Facebook’s Ted Zagat: ‘Clicks Don’t Matter’

“Clicks don’t matter. There is zero correlation between online clicks and offline ROI.” That’s Facebook‘s Ted Zagat during a keynote at Street Fight’s Summit West on Tuesday. The long-time president of the reviews company admitted that the social networking giant could do a better job of emphasizing the relationship between digital engagement and reach to its local merchant advertisers.

“Facebook is not always the easiest service to use, and our ad products are no exception,” Zagat said. “The challenge is that small local advertisers don’t have the same measurement capabilities.”

Now more than ever before, Zagat believes SMBs have the opportunity to adopt the best practices of Facebook’s largest advertisers—primarily, relying on mobile for personalized targeting, consumer messaging, and location-based marketing. By changing the conversation from engagement to reach, and keeping things as simple as possible for customers, he believes Facebook can transform the way local merchants market services online.

Zagat said small local businesses are often left wondering what scales and what targeting means for them in a visceral way. Using the example of a fashion-forward women’s snowmobiling brand, Zagat explained how marketers are able to reach consumers who are interested in the intersection of their interests and demographics.

“We always think first and foremost about people when we’re designing marketing experiences,” he said.

From a people perspective, mobile marketing involves a high level of relevance. Over time, as more data goes into Facebook’s system and more ads are included in the auction, the company will continue to improve the content it serves to its users.

Changes in the mobile marketplace have been rapid. Just two years ago, Zagat said Facebook was allotting zero dollars of revenue from mobile. Now, Facebook and Instagram represent 22% of mobile time spent in the United States. The company has passed 25 million active business pages, with new figures expected to be released later in the day.

“Pretty much everything we do is mobile first, and sometimes we don’t even develop a certain feature for desktop,” Zagat said. “Now the mobile engineers are integrated into every product team, so we can think consistently across platform.”

Zagat went on to outline best practices for small local retailers, focusing on issues such as reputation, mobile messaging, and location-based marketing.

“Location-based marketing is here, and if we handle it correctly, we have a great opportunity to help local businesses reach customers better than ever before,” Zagat said.

Forty-three percent of small local advertising dollars are now geared toward local awareness, a figure that Zagat sees growing in the coming years as tools for generating customer reviews, testimonials, and endorsements become ubiquitous.

“Reputation is really brand awareness for a small store,” Zagat said. “We think that testimonials and endorsements, along the lines of what Stik is doing, are pretty interesting.”

Stephanie Miles is a senior editor at Street Fight.