Companies ask: Does advertising on Facebook pay?

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Facebook has more than 900 million users who log in at least once a month, but it makes only a few dollars per year from each one, chiefly through advertising. Advertisers have been complaining that it’s difficult to make good use of Facebook.

A person briefed on GM’s advertising said the company will stop running paid advertising on Facebook by mid-summer because advertising agencies and third-party companies that reviewed the ads determined the company wasn’t getting much back for its $10 million annual investment.

The person, who spoke on the condition of anonymity because GM’s ad strategy is private, said the Facebook ads did not entice consumers to consider GM products.

GM will, however, maintain Facebook pages for all of its brands and models. Those pages are popular and do attract customers to products, the person said. But they don’t make money for Facebook.

GM spends about $30 million a year creating content such as pictures and videos to post on the pages, the person said.

More than 3.1 million people on Facebook “like” two pages dedicated to the Camaro muscle car, and 1.2 million “like” the Chevrolet brand. GM also has brand pages for individual countries.

GM said that it constantly reviews whether its advertising in all media reaches the right age and income demographics. It could reconsider Facebook ads later in the year, the person said.

GM’s advertising spending is a tiny fraction of Facebook’s total 2011 advertising revenue of $3.15 billion. But the automaker’s decision could be symptomatic of Facebook’s weak appeal to advertisers.

The social network’s chief moneymakers are so-called “display ads” _ boxes that show up on the right side of Facebook’s page. They’re tuned to users’ interests and activities, but they don’t connect as well as Google Inc.’s search-based ads.

The problem may not be just Facebook‘s. The advertising world is set up to take advantage of one-way media like magazines and TV, not two-way channels like Facebook, and may need some time to adjust.

Ford Motor Co. is taking the opposite tack of GM. It’s set to increase spending on Facebook advertising this year, said Scott Monty, Ford’s global head of social media. Ford sees the site as a way to build long-term relationships with customers, not just as an online billboard.

Ford complements display ads by sponsoring stories in the news feeds of people who subscribe to its pages. People see them in the area where their attention is focused, rather than in the right-hand column, Monty said.

It also buys ads that appear when a person logs out of Facebook, with images and descriptions of products such as the Ford Mustang, he said. He wouldn’t say how much the carmaker spends with Facebook.

The value of Facebook ads, Monty said, can’t be measured simply by the number of clicks they get from viewers.

“It’s a holistic kind of a relationship thing rather than a single transaction we’re looking for,” he said.

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