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GM Says Facebook Ads Don't Work, Pulls $10 Million Account

forbes.com

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Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account

#231

Post by its_so_on »

I bet if GM made more sociable* cars, they would pay a lot MORE to advertise on FB. I'm not saying they should be making sociable cars: I'm just saying GM doesn't necessarily have much overlap with a social experience like facebook. (Neither do loads of other necessary products, like toiletry items, apartments and houses, insurance, etc etc etc.)

Lots of products (and services, experiences like Disneyland or baseball tickets, a local bar, etc) are still very social by their very nature, and a much better match for facebook advertising.

Note: I say this as someone who doesn't know anything.

* http://www.thefreedictionary.com/sociable, definition 2

Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account

#232

Post by praptak »

jrockway wrote: post #184
webwright wrote: post #133

Earlier quoted context omitted.

"I've said this repeatedly: Facebook is a high-risk proposition, particularly as an investment (disclaimer: I work for Google). "Intent" as other commenters have noted is a big part of the story but it's not the only story." As a Google employee, what do you think of Google as an investment? If you look forward 5+ years, everyone is doing much of their internetting via their phone (certainly some or all of that will…

I don't think that any Google employee is going to reply to your comment with advice. "As a Google employee, I say invest!" is not going to get you on the good side of the lawyercats. What I think is interesting about Google is how much voting power the founders retain. Things like a campus of solar panels, space elevators, and self driving cars (not to mention Chrome and Android) make a lot more sense when you reali…

> let's just say laywercat suggests that I don't put it in writing.

LaYWercats are actually werecats (->lycanthropy) who also happen to be laymen. They give terrible legal advice which is unfortunate as they are often confused with lawyercats.

Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account

#233

Post by nikcub »

cletus wrote: post #114

I've said this repeatedly: Facebook is a high-risk proposition, particularly as an investment (disclaimer: I work for Google). "Intent" as other commenters have noted is a big part of the story but it's not the only story. Search can broadly be broken up into at least two categories: 1. Navigational eg typing "b and h" into the browser; and 2. Informational eg "cheap flights to jamaica". I don't know what the make up…

Display advertising has actually overtaken search advertising in revenue, and it is continuing to grow at a faster rate. This is why Google bought Doubleclick.

The US online ad market today is $32B. Growing at 8-12% per year (some estimate 25%) this year.

What is happening is old display advertising dollars are moving online, and it is happening a lot quicker than anybody thought it would. Online will overtake print this year (print will continue to shrink 8-10% p.a). TV is worth about $60B per year. Local ad spending is being hurt the most and is also the largest, bringing in around $140-160B per year.

So the trends are old advertising money moving into online. Online making up 20% of all ad spending last year to forecast ~35% next year. Print and local shrinking, and within online advertising display advertising is now larger and growing quicker than search advertising.

Knowing these trends, adapt this back to working out the companies that stand to gain. Facebook currently has the most time spent online for any website. It will be the largest display advertising inventory pool. People are no longer reading magazines, or newspapers or flicking through the Yellow Pages but rather they are spending a lot more time on the web. Spending a lot more time on the web for most average people, at the moment, means spending time on Facebook.

Being bullish on Facebook, i'd much rather that they be in the position of dominating user time and having a shitty ad product, than having a great ad product and losing user time.

Search advertising may be a lot more efficient and profitable, but display advertising is still king. It is a lot easier to create display advertising inventory than it is for search. Google moving into display advertising is all you need to know.

Facebook can fix the ad product and experiment with it over time, finding a way to best adapt those offline dollars to online display advertising. Building a site with a bilion users and a pretty good moat is a lot more difficult.

Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account

#235

Post by drstrangevibes »

throwaway63-90 wrote: post #201
cletus wrote: post #114

I've said this repeatedly: Facebook is a high-risk proposition, particularly as an investment (disclaimer: I work for Google). "Intent" as other commenters have noted is a big part of the story but it's not the only story. Search can broadly be broken up into at least two categories: 1. Navigational eg typing "b and h" into the browser; and 2. Informational eg "cheap flights to jamaica". I don't know what the make up…

Finally a sensible analysis. Some people are just in a kind of Facebook daze. "Hey, they had income for 3 years in a row. One billion last year. This is a sure winner." They refuse to look at what Facebook actually does. People will probably read your post and think you're biased because you work for Google. But there's a huge difference in what Google Plus can accomplish. You guys have the search engine data (intent…

what facebook does: monitor your shit and send it to the government. They arent going anywhere

Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account

#236

Post by valisystem »

kposehn wrote: post #99
mmaunder wrote: post #73

Facebook's root problem is intent. Users who are googling something and seeing AdWords ads are looking for something and often the thing they're looking for shows up as an ad so they - suprise! - click the ad and often become a conversion once on the site. With Facebook there is zero helpful intent. The only intent when you're on Facebook is to use Facebook. And if you do click an ad, you're less likely to become a c…

> With Facebook there is zero helpful intent. The only intent when you're on Facebook is to use Facebook. It isn't about intent - it is about interest. > And if you do click an ad, you're less likely to become a conversion because your intent is still to get back to Facebook as soon as possible and see the rest of Dave's party photos or whatever. Not necessarily. I'm working with a customer right now where I have a 2…

Well it does not seems to be all about intent or interest, but just two distinct ways to provide insightful advertising.

But still, the intent model of google adwords seems so much more stronger, whereas facebook's interest model just look like a centralized and refined adsense. Google has long given emphasis to the long tail, the specialized interest that bring as much revenue as the mainstream one.

The intent model is clearly stronger here, as searches have an explicitly parameterized specific content, whereas the interest model can only bring up revenue on frequent and common patterns (such as you say, movie tickets), since you cannot anticipate rarely occurring interests.

Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account

#238

Post by nikcub »

webwright wrote: post #133
cletus wrote: post #114

I've said this repeatedly: Facebook is a high-risk proposition, particularly as an investment (disclaimer: I work for Google). "Intent" as other commenters have noted is a big part of the story but it's not the only story. Search can broadly be broken up into at least two categories: 1. Navigational eg typing "b and h" into the browser; and 2. Informational eg "cheap flights to jamaica". I don't know what the make up…

"I've said this repeatedly: Facebook is a high-risk proposition, particularly as an investment (disclaimer: I work for Google). "Intent" as other commenters have noted is a big part of the story but it's not the only story." As a Google employee, what do you think of Google as an investment? If you look forward 5+ years, everyone is doing much of their internetting via their phone (certainly some or all of that will…

> If you look forward 5+ years, everyone is doing much of their internetting via their phone

A lot more time is being spent on mobile, but it isn't at the cost of desktop computing. Rather, the entire pie of how much time is spent online and how many people are online is growing as a whole.

This is why the online ad market is going ganbusters with growth (see my comment above) at the cost of the traditional ad markets (print, radio, etc.)

Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account

#239

Post by loverobots »

richardw wrote: post #225
diminish wrote: post #218

Earlier quoted context omitted.

I have been doing paid advertising with a few million dollars budget, with a strong conversion focus mostly on google, social web sites and content web sites. Social web sites have low relevance, low CTR for most purposes. However they are an ocean of impressions. Facebook has a chance to replace the advertorial parts of cheap TV non-prime time. If you use it properly you may get conversions though a bit lower qualit…

The 'impressions' is very similar to the dot-com 'eyeballs' though. Luckily they have what seems like a lock-in on those impressions so they should have a decade or two to work it out! But you're absolutely right - it's basically TV-type advertising.

Conversions may be low but then clicks aren't $40 each ( to use an extreme example.) Ye

Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account

#240

Post by nikcub »

billpatrianakos wrote: post #211
cletus wrote: post #114

I've said this repeatedly: Facebook is a high-risk proposition, particularly as an investment (disclaimer: I work for Google). "Intent" as other commenters have noted is a big part of the story but it's not the only story. Search can broadly be broken up into at least two categories: 1. Navigational eg typing "b and h" into the browser; and 2. Informational eg "cheap flights to jamaica". I don't know what the make up…

Not exactly your main point but I have to agree that there's nothing stopping Facebook from being the next MySpace. Seriously. Not a thing. I think at this point the massive user base and their investment (their friends, photos, life in general) is about the only thing keeping them from switching. But even that can be overcome by others simply by making the switch easier by importing that information (think using Fac…

There seems to be a line of argument in this thread that goes something like this:

1. Google do very well with search advertising because it has intent

2. Facebook advertising is not based on intent

3. Ergo, Facebook advertising sucks

Display advertising is a very, very large part of overall advertising. Display advertising is larger than search advertising online. Further, intent or search based advertising relies on display advertising to generate interest.

95% of every dollar spent on advertising around the world each year is spent on display advertising. It works. It works so well that Google are getting into it to maintain growth (Doubleclick acquisition).

It also scales a lot better since intent inventory can not be easily generated (and funnily depends on display advertising).

It will just take a while for Facebook to figure it out, but i'm sure they will. Too many people spend too much time on Facebook for display advertising there to be ignored. It doesn't have to even be super efficient with the numbers they are hitting.

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