Hard to believe that Jerry Maguire was showing in theaters way back in 1996. Kind of makes you feel old, doesn’t it? But given that the film is now 16 years old, it’s not so surprising that the refrain “Show me the money” has entered our society’s every day lexicon. Who could have ever predicted that Facebook would be in the category of companies and/or people shouting out this refrain, however?
In addition to Facebook’s continuing IPO slide, Advertising Age recently reported, “To Facebook’s chagrin, time spent online doesn’t equal money.” The gist of the article is simple – in 2011 people spent 13% of their time on Facebook – that’s in comparison to 11% on Google (including YouTube) and only 7.9% for Yahoo. Given that, it would be easy to hypothesize that Facebook advertising would be the most successful. The more time people spend on a platform the more ads they are likely to see, and statistically, this would seem to indicate that more people would be likely to click on an ad and create revenue for everybody.
Oddly, however, just the opposite is happening. According to the Advertising Age article, Facebook made $3.1 billion in 2011, a paltry figure when compared to Google’s $36 billion.
So what’s going on here? According to the article, it may be misleading to try to draw a straight line between attention (or time) and advertising success. However, there may be another facet to this story. According to Ryan Holliday, who actually tried to find success using Facebook ads,
People go to Facebook to interact with their friends. It is fundamentally different from the ad platform that is Google. People go to Google to find something they need, possibly ready to buy, which a good percentage of the time can in fact be solved by someone’s ad. Facebook ads, on the other hand, annoy users. They yield no real value, and thus no profits.
Holliday goes on to suggest that unless you are selling an app, your ad program is probably not going to work.
Back to Branding
The Advertising Age article suggests that eventually, brands will start using Facebook ads for branding rather than for direct response. This is the same path that online banner ads have taken. Click rates have become negligible, and the success of the campaign is based more on faith that people seeing your brand in the right place at the right time will ultimately impact sales long term. The problem is that Facebook is not the best environment for most companies. People go to Facebook to talk with their friends. People go to publication websites or industry websites to learn about products or services relevant to their jobs. Does this mean we no longer think having a Facebook presence is a good idea? No. Our position has not changed – having a presence on Facebook, when integrated with other marketing tactics – can still be highly effective and remain two very different things.
Will Facebook ever be able to bridge this gap? Advertising Age seems confident they will. We’re not so sure. What do you think?
Image Credit: http://www.flickr.com/photos/59937401@N07/5929474535/ via Creative Commons