Tuesday, May 22, 2012

Facing Up To It

A lengthy analysis carried by Bloomberg Businessweek purported to give reasons why General Motors dropped its $10 million Facebook advertising package.  Among them was GM simply is cutting back on ads in its new “lean-mean” business mode (GM cancelled future Super Bowl advertising at about the same time). Another was that the auto maker doesn’t know how to utilize Facebook advertising properly.

The thoughts were advanced to counter the idea that perhaps Facebook advertising simply doesn’t work. The analysis dismissed that possibility by saying it works for some products, but not for others. But the author didn’t name a single product in either category.

Most web advertising is sold on the basis of clicks on the ad, which supposedly translates into a percentage of sales. All of that is theory. No one has proved the theory has merit, and probably no one ever will. People can click to be amused by a dancing cartoon snake, and have no interest whatever in buying the snake oil being promoted.

Although I’m not a big Facebook player, I look at my page fairly regularly. I have never even read an ad on Facebook, much less acted under the influence of one.  We buy lots of things online, but we almost always do that after searching for the item, not because an ad attracted us to it.

Is it possible that many big-time advertisers have not figured out how to effectively “talk to” the millions of potential buyers the Internet has the ability to deliver?

Is it possible the huge Facebook empire is built on a faulty business model?  Is it possible some shrewd stock market players knew that when the stock price dropped instead of roaring upward shortly after the company went public last week?

What do you think?


schmidleysscribblins,wordpress.com said...

You can block Facebook ads i think. I don't see many, but I do see the odd group membership invite.

Possibly FB is not the best place to advertise, unless you are a teenager, politician, or flash mob looking for trouble. Dianne

joared said...

I have a FB acct I limit to only close friends and family -- most don't use FB much and neither do I. Have never clicked on an ad there, but since I don't navigate around on it much don't recall seeing any ads -- maybe I have them blocked.

Perhaps only the folks, whatever their age group, who are more enamored with the site and spend lots of time there are the ones who might respond to ads.

Kay said...

I agree completely. I've never noticed the ads on Facebook either. I wouldn't buy Facebook stock.