Reinforcing the statement that “social networks are meant to be social,” a recent Reuters/Ipsos online poll found that four out of five Facebook users have never bought a product or service as a result of advertising or comments on the site.
The survey of 1,032 Americans was conducted May 31 through June 4. Despite the network boasting 900 million users, Reuters said, 21 percent of those surveyed said that they did not have a Facebook account.
Reading this didn’t surprise me; I can’t remember clicking on a Facebook ad for any reason except by accident, but the study also found that 34 percent of Facebook users who were surveyed were spending less time on the social network than they were six months ago, compared to only 20 percent who were spending more.
According to reports from comScore for the top 50 Web properties, Facebook had 158,693,000 unique visits in April, down 5 million unique visitors since January. While it still holds on to the No. 4 Web property spot, 48 million unique visitors a month ahead of No. 5 AOL, Facebook has been slipping month after month in Web share.
Big guns backing away
Would you advertise on television if you knew only one out of five people who had ever watched TV would respond to an advertisement? Especially if it was drawing fewer viewers each month?
A 20-percent chance wasn’t enough for auto manufacturer General Motors, which announced just prior to the Facebook IPO that it would be pulling $10 million dollars it had allocated toward Facebook advertising.
In mid-May, the Wall Street Journal reported that GM was dropping its advertising on Facebook after deciding that paid ads on the site have little impact on consumers’ car purchases.
However, despite pulling $10 million in paid ads, GM Marketing Chief Joel Ewanick said he still believes the content produced on the auto-maker’s Facebook Pages is effective and important, the Wall Street Journal reported.
Ewanick and GM are not alone in the auto-industry in their criticism of Facebook ads, and GM’s skepticism mirrored similar concerns by a top marketing executive from Kia Motors Corp., which were reported by the Wall Street Journal earlier in May. Kia questioned the value of the ads, saying it was unclear how paid ads help sell cars. Despite the comment, however, Kia said it still planned to increase spending on Facebook ads this year.
Bang for the buck
As a point, none of these players are calling Facebook ineffective, but instead are questioning the website’s weak paid-ad offerings. Instead of paying out money on ads, more business are turning toward great content as the way to gain brand awareness.
Content marketing, creating and sharing content in order to engage current and potential customers, isn’t a new concept. It’s older than Facebook. But the explosion of Internet sharing and Facebook has led some big ad spenders, like the auto industry, to take a second look at whether they can get a better bang for their buck by producing things consumers want to see instead of filling Facebook with more buttons and sponsored posts.
If it proves effective, it could be a good sign for the powersports industry as well. Buying a car isn’t the same thing as buying a motorcycle, scooter, ATV, side-by-side, PWC or snowmobile, but if the auto industry can show that it is possible to generate increased sales for the brand and save ad dollars in the process, there is something that everyone can learn from that.
I’ll have my eye on GM for the next year; anxious to see if the bold bet by the third largest advertiser in the country pays off or if the auto-maker will have to eat its words.
Editor’s note: A few days after writing this post, Facebook and business analytics company comScore released research touting the success of two major brands through advertising campaigns on Facebook. In an article on Ad Age, the VP of Marketing for comScore dismisses the above survey, noting that consumers aren’t always aware they are being influenced by advertising and brand influence can play an impact on purchasing decisions beyond ad click-throughs. If you want to read more, the full article can be found here).
Chris Gerber is the associate digital editor of Powersports Business and its sister publication Boating Industry, trade magazines for the powersports and boating industries. He manages the Powersports Business website and compiles and contributes to PSB’s twice weekly e-newsletter. Powersports Business is known for its exclusive national dealer surveys and in-depth industry analysis.