has been around for a while, so marketers who embraced it early have likely become better at it as they have gained more experience with it.

However, as you consider if Facebook ads are the way to go for your business, think about your own company goals. While studies are great tools to see what the trends are, what you’re trying to achieve with your business needs to be the ultimate decision maker.

Images courtesy of Adobe and Forrester.