In December, Facebook announced a new initiative called Nextdoor, an app for advertisers that allows users to connect with potential customers through an ad hoc network.
In February, the company revealed that it had rolled out more than 1 million Nextdoor ads in the U.S. and Canada over the past two months.
But according to new research from the analytics company Quantcast, those ads are nowhere near as popular as they were in March.
Quantcast estimates that only 16% of users have clicked on an ad on Facebook that contains a link to the next page of content.
Facebook’s Nextdoor campaign is so weak that Quantcast found that only 7% of those users clicked on ads that contained a link back to the page that originally featured the ad.
The problem is not just that Nextdoor doesn’t have a lot of traction on Facebook.
It’s also that the company’s efforts to make advertising more useful to its users has only made it harder for people to find the ads they want to see.
“We’re seeing the kind of ad experiences that people are more likely to have on Facebook and they’re also less likely to be able to click on them,” said Matt Dussau, Quantcast’s senior director of network analytics.
The result is that “Facebook has less value to advertisers, which is really unfortunate.”
Quantcast estimates the average CPC for a single Nextdoor ad is $1.36, meaning that an average Facebook ad would cost $1,200 to $1-2,000.
That’s a lot less than the $2,600 average CPC advertisers get from Google’s AdWords program, which offers $4.99 for a six-second ad.
“That’s a huge difference,” Dussaus said.
The next question is why is the ad industry struggling so badly to fill the gaps in Nextdoor’s search?
In February the company launched a new ad platform called NextFaces, which makes it easier for users to discover ads by showing them in a grid on the home screen.
But its user experience is not as intuitive as Facebook’s.
For example, it has a confusing layout for viewing ads.
For advertisers, it means they have to pay a premium to get ads on Nextdoor.
Quantcast also found that NextFace users were less likely than people on Facebook to click through to the Nextdoor home page.
The company believes this is because people on NextFaced are more comfortable viewing ads and that it makes them more likely that a user will click through.
But the NextFacing search interface is far less intuitive than that on Facebook, which often requires users to click to view ads.
And there are other problems.
For one thing, users are only seeing a portion of the ads that are displayed on NextFace, not the full inventory.
“NextFaces doesn’t display all the ads, and the amount of ads is really very small,” Dusau said.
“If you’re viewing ads on the NextFace home page, you’re not really seeing all of the other ads.”
NextFaced users also don’t see the ads for things like hotels and vacation packages that are featured in NextPage, which also has its own search interface.
It also lacks ads for services like Yelp and TripAdvisor, which both have extensive advertising networks.
“It’s really disappointing because NextFades is one of the best ways to reach new audiences and it’s a great place for advertisers to reach their audiences,” said Robyn Riddell, a senior product manager at ad network Nextdoor who helped launch the company in 2015.
But, she said, “the problem is that NextPage has a lot more advertising space.”
Advertisers need to make a lot fewer ads to be successful on NextPage.
For a typical ad, an ad unit typically spends $50,000 to $60,000, according to AdMob.
And while ads are usually placed on the top of NextPage’s home page for less than $1 a click, the ads are rarely displayed until users have opened the NextPage app and then clicked on them.
Quantnet found that ads that featured NextPage ads had only 3% of their total reach.
For ads that have been placed on NextPages home page and then appear in the search results, the Nextpage ads typically have 1-3x the reach of ads that appear in Facebook ads.
But that’s not the case for ads that haven’t been placed at all.
Quantmet also found a similar pattern: Only around half of ads on Facebook ads were placed on an advertiser’s homepage.
For example, a brand’s next ad would likely show up on a brand-specific page.
But for ads placed on other sites, they might appear as a direct link to NextPage or a “featured” ad on the same site.
“They have very limited reach in the NextPages ad network,” said Dussauer.
Advertiser groups have