Why Facebook Is Not A Viable Marketing Platform

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Last week when I wrote about Facebook flyers and how the social network was going to rely on those to make money from Facebook Marketplace, Nate mentioned that Facebook marketing was useless because there was little to no conversion. Here we take a deeper look at Facebook as a marketing platform.
Lack of Focus
While I was researching what people were saying about marketing on Facebook, I came across a lot of negativity and a lot of people saying that it simply wasn’t worth it. As Nate mentioned, it is probably better to find a more focused niche that is more applicable to your content or services and try marketing there first. Not only will you face less competition but simply by virtue of it being a more focused niche, whatever conversion you do get will be much better. While Facebook started as a social network focused on college students, since then it has opened up to everyone and diluted the focus of the site.
Lack of Visibility
Furthermore, while some users praise Facebook flyers because they blend in with the rest of the Facebook interface and are not intrusive, others argue that this is precisely the reason why the click-through rates are so low. At the same time, these people welcome using pay-per-click marketing because that way, you only pay when someone notices and clicks on your advertisement (and not by impression, which is what Facebook does).
Not Compelling Enough
What really puts this into context is comparing what the users of the social network are there to do, and how compelling you can make your advertisement to them. For example, when the average Facebook user signs into the network, he wants to check out what his friends are up to, look at some pictures, maybe edit his own profile a little bit and so on, and in the midst of all this, the Facebook flyers are not customizable enough and as a result just don’t look compelling and don’t stand out enough to attract the attention of this user to really be useful.
What’s in the CPM?
When Facebook flyers first launched, they offered 10,000 impressions for $5, making the CPM $0.50 which was pretty much unheard of. Since then, they have changed the rates to offer 5,000 impressions for $10, making the CPM $2.00, increasing prices by 400%. And while the first CPM is incredible, and the second one isn’t too bad either, with the conversion rate hovering around nil, what’s in the CPM?
One thing to keep in mind is that much of what is discussed here is more relevant to people on a budget. Facebook doesn’t just rely on flyers for revenue and has other banner advertisements too (which cost much more). Flyers are for advertisers on a very small budget. Which is partly why though they continue to be ineffective people keep using them because what’s $5 to a bar in downtown Chicago that wants to advertise to students from surrounding colleges?
The Academic Approach
What I learned by researching what other people were saying, i.e. how ineffective marketing on Facebook is, was quite surprising for me. You might remember Fox Interactive’s study on social network’s and marketing which we covered some time ago which found the exact opposite results.
What it ultimately comes down to is the following things you should consider before you make the jump. Make sure you understand your own audience and compare it with the audience of a particular marketing platform (in our example, Facebook). And don’t be restricted by your budget and simply choose the cheapest option. Do some more research, look for highest conversion rates for the price and don’t discount pay-per-click and other similar models. Try a mix of different methods before you use one exclusively.

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  • bronz

    1) you’re talking about PPC and CPM ads – advertising on facebook is not restricted to those two formats which, of course, rely solely on targeted traffic to generate sales for the advertiser. Facebook has, however, another key BRANDING tool that is perfect for web-based companies to advertise with.
    2) No focus? No niche? Yeah that’s what happens when you have a user base of 20+ million people.
    Forget classic advertising models. Forget PPC and CPM ads. Any web-based company that wants to advertise on Facebook needs to think beyond simple gimmicky text descriptions and CPC budgets and focus on BRANDING. How? With Widgets! Imagine exposing some of your site’s functionality to a user base of 20+ million. If you really took the time to evaluate Facebook’s marketing potential, you’d see that it is unlimited.
    Btw what you’re describing is not a poor marketing platform but a poor ADVERTISING platform. Sure, conversions MIGHT be trickier on Facebook vs other traditional advertising platforms or niche social networks, but Facebook isn’t stupid and neither are their advertisers. If the conversions weren’t there, Facebook wouldn’t be making hundreds of millions of dollars in ad revenue a month.

  • Muhammad Saleem

    1. Advertising on Facebook is not restricted to those two models, its restricted to only CPM ads unless you have bags and bags of money.
    2. If no one is looking and/or clicking on the ads, you’re branding just about as much as throwing a bunch of flyers in a trash can.
    Again, with the rest of what you have written, because it is not well targeted and because no one is ‘looking’ or ‘clicking’ there is no useful ‘advertising’, ‘marketing’, or ‘branding’ going on.

  • David Henderson

    I think you are missing the shift here. FB may be the first 2.0 Marketing platform.
    1.0 was about sponsored broadcast content. How dead is this model? Just ask any TV, Radio, Magazine, or Newspaper executive.
    2.0 is about people, apps and social interactions. How is that not a much better model?
    We just haven’t invented it all yet. Stay tuned! 😉

  • Rk

    Note to Bronz: Sorry because it sounds like you’ll be out of a job, because within a few years BRAND MARKETERS (AND “BRANDING”) is going to be gone. “Branding” is for lazy prima donnas that are terrified by the day that their work will actually be measured more explicitly than the “hit them on the head 7 times rule”. Good luck.

  • Paul

    To RK, branding isn’t dead. It is very important. Direct marketing is great for direct sales. Brand marketing is great for, well, improving your brand! It is not always about the sale. Brands get to leach off facebooks coolness. They are both good when solving a certain problem and trust me, brand marketing will never die. As for Facebook, now they have opened up, limiting yourself to banner ads is lame. Have some imagination.

  • Cary Quatro

    Also keep in mind the demographics of the 20+ Million users of Facebook. They are targeting the age groups of 12-27 for most of their audience. This is not a group that has a lot of disposable income, and thus is not a viable market strategy to make spending worthwhile. Hence the small cost of their ad models on Facebook.
    My company does marketing too, but more focused and realistic in attracting target consumers. Facebooks come and go, and thus will never be reliable, such is the fad site complex of the internet. Easy come, easy go…

  • ralf

    FACEBOOK HAS NO FUTURE!–facebook has lousy human relations. it treats people like shit. some of us have been unceremoniously removed from facebook–our crime? trying to network. i thought that more networks means more ads revenues. i can’t wait for a alternative to facebook. at least they could warn people b4 shutting them, now i have lost contact with 730 people. RELY ON FCEBOOK AT YOUR OWN PERIL. THEY ARE ARROGANT. AND ARROGANCE AT THIS DAY AND AGE LEADS TO ECONOMIC COLLAPSE. I GIVE FACEBOOK 3YRS MAX. I WILL NEVER USE THEM AGAIN, NEVER!

  • Forgaria

    Interesting perspective.
    I’ll say Facebook worth the try. Be creative with what the platform has to offer. No need to invest a lot in FB to test and measure its (non ?)effectiveness.
    But I definitively agree with the fact FB is not a platform to advertise on but to do some branding.