Facebook is far to useful to the Government to go anywhere. I bet GM knows this, I suspect a case of "dump and pump"
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GM Says Facebook Ads Don't Work, Pulls $10 Million Account
241–250 of 267 posts
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#242I'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…
"There is nothing preventing Facebook from being the next Myspace"
You could make a similar argument about Google becoming the next Yahoo! when someone devises a better search algorithm/interface.
Most technology stocks are high risk propositions, with the exceptions of huge multinationals like IBM (their size and government contracts make them harder to challenge).
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#243I'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…
> It has no search engine (which is how it could monetise its user information)
There were rumours Facebook were sitting on very powerful search capabilities they were looking to release post IPO.
Given the personal data held and time users spend on their platform, the potential is quite high.
They may not have much control on mobile but their apps hold your contacts and messaging functionality.
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#244Saying Facebook advertising doesn't work is like saying display ads don't work. Sure, the closer you are to the transaction the more value you provide:
- Facebook: CPM - bill boards : consumer in the position to buy, but not given it much thought
- Google: CPC - yellow pages : consumer in the position to buy and is actively looking
- Groupon: CPA - re-seller : consumer has decided what to buy and is purchasing
But whilst Groupon can provide more value, the pool of potential consumers it can reach is smaller. Same with Google (informational queries only). Facebook reaches the consumer in the very early stages of the purchase-funnel, before there is clear "intent". Same as bill-boards, display ads will always have value - after all advertising is about making us want something we haven't already planned to buy, otherwise its wasted cash (think groupon vouchers sold to existing customers). And whilst the conversation rate (clicks) on Facebook ads will naturally be lower, there are many more customers at the pre-intent stage (everyone in the world).
Sure a display ad for a Ford may not have great immediate conversion rate (clicks). What about a bill-board or a magazine ad? Yet do they have no value? If I would be considering purchasing a car within the next year, but not actively searching for one, then an image of some appealing product would actually get stuck in my head, and when I come to search for a car on some price comparison site - it just might be a Ford I saw a few weeks ago.
Each of these models have issues though:
- Groupon - a large number of buyers are already existing customers. GroupOn is only necessary because there isn't a platform for merchants to issue their own vouchers. If there was, they could advertise those vouchers on Facebook/Google and not pay groupon their brokering fee.
- Google - provide a free yellow-pages service. Instead of an alphabetical listing they aim to provide the "best" results first, so the only way to make money is to display ads next to those results for companies that haven't made it to the top. Why would anyone select those companies? The only reason I can think of is if these companies offer temporary aggressive discounts like on Groupon. If G displayed "sponsored ads" as banner ads so people wouldn't get fooled into thinking it's a result - would anyone still click on them?
- Facebook - unlike a magazine which has associated readership with a particular set of interests (eg car enthusiasts) - everyone is on Facebook. A niche social network for car enthusiasts would get a better ROI for GM then blasting their cars at everyone in the world. Need more single girls from NYC in the age group of 20-25 to join your dating site? Facebook will probably deliver great ROI there cause it can target ads by all these attributes.
Facebook has to expand its targeting capabilities, and that means gathering more data: my interests, my income, estimated net worth, what car I drive, where I live, who I have my mobile contract with, etc. If FB knows that I just graduated and got a job that pays enough to lease a Ford, and my commute time to work is over an hour - GM would probably get a decent ROI. If I visit enough car-related websites with the "Like" button on there, Facebook should know I'm interested in cars.
As Facebook builds a more detailed profile of me - it will deliver ads that predict my purchase intent, and in theory, that's a great position to be in.
In practice, I think people prefer to "pull" ads rather than having them pushed at us. The old broadcasting model of advertising was necessary when people couldn't poll the world for "whats the best car in my price range". As more information becomes available, people won't need companies telling them which products to buy. Think of Amazon - you don't purchase based on ads, but based on reviews and ratings from other people. Humans have become much more connected and knowledgable when making purchasing decisions, so ads matter less and less. I don't remember the last time I bought anything because of an ad, instead I read reviews left by other people. The advertising-intermediary is no longer necessary, businesses simply need to create great products. And Facebook is a great product - for sharing photos, keeping track of friends and killing some time. I wish they'd concentrate on making that product better, and I'd happily pay $1 per month to use it. Even at $1 per year - they would make as much as they currently do from 1 billion people. What will make me leave Facebook is the ads in my newsfeed, not the 1 buck a month I'd have to pay. My time is more valuable than $1 / hour, so if I decide to waste several hours on Facebook a week - then I can certainly afford to pay $1 / month.
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#245I can't help but recall all these Anti-Baldness treatment ads I get on my facebook all the time - I truly believe the only thing that triggers them is my being a 31-yo male (note - I will probably never need these treatments, ).
My suspicion is that either the GM advertisers are complete muppets, or Facebook's offering in self-service targeted advertising simply isn't sufficiently good at catering to this specific market's needs.
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#246The thing is, they don't. They really don't. I hardly even notice them, like there's some kind of mental block that prevents the brain from perceiving the ads. Same thing applies to Google ads, I completely ignore them. Has anyone else noticed such behavior in themselves?
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#247Earlier quoted context omitted.
Perhaps the author has been sitting on said story for a while and decided to publish it at point of maximum impact? It's likely to get a lot more attention now than it would do at almost any other time.
Ahh... the good ol' news hook. relevant: http://www.themillions.com/2012/04/the-berenstain-bears-and-...
The more I think about it, this line of possibility seems at least equally likely to he PO'd GM theory.
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#248Earlier quoted context omitted.
No one is saying that Facebook, as it currently is, is better or more effective than Google in terms of user monetization. My point is that their current methods are terrible and they still bring in $4B per year. If they can actually increase the quality of their user monetization, then they certainly could bring in a lot of revenues. Also, no one is saying that Google's current way of advertising isn't superior to F…
If they can actually increase the quality of their user monetization, then they certainly could bring in a lot of revenues. Ok, but that's like saying if they can make more money per user they'll make more money. It feels like that's just restating the problem. So what things would happen for them to "increase the quality of their user monetization"? I'm looking for a lever they could pull or push to get more cash ou…
Watching football is a very unmotivated state of mind for the viewer to be in, but companies still spent over $200M in 2012 to advertise for the Super Bowl. The only commercial any of my friends remember is the one with the hot chick for the car company that I can't remember. Companies still spend billions upon billions of dollars per year on advertising not based on search, and simply based on number of eyeballs and potential demographics.
Just because you don't put useful information on Facebook doesn't mean that hundreds of millions don't as well. There are literally hundreds of millions of people that likely put very relevant information on their profile, which means that targeted ads might work for them. The inverse of you is that I use incognito mode on Chrome, so Google likely knows nothing about me, since I don't store any cookies. It might be able to divine something from my IP address, or maybe there's a backdoor in Chrome that overcomes incognito mode for the purposes of Google ads, so who knows.
We are in agreement that Facebook's current state of advertising is terrible. They, however, made $4B last year, and will likely make more this fiscal year.
The only thing we're arguing over is that I believe there is this vague "untapped potential" and you don't believe it exists. Maybe they'll figure out a more engaging advertising mechanism than their current ad platform. Maybe they'll use Google Ads instead of their own ad platform. Maybe they'll buy Netflix and they'll have their own tv channels with traditional tv ads. Maybe companies will be able to pay to get their particular event promoted on people's newsfeeds, in more indirect methods, such as if the new Avengers movie just came out, they could spend money and then Facebook would consolidate and highlight every time your friend went to see Avengers and posted it on their status.
There are a lot of "maybes" paths that lead to much higher revenues and higher rates of user monetization. This is why people are willing to pay 25x revenues, and a $100B market cap at IPO for Facebook. The entire premise of their market cap is based on their ability to increase their user monetization. If they can't, then I agree, they will certainly fail as a stock.
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#249Earlier quoted context omitted.
If they can actually increase the quality of their user monetization, then they certainly could bring in a lot of revenues. Ok, but that's like saying if they can make more money per user they'll make more money. It feels like that's just restating the problem. So what things would happen for them to "increase the quality of their user monetization"? I'm looking for a lever they could pull or push to get more cash ou…
Watching football is a very unmotivated state of mind for the viewer to be in, but companies still spent over $200M in 2012 to advertise for the Super Bowl. The only commercial any of my friends remember is the one with the hot chick for the car company that I can't remember. Companies still spend billions upon billions of dollars per year on advertising not based on search, and simply based on number of eyeballs and…
There are two things that separates TV adds during the Super Bowl vs. banner adds on Facebook first there is no competition for a users attention. If Facebook could set things up so every 30 clicks a user was forced to watch a 30 second clip then they could make a lot of money until they lost all their users. Second, people talk about the good ones, people basically don't talk about banner advertising at all. Part of that is the poor ad copy, but mostly it's because people are only barely aware they exist in the first place.
Re: GM Says Facebook Ads Don't Work, Pulls $10 Million Account
#250Earlier quoted context omitted.
It takes time to actually build a search engine - you just can't get up and say you're gonna build one. Even if you somehow bring in a partner like Bing. Google has been fighting spammers, scrapers, black-hatters, and thinking about all kinds of search problems for over a decade.
Google has been fighting spammers, scrapers, black-hatters, and thinking about all kinds of search problems for over a decade. Same could have been said of Yahoo and other search engines before Google.
yep, and they failed.