Facebook’s Advertisers We Have a Problem Houston
Within less than a few weeks, Facebook goes public on May 18, 2012, with it’s Initial Public Offering -IPO to preferred investors.
The clout for this IPO is 900 plus million users, but who are these users. Well most of them live outside of the USA and Canada markets, but we don’t know much else about them.
Apparently Facebook’s clout or claim to fame is worrying advertisers and they are asking those same questions, who are these people?
Are they 13 year old users, are they mostly living in India, what are the demographics of Facebook users? No one knows except for Facebook. Will advertisers get their money’s worth buying ads on Facebook or is Facebook making all the money?
Facebook Has No Metrics – We Have a Problem Houston
Facebook has not divulged it’s own metrics which is the website’s conversion rates, or the evaluation the performance of advertising. Did anyone check Conversions for Dummies yet? This pie and the sky discussion of how much money Facebook is worth begs the question where are the figures to back it up? The “Likes” and “Sponsored Post Ads” means very little when advertisers are laying down big cash for ads on Facebook.
If for instance an advertisers pays $20,000 and only gets 5,000 visitors to their ad link, which produces 25 sales, is Facebook good for their business? There is no measurement that Facebook provides on conversions, or key performance indicators for their traffic. As a business owner, you’d have to work on blind faith to advertise on Facebook.
What Frustrates Facebook’s Advertisers
“Facebook relies on a “trust me” mentality, luring advertisers with its big, addicted audience. But, these companies have started getting antsy. The more money they pump into this murky “money-maker” the more they want to know what its getting them. “Clients, for the very first time, are starting to question the measurement issue” Martin Sorrell, CEO of WPP, an advertising and marketing firm said at a conference, note Raice and Vranica. “[They] are increasingly starting to look at the value of those investments,” he continued. That’s a very hard something for Facebook to provide. Ad clicks don’t necessarily translate into direct sales.” Yahoo News
Facebook is actually keeping that information private from advertisers, your supposed to “Trust” Facebook. Facebook does not allow advertisers third party cookies for advertisers to track their clicks.
Recently, the company has been charged with selling private user information to the US government in the name of cyber security, trust has become an issue for users as well.
Currently, Facebook has no ads in it’s news feed accessed by Smartphone apps however they are planning on changing this with featured local based ads and stories.
Facebook’s revenues in the last quarter dropped 7.5 percent to start off 2012.
The Atlantic Wire