Add eMarketer to the growing list of companies that don’t believe Facebook advertising was doomed when General Motors pulled its $10 million account off the social network, as the researcher released a report Tuesday touting the benefits of Marketplace ads.
After General Motors pulled its Facebook advertising, other car makers have said they recognize the value of social marketing. The latest? Nissan, which Advertising Age reports is heavily including Facebook in its marketing plans for the upcoming year.
While some question the effectiveness of advertising through Facebook, two major American companies say it works. Coca-Cola and Ford recently told The Wall Street Journal that they’ve had success on the social network.
Facebook’s initial public offering is a milestone in the evolution of not only social media, but media itself. Fairly or unfairly, Facebook is the lightning rod, the proxy, for the broader discussion about how fast consumer behavior is changing through our increasingly frictionless ability to share and socialize.
A new poll shed more doubt on the value of Facebook’s 900 million-plus users to advertisers and marketers, uncovering negative results in terms of advertising and time spent on the site.
Morgan Stanley Chairman and Chief Executive Officer James Gorman appeared on CNBC’s “Closing Bell with Maria Bartiromo” Thursday afternoon, reiterating that his company did nothing improper in the run-up to Facebook’s initial public offering and urging patience with the social network’s slumping stock, saying, “The story isn’t over. Again, we are at day eight here. Give this a little bit of time.”
Why did General Motors pull $10 million of advertising off Facebook? According to reports, it came down to an issue of page control, meaning, GM wanted to take over an entire page with its branding, and Facebook declined.
To the executive class, Facebook looks an awful lot like an old-school media company. That’s because its business model is built on earning revenue through, you guessed it, selling ads. In order for people to buy the ads, they have to prove effective and get people to buy things. But this return on investment has historically been difficult, no matter the medium.
A recent study for The Hollywood Reporter found that 88 percent of people consider Facebook to be entertainment, and a CNBC/Associated Press survey released just today confirmed this, finding that only 12 percent of users would feel confident making purchases through the site, so no one should be shocked that General Motors announced that it is yanking its advertising dollars ($10 million worth) from the social network’s platform.