News Column

Value of Facebook Advertising Questioned in New Report

July 16, 2012

Frank Witsil

Facebook Advertising

Are companies wasting money on advertisements to gain likes on Facebook from peopel who have no real interest in their products?

A recent BBC report suggests they are.

Facebook account holders lie about their personal information and some profiles are fakes, according to the report. While the engagement is valued by companies, the report says, one marketing consultant warned clients to be wary.

Controversy about Facebook advertising has swirled even before the company became public.

In May, just before the social network's public offering, the Free Press reported that General Motors would halt its paid Facebook ads. At the time, the automaker maintained its free brand pages on the site but said its $10-million Facebook ad budget wasn't delivering an adequate financial return.

A Chevrolet executive told the Free Press that GM had asked Facebook for creative flexibility on the social network's advertising platform. Other automakers, such as Ford, have touted their faith in Facebook.

Earlier this month, GM has said it is discussing a return to buying advertising on Facebook.

And some columnists, such as Free Press Brian Dickerson, have noted that while the future and value of social network advertising is difficult to predict, Facebook is bringing people together.

Still, the Free Press also has reported that industry experts say Facebook needs to improve the effectiveness of its advertising.

About 16.6% of the site's users have either clicked on a Facebook ad or showed an interest in purchasing a product, according to research firm Kantar Media Compete. That was less than the percentage for search engines like Google and Yahoo, the Free Press reported.

The recent BBC report also warns that spammers and malware authors may be using fake accounts to spread dangerous links and spam, and a deeper analysis of the engagement with Facebook users showed they might not have been real.

Facebook responded to this in the BBC report by downplaying fake profiles and saying that the company has not seen "evidence of a significant problem."

Source: (c)2012 the Detroit Free Press. Distributed by MCT Information Services

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