The hot news this week is that Facebook is going to rake in an umptybillion dollars when they go public on Friday. However, all that crazy cash is based on the assumption that Facebook will be able to deliver on its promise of super-duper ultra targeted advertising which will drive us all to purchase new Roombas for our kittens to ride upon. General Motors is having none of that and publicly announced that they’re stopping all paid advertising on Facebook because they’re not selling any cars that way. So what’s the deal? Is Facebook a marketer’s weapon of mass consumption or simply a way to irritate all your friends by notifying them when you’re having a cup of tea?
The ugly truth about advertising
NPR ran a story a few days ago exploring just how effective advertising on Facebook really is. NPR found a couple of guys with a little pizza joint in New Orleans who are on Facebook and hooked them up with a social media marketer (the article refers to him as a “guru” but we hate that term when it’s applied to professionals). Long story short: After an initial flop, the pizza guys and the marketer finally targeted their ad in a way that wound up getting 700,000 impressions. Time to buy a second oven, maybe hire a few extra people, right? Nope. Their ad “campaign,” which cost about $240, netted them about the same number of additional “Likes.” Asking customers that came in for a pizza where they had found out about the restaurant, not a one said “Facebook, of course!”
Of course it’s silly to expect a single ad (even one seen 700,000 times) to trigger an avalanche of cash, but that little test (and GM’s decision to stop paid advertising) proves a point that we’ve been making about doing business on Facebook: You can’t be there to simply plug your wares. Facebook is all about making friends first. Then business, maybe. Facebook is a place (and only one of several) for your customers to get to know your company. GM seems to have figured that out: they’re stopping paid advertising but will continue to maintain a presence and engage with their fans (customers and potential customers).
A big part of the fuss over Facebook’s projected valuation after the IPO is the notion that, with their massive stores of personal information on millions and millions of users, Facebook will enable marketers to sell anything and everything to everybody.
C’mon guys, seriously? You simply cannot make someone buy something. It’s not mind-control. Sorry. The right ad at the right time in the right place when the prospective buyer is in the mood to buy? Then yay! Cha-ching!
So what’s the secret?
The pizza guys learned it for $240 and GM learned it for about $10 million: Facebook is for making friends; for engaging with others and telling your story. It’s not some crazy system of driving consumerism like the billboards in “They Live.”








