Advertisers are Still Fans of Facebook

Posted: May 21, 2012

With the announcement that General Motors will discontinue advertising on Facebook, and saying that FB did not deliver results for them, many folks wondered what the fate of advertising on FB would be. It seems that there are still some big players who will continue to use the social media site as part of their advertising plan.

Players in metro Detroit's advertising industry remain mostly bullish on Facebook Inc.'s usefulness as a paid marketing tool despite news last week that one of the biggest advertisers around has lost faith in the social media giant's utility as a sales platform.

There's been criticism for some time that Facebook has been unable to parlay its gigantic global user base -- more than 900 million people log on at least once a month and more and 526 million at least once a day -- into a blockbuster for marketers.

Last week, General Motors Co. confirmed its plans to end its marketing spend on the site by midyear, an estimated $10 million decision.

Facebook, the Menlo Park, Calif.-based social media behemoth, typically is used by companies and their ad agencies to gain "likes" for products and services -- with the goal of assembling users with an affinity for a brand into one place where the company can engage them with answers to questions or offers.

Those brand pages often are bolstered by paid advertising on the site, which generated $3.2 billion of Facebook's $3.7 billion in 2011 revenue.

For some advertisers, there's been quantifiable payoff.

Ann Arbor-based pizza giant Domino's Inc. now has 30 percent of its total sales coming from digital sources and used Facebook in December for a one-day promotion in 20 countries that set a record week of online U.S. sales, said Dennis Maloney, the company's vice president of multimedia marketing.

"It was a phenomenal promotion for us," he said, but declined to reveal the actual number of pizzas sold. It used paid advertising on the site as part of the e-commerce blitz, which attracted more than 542,000 participants.

Facebook, which went public on the Nasdaq on Friday, may not be the ideal platform to directly sell major products such as automobiles, but can work well for less-expensive items, some say. The length of the product-buying cycle is an important element.

Read the complete article Advertisers are Still Fans of Facebook.