Now that Facebook shares are up, next is to bring in some revenue for the investors. Although Facebook shares are not doing so well since IPO, there is still opportunity to push the price back if Facebook successfully brings in money. Unfortunately things are not going to be easy for Facebook after GM stops advertising on Facebook by saying that Facebook ads are not helping much on sales. According to the blog post title “Facebook’s Advertising Problem” from Information Week, there are several other problems ahead which Facebook needs to deal with in order to bring in revenue.
As I mentioned in my previous blog post “The Reason Why Facebook Ads is not working for GM”, Facebook is not design to help users search for products and services. Facebook is an online social network which enables users to connect and hang out with friends and families. Facebook just does not have the characteristic which advertisement can blend in and bring benefits to users. It’s kind of like a salesman going door to door promoting sales. As for the case with Facebook, although users’ interest and hobby are known, it is still not sure if users are comfortable to have advertisement around, even if the ads are similar categories of their hobby or interest. This is the reason why some users choose to install ad blocking software. It’s like placing a notice at the front door saying “No salesperson or promoter allow”
The biggest asset Facebook has is the huge number of users. In order to survive, Facebook has to find a way to generate income by connecting Facebook users with products and services. The advertising method has to be redesign so that it will not push users away but instead helping users to fulfill their needs. The answer lies within users’ daily activity. Facebook just have to monitor closely and discover it. Businesses and sales are driven by population. People are starting to use Facebook as a tool for business and sale. Facebook just have to study these activities and design a systematic service to make business and sale easier. I suppose this is one of the clues for Facebook to come out with a unique advertising method which works well for social networking site. Although Facebook is focusing on mobile advertising, Facebook still needs to break free from old fashion online advertising method in order to be success.
P/S: I just wonder how GM justified Facebook ads are not working for them. Unless automobiles can be purchase online or getting discounts online using emails or click to call, I don’t see how GM can keep track of the number sales due to Facebook ads.