Facebook's Advertising Woes Reminiscent Of MySpace

from the cheapo-clearance dept

Thu, Jul 12th 2007 1:33pm — Joseph Weisenthal

Back when MySpace was all the rage, there was a lot of talk about the seemingly wide disparity between its traffic and its profitability. As it turned out, the company really couldn't figure out a good way to monetize its traffic, as its advertising rates were pitifully low. Eventually, the company signed a deal with Google, ensuring that News Corp. would comfortably recoup its purchase price and then some. Now that Facebook has assumed the mantle of social networking site du jour, all of the same questions are again being raised. One advertiser notes that the click-through rates on Facebook ads are terrible, which in turn forces it to sell advertising at cut-rate prices. As Valleywag notes, the cheap ad prices bring in some unsavory advertisers who put pop-ups on your computer along with false warnings that you've been infected by a virus. Of course, this only makes users less inclined to click on ads in the future, exacerbating the cycle. None of this is to denigrate what Facebook has accomplished so far, which is obviously quite impressive. But at the end of the day, the company will have to find a better way to profit, especially if it wants to go public.

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7 Comments

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Joel Coehoorn, 12 Jul 2007 @ 2:46pm

Like I've said before- don't put up ads on the next expecting 'click through'. They just interrupt the flow of the what the user is doing, unless your ad complements what the user is doing (like keyword ads on Google). Think of it more like a TV ad, where the sale won't happen until much later.
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Robert Einspruch, 12 Jul 2007 @ 3:08pm

click through
Facebook doesn't even release click-through stats, so as an advertiser I have next to way to measure. It really is like general brand advertising, as the person above commented. But they need to improve their targeting - I am married (and my status on Facebook is set to "married") yet I keep getting served ads for singles and dating.
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Carbinefreak, 12 Jul 2007 @ 6:05pm

Adblock + firefox
Why dont people use Firefox with the Adblock plugin? it works great and there another plugin that updates adblock automatically every startup of firefox. i haven't seen a ad in a couple months since i installed it
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Prophet, 12 Jul 2007 @ 7:09pm

Cabinfreak ^^^^^^^^^^^
I agree with the above post, i use FFand havent had an issue for, well since i starte using FF and assorted plugins, Now if only my Job would implement the same things and i could not see them at all.
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Anonymous Coward, 13 Jul 2007 @ 9:33am

Yeah, that sounds like a $8 billion company to me...
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Nick, 13 Jul 2007 @ 1:19pm

Is that interview satire? In any case I am surprised that no one has brought up the "immorality" of AdBlock-like software. "Content providers can bring you all of their incredibly useful information free of charge only because they make revenue off of advertisers think of their kids!..." I am glad no one has said that. The internet is actually quite simple, so is life for that matter. If people can do it they will. If people can download every album faster than they can go to the store and buy it, they will. Can you really blame people for blocking ads? It's gotten out of hand, they track you, and blind you. Half the time I can honestly not even see the article I am reading without getting a headache. It's my pipe to the internet and I don't pay to see ads, same with cable which is why I don't have that at all.
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EJ Passeos, 15 Jul 2007 @ 12:12pm

Facebook's ads.
I love Facebook's layout, especially compared to the hideous Myspace. I don't understand why the site's can't find "normal" ads, like for cars, movies, etc. On Myspace, it is all trash, pop-ups, trackers. Facebook's ads seem very weak, and not relevant.
Too bad. I guess no company has found a good model, other than selling out to high bidders.
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