Facebook shares have fallen more than 30% since the IPO in mid May 2012. Last week General Motors announced it was cancelling all advertising on Facebook.
As if that wasn’t worrying enough, a recent online poll of 1,032 Americans conducted by Ipsos and Reuters has found that of those surveyed, 34% were spending less time on Facebook and only 20% were spending more time on the site. Finally, 80% said they had not bought a product based on a Facebook advertisement.
But the firm still announced revenue of US$3.7 billion last year, a majority of that revenue coming from ad sales. And it is hard to escape the potential of those 900 million users.
Facebook’s biggest competitor for online ads is the web search engine giant Google which announced revenue of US$38 billion last year.
Google offers search ads that appear alongside search results. These are considered the most effective means of marketing.
The Nutella example is particularly interesting. They ran a Christmas 2011 ad campaign across TV and Facebook. Nutella announced recently that the Facebook ads accounted for 15% of sales over the Christmas period, far outperforming the TV campaign.
Furthermore, the Facebook campaign garnered 30% online penetration moreover, Nutella discovered that 2.8 million people that saw the Facebook ad didn’t see the TV campaign. This equates to a 29% exclusive reach for Facebook.
So done right, a Facebook campaign should be right for your brand. But like any advertising campaign, the key to a successful campaign is to make sure the content resonates with the target markets so test any campaign before going live.
And of course a Facebook campaign has a lower cost of entry, making it more attractive to Small & Medium sized Enterprises (SMEs).