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from the urls-we-dig-up dept

Thu, May 17th 2012 5:00pm — Michael Ho

There's a big IPO coming up that should create a few more Silicon Valley billionaires. Back when Google went public, there were lots of folks joking about how business models were all going to be based on advertising. Just add ads, and your last step would most definitely be "profit." That joke got old, but it doesn't look like business models based on ads have. (At least, not for Facebook.. or Twitter.. or Foursquare...)

GM hasn't been impressed by the performance of its Facebook ad campaigns. Is it always the poor musician who blames his instrument? [url]
A bunch of Facebook advertisers say that it can be difficult to pinpoint all the benefits of social networking ads, but getting more "likes" seems to quantify improving brand awareness in an easily-understood way. This is why there will never be a "dislike" button, though. [url]
Small businesses are still trying to figure out whether or not Facebook ads are worthwhile. Either way, there appears to be more publicity in having a nice story about how Facebook ads don't really have a great return on investment... [url]
To discover more interesting advertising-related content, check out what's floating around on StumbleUpon. [url]

By the way, StumbleUpon can recommend some good Techdirt articles, too.

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Filed Under: ads, advertising, branding, ipo, roi, social network
Companies: facebook, gm

6 Comments

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Watchit (profile), 17 May 2012 @ 5:17pm

Well, an ad, is an ad, is an ad. And everyone knows it's always about location, location, location. If a facebook ad doesn't work for a company, then either they're doing something wrong or facebook ads are just not for them. Personally I ignore Facebook ads out of hand, because they annoy me most the time.
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ken (profile), 17 May 2012 @ 5:53pm

Problem is the metric used to measure ads effectiveness
The problem with Internet ads is not the ads but the metric advertisers use to determine the success of an ad. Most ads track the number of people that click on their ads however this is not the way ads are effective. No other ad format is the viewer expected to make some overt act by clicking on an ad. Do TV or newspapers or magazines expect their potential customer to do some overt act like clicking on a link? No, the same goes for Internet advertising. The power of an ad is the exposure to the name of the company in the ad. Most people buy from brands they are familiar with and ads are what provide this familiarity. Judging an ads effectiveness by counting clicks is counter productive because few people do it and even fewer people who do it actually end up buying.
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Michael Ho (profile), 17 May 2012 @ 6:01pm

Re: Problem is the metric used to measure ads effectiveness
This old quote from John Wanamaker seems to still be true:
http://en.wikipedia.org/wiki/John_Wanamaker

"Half the money I spend on advertising is wasted; the trouble is I don't know which half."
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ken (profile), 17 May 2012 @ 7:27pm

Re: Re: Problem is the metric used to measure ads effectiveness
They way advertisers determine the effectiveness of ads is like determining your readership by the number of comments.
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ken (profile), 17 May 2012 @ 7:29pm

Re: Re: Re: Problem is the metric used to measure ads effectiveness
Micheal Ho

So far I am the only person who has read this post. :-)
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Mike Masnick (profile), 18 May 2012 @ 12:40am

Re: Re: Problem is the metric used to measure ads effectiveness
"Half the money I spend on advertising is wasted; the trouble is I don't know which half."

The half spent on Facebook, obviously. Duh. ;)
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