facebook advertising a waste of money ?

“If you run a business, and you are looking to make money through driving people from Facebook to your products or services, Facebook is very likely not in any way worth the amount of time or expense required.” Wow. That’s quite a statement from an article called “Facebook: Waste of Time for Most Advertisers”.  Here is a summary of the authors key points and I could not agree more.

According to two IBM reports:  On this recent 2012 Black Friday, Online Sales grew 20.7% from last year.  Online Sales on Cyber Monday grew by 30.3%.  Those numbers represents HUGE growth in the Online space.  Within those numbers however, Social Media overall was responsible for 0.34% of Online sales on Black Friday.    For Black Friday, they represent a more than 35% DECREASE from last year. For Cyber Monday, the news is not as bad, but those numbers represent a more than 26% DECREASE from last year as well.  

When people are shopping, they have what is called Commercial Intent, which means they are looking for something they want to  purchase. It is no different from back in the days of searching through the Yellow Pages for a business that is selling what you are interested in buying. Your Commercial Intent is to find those who provide what you are looking for.  


Commercial Intent does not exist on Social Media, because the overwhelming percentage of its users is not there for shopping. They are there for the purpose of conversation and interaction with others.  Bradley Horowitz, the Google VP in charge of Google+ recently likened an advertisement on Facebook to a man wearing a Sandwich sign walking up to a couple of people having a conversation on a sidewalk.  The advertisement is an unwelcome interruption.

 Facebook is now charging (some say penalizing) businesses to communicate with the very audiences they worked hard to build. Unless a business is willing to pay a fee based upon the number of followers, it is limited to communicating with between only 5 to 15% of their curated audience. Not only that, the members of that limited group are selected not by the business, but by Facebook. The algorithm for this determination is called “Edge Rank”.   That’s right, businesses cannot relay customized messages to targeted segments they define themselves.

What the IBM report suggests, is what many of the so-called Social Media Experts claim (as opposed to actual Sales and Marketing professionals) about the efficacy for driving sales via Social Media is at best a misnomer, and at worst an excursion through a field of Bovine Excrement. 

The true value of Social Media is in that it provides a very effective forum for both Corporate (business) and Personal Branding.  Through a presence on forums like Facebook, Google+, Twitter and others, the opportunity exists to build trust, subject authority and a reputation for problem solving. This trusted reputation is the essence of a Brand.  A positive review of a business posted on Social Media is more valuable than 100 advertisements.  A posted endorsement from other trusted authorities is near priceless, for it cannot be purchased, but only earned.

Think of it this way; if you’re looking to buy something (think like a consumer now) you probably start with search and therefore ad words may provide a lot better ROI than ads on facebook.  Only 23% of the consumers in a study said they have a relationship with a brand. In the typical consumer’s view of the world, relationships are reserved for friends, family and colleagues. That’s why, when you ask the 77% of consumers who don’t have relationships with brands to explain why, you get comments like “It’s just a brand, not a member of my family.” (What consumers really want when they interact with brands online is to get discounts).

Too many marketers have been duped into believing that facebook ads are a good investment.  That simply isn’t true compared to other tactics such as Google Ad Words.  The social media experts are making a lot of money keeping the hype machine going but marketers and brands would be well advised to let the data lead them to their conclusions instead of letting social media marketing experts take them by the hand to get more money.

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