November 21, 2014

Facebook Fizzles on Wall Street, But Is Facebook Itself Still Worthwhile?

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A disappointing performance on Wall Street has many bashing Facebook and questioning its value as an investment. But for the small business community, a totally different question arises about the value of the site’s low cost display ads compared to Google ads, for example. The fact is that there are still other ways that small businesses can take advantage of Facebook. So how is the Facebook flap affecting you?

A Deeper Look At the Problem

What poor Wall Street performance means. Jeff Macke, investment pundit, and Todd Schoenberger, managing principal at BlackBay Group, square off on the viability of Facebook after a disappointing first few days on Wall Street. Macke’s view is that the company has no significant way to grow revenue, while Schoenberger insists the value of the social network lies in the number of people it reaches. Yahoo! Finance

The real trouble with Facebook. Beneath all the projections shared by Henry Blodget is one that should concern not only investors but advertisers. Advertising revenue at Facebook is growing much more slowly than at Google. What does this say about Facebook’s prospects and about the value of its ad service? Business Insider

Facebook Advertising Examined

GM says Facebook ads aren’t worth it. It isn’t only the poor performance on Wall Street that has many concerned. Recently, General Motors, a $10 Million advertising client, announced it will be pulling its account, claiming display ads on Facebook aren’t getting consumers to buy. Wall Street Journal

Google ads a better buy. For a closer look at why some companies are concerned about the viability of Facebook ads, take a look at this side by side comparison of Facebook and Google display ads. The first thing to notice, we think, is the difference in performance. Google ads get a response nearly 10 times better than Facebook, according to this infographic. WordStream

Another Facebook Perspective

But hold on there! Just because Facebook ads don’t work for GM doesn’t mean the social network is a complete waste of time for companies hoping to connect with customers. After all, even if GM has pulled its $10 million advertising budget, it still spends $30 million in other Facebook marketing including creating content for brand pages. Forbes

Why Facebook ads may not work for some. Ben Kunz, vice president of strategic planning for Internet and media marketing firm Mediassociates, says the way companies manage the rest of their Facebook presence can have a lot to do with performance of Facebook advertising campaigns. Bloomberg Businessweek

Other Ways to Get Customers

Generate leads with a content marketing tab. You don’t need Facebook display ads to connect with prospects on Facebook. Some simple instructions show any business how to create a tab on your Facebook page offering free whitepapers and other things to your visitors while promoting your Facebook presence and collecting potential leads for your product or service. Rightlook Creative

For some, it’s not the ads but the community. The fact that some businesses can draw plenty of customers without ever spending a dime on ads, just from the community they create, isn’t likely to make investors very happy. But as vintage furniture and housewares dealer Stéphane St-Arnaud discovered, it’s the non-pay services Facebook offers that are sometimes most valuable to small businesses. The Montreal Gazette

Some Last Advertising & Marketing Tips

Still using Facebook ads? If you’re still using Facebook ads after all this, there’s a tip Facebook marketing expert Perry Marshall would like you to remember. Marshall wrote the book The Ultimate Guide to Facebook Advertising and tells Chris Hamilton in this video interview that when it comes to Facebook ads, less is more. Sales Tip A Day

Remember it isn’t Facebook you’re selling. There’s another problem with Facebook, even if you only use it for marketing. The social network is still a great tool for promoting your Website, insists SEO consultant Nick Stamoulis, however, businesses with an online presence should be sure they are boosting their own Website, not Facebook. Trying to get more likes for your Facebook page is important, but don’t go overboard! Search Engine Optimization Journal

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2 Reactions

  1. I agree that Facebook is more than just an advertising platform. I think many small businesses use Facebook for the community not the advertising. I also think many deluded small businesses just use it for advertising. I think these small businesses are missing out. Thanks for the round up!

  2. From experience I’ve found that Facebook is great for building a community and the ads should support that. Whenever I’ve tested Facebook ads that lead to our website – it never works as well as when creating ads for our Facebook page. This tells me that users want to stay within the Facebook experience. Over time, traffic to our website has increased leading to sales growth. All in all, it’s a long term investment.

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