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Facebook's advertising challenge

Wednesday, May 16, 2012 - 02:13

May 16 - Amid the hype over Facebook's public trading debut, the social media network suffers a black eye as General Motors pulls its ads. A source tells Reuters they weren't working. Jeanne Yurman reports.

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Facebook users apparently click on about one of every 2,000 ads. That sums up Facebook's advertising problem. It's also appears to be part of the reason General Motors decided to stop paying for advertising on Facebook. Telling Reuters, its ads simply weren't having an impact with consumers. It's the biggest black mark for Facebook as it prepares to launch one of the most hyped IPOs ever. Matt Donovan, Executive Vice President of McCann New York, says big companies are still grappling with how to get the most from social media. MATT DONOVAN, VICE PRESIDENT, MCCANN NEW YORK SAYING (ENGLISH): "It's still a very effective but very early medium. Social is only four to five to six years old depending on what you use as your birthdate and big companies are still trying to understand how do we connect into a community of people and build engagement with that group of people and at the same time achieve our advertising aims." General Motors spent about $10 million in paid advertising on Facebook according to the Wall Street Journal - a fraction of the social media site's $3.7 billion in annual revenues. Also notable is that GM is still plans to maintain a presence on Facebook with unpaid marketing efforts. And some media analysts say Facebook is only just beginning to tap its advertising potential. MATT DONOVAN, VICE PRESIDENT, MCCANN NEW YORK SAYING (ENGLISH): "I think about the evolving social television experience, where Facebook could play such a huge role in connecting your three different screens. You could have your mobile, your tablet and television on at the same time and Facebook is actively involved in all three of those experiences. So the ability to use the data they collect on those type of experiences for advertisers and for the betterment of consumers is immense and it's untapped." That seems to be the reason most major advertisers have stuck with Facebook. Jeanne Yurman, Reuters

Facebook's advertising challenge

Wednesday, May 16, 2012 - 02:13

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