As the markets react to Facebook’s IPO, the big question for Madison Avenue is whether paid advertising is effective on the social network.
The New York Times declared that advertisers are underwhelmed by, and sceptical of, Facebook’s IPO.
Other advertising bigwigs say Facebook’s advertising potential is too big too ignore. GM spoke by pulling $10 million ad budget.
Here’s a round-up of what anybody who’s anybody is saying about Facebook ads.
On why Facebook is too big for advertisers to ignore:
- “Facebook’s audience is too big too ignore,” said Lucy Jacobs, COO of Spruce Media, whose clients include LivingSocial. “Brands need to be on FB. The key is building a presence & content that resonates & then once you understanding the content fans are resonating with then you choose to amplify this content.” She believes that Facebook is all about world of mouth marketing.
- “We are only just beginning to understand the potential for brands and the return on investment on ads there too,” said David Jones, CEO of ad agency Euro RSCG Worldwide, told Reuters. “TV has been going on for 50 years so everyone has it down pat. Many of the advertising platforms on Facebook are only a year old. This will take some time.”
- When asked about GM pulling its Facebook ads, Buddy Media CEO Michael Lazerow told CNBC that “It’s a silly story, because it’s like saying you’re not advertising on TV ever again in 1950—of course you’ll advertise at some point.”
- Peter Kim, chief strategy officer at Dachis Group, told Fox Business that GM pulling out of Facebook “will make people rethink how well their investments are working on Facebook, but I can’t see a bunch of people following suit.”
- “FACEBOOK IS NOT A PUBLISHER. FACEBOOK IS A PLATFORM,” Deep Focus CEO, Ian Schafer, emphatically wrote in Ad Age.
On why Facebook and advertisers are not a great match:
- “It’s one of the most powerful branding mechanisms in the world, but it’s not an advertising mechanism,” Martin Sorrell, chief executive of WPP, told the New York Times. “There’s a lot of potential but it’s not a slam-dunk,” he told Reuters.
- “Facebook’s popularity doesn’t come as a surprise,” said Hannah Kimuyu, director of paid media content at Greenlight, said in a statement. “However, with over 30 per cent of respondents saying they ‘strongly distrust’ Facebook with their personal data, Facebook’s advertising program has an upward struggle.”
- “My colleagues and I have spoken with several other advertisers who were already thinking of putting their dollars elsewhere,” Melissa Parrish, an analyst at Forrester, told the New York Times. “Now that G.M. has done so in such a large and public way, many of the fence-sitters will know that they’re not alone.”
On why paying for Facebook ads is a waste:
- John Coleman, CEO of small shop powerhouse The VIA Agency, told BI that while Facebook free brand pages are important, it’s unnecessary to pay for advertising on the site. “We’ll use Facebook for apps and other engagement but we’re using other [paid] media to drive that.”
- “Most brands who advertise there advertise just one thing: ‘Like us’,” Jack Hollis, vice president of Scion, told Forbes. “Our ads aren’t about liking us. We’re putting out content. We don’t see a need to be [on Facebook] in a major advertising way because it kind of gets lost among all the brands that want to be ‘liked.’ If you ‘like’ us, have a relationship with us”
- While Steve Goldner, senior director of social media at digital strategy agency MediaWhiz, told BI that GM’s problem with social media has nothing to do with Facebook ads, he had some negative comments about Facebook, too. “The reality is that Facebook advertisement, by itself, is not a great use of precious marketing dollars,” Goldner said. “Facebook has done a poor job positioning and describing how their platform drives quantifiable business results. Facebook is not the equivalent of having a social media strategy and it is time for Facebook to communicate how they are part of a winning solution and stop making ill-advised marketers believe they are the social media solution.”
On Facebook mobile:
- Paul Sundue, director of digital strategy and production at DDB New York, noted that “the Facebook mobile experience is lacking right now,” at a Mobile Marketing event during Internet Week. “The mobile experience doesn’t support the tabs [that advertisers create for the normal site] at all.”
On what the future holds:
- “I think brands are still trying to get their arms around what Facebook means to them,” Chris Copeland, CEO of WPP’s GroupM Next, told Ad Age. “Is it a click play? Is it an exposure or impression play? Will it be measured in digital GRPs? There are still a lot of unknowns.”
- “Facebook’s future is really with SMB display advertisers,” Victor Wong, CEO of local display advertising firm PaperG, told BI. “Facebook, like Google, runs ads in a 2nd price auction format. If it had more bidding volume from the millions of SMB advertisers (rather than the limited five hundred Fortune 500 companies), it could drive up the clearing price of ads even if the winning bidder is the same.”
And then there’s Donny Deutsch:
- Although Donny Deutsch, chairman of Deutsch Inc., had nothing to say about how Facebook relates to the advertising world, he told Jay Leno that he has beef with the social networking site. “Before they collect their hundred billion, make this thing safer,” he said, referring to how kids are often bullied on Facebook.
Did we miss anyone? If so, email [email protected]
- GM Pulled Ads After Facebook Begged It To Use Free Media
- FURY AT FACEBOOK: General Motors Was ‘Mental’ To Pull Its Ads, Say Sources
- FACEBOOK’S WORST NIGHTMARE: After GM, Here’s How The Other Dominoes Could Fall
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