Facebook ads don't sway users - poll

2012-06-05 10:39
Facebook users are swayed by adverts, a survey has found. (Joerg Koch, AP)

Facebook users are swayed by adverts, a survey has found. (Joerg Koch, AP)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

San Francisco - Four out of five Facebook users have never bought a product or service as a result of advertising or comments on the social network site, a Reuters/Ipsos poll shows, the latest sign that much more needs to be done to turn its 900 million customer base into advertising dollars.

The online poll also found that 34% of Facebook users surveyed were spending less time on the website than six months ago, whereas only 20% were spending more.

The findings underscore investors' worries about Facebook's money-making abilities that have pushed the stock down 29% since its initial public offering in May, reducing its market value by $30bn to roughly $74bn.

About 44% of respondents said the market debut, seen by investors as troubled, has made them less favourable toward Facebook, according to the survey. In the 31 May - 4 June poll of 1 032 Americans, 21% said they had no Facebook account.

Facebook's 900 million users make it among the most popular online destinations, challenging entrenched internet players such as Google and Yahoo. Not everyone is convinced the company has figured out how to translate that popularity into a business that can justify its lofty valuation.

Case studies

While the survey did not ask how other forms of advertising affected purchasing behaviour, a February study by research firm eMarketer suggested Facebook fared worse than e-mail or direct-mail marketing in terms of influencing consumers' decisions.

"It shows that Facebook has work to do in terms of making its advertising more effective and more relevant to people," eMarketer analyst Debra Williamson said.

Those concerns were exacerbated last month when General Motors Co, the third largest advertiser in the US, said it would stop paid advertising on Facebook.

Facebook declined to comment in detail on the survey, but referred to case studies of companies such as Nutella, which found that a 15% increase in sales was attributable to Facebook, and restaurant chain Applebee's, whose Facebook ads delivered a threefold return on investment.

Measuring the effectiveness of advertising can be tricky, particularly for brand marketing in which the goal is to influence future purchases rather than generate immediate sales.

The success of an ad campaign must be considered in relation to the product, said Steve Hasker, president of Global Media Products and Advertiser Solutions at Nielsen.

"If you are advertising Porsche motor cars and you can get 20% of people to make a purchase that's an astonishingly high conversion rate," said Hasker.

"If you are selling instant noodles, maybe it's not," he said.

Smartphones

About two out of five people polled by Reuters and Ipsos Public Affairs said they used Facebook every day. Nearly half of the Facebook users polled spent about the same amount of time on the social network as six months ago.

Keeping users coming back is crucial for all social media services, said Gartner analyst Ray Valdes.

"Facebook continuously has the challenge of Facebook fatigue, of the novelty factor wearing off, and therefore they have to introduce new kinds of interaction," said Valdes, citing new features such as the "Timeline" interface and the planned $1bn acquisition of mobile photo-sharing app Instagram.

Consumers' increasing use of smartphones to access Facebook has been a drag on the company's revenue. It offers only limited advertising on the mobile version of its site and analysts say the company has yet to figure out the ideal way to make money from mobile users.

Facebook competes for online ads with Google, the world's No 1 web search engine, which generated roughly $38bn in revenue last year. Google's search ads, which appear alongside the company's search results, are considered among the most effective means of marketing.

Facebook is still perfecting the effectiveness of its ads, said Gartner's Valdes. But he said he was surprised that the comments posted on the website from Facebook users' friends were also only responsible for 20% of users making a purchase.

"Comments and recommendations from friends on Facebook do carry a lot of weight, so I'm surprised by the number," he said.

The most frequent Facebook users are aged 18 to 34, according to the survey, with 60% of that group being daily users. Among people aged 55 years and above, 29% said they were daily users.

Of the 34% spending less time on the social network, their chief reason was that the site was "boring", "not relevant" or "not useful". Privacy concerns ranked third.

Read more on:    google  |  facebook  |  social networks
NEXT ON NEWS24X

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
5 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
 

Zuma: Pray for peaceful polls

President Jacob Zuma has asked members of the Universal Church of the Kingdom of God to pray for peaceful elections on 7 May.

 
 

Latest elections multimedia

Why Jack Parow wants you to vote on 7 May
The ad the SABC doesn't want to air
Elections 2014 in one cartoon
This year's election posters
 
Traffic
Lottery
 
  • Friday Grabouw - 11:32 AM
    Road name: N2 Eastbound
    DELAYS between Sir Lowrys Pass and Grabouw
  • Friday Cape Town - 10:14 AM
    Road name: M3 Inbound
    EVENT - left lane closed between Rhodes Avenue and UCT
 
More traffic reports...
 

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Escape winter, head to Mauritius

Escape winter by spending 7 nights in Mauritius' tropical bliss from R13 215 per person sharing. Includes return flights, airport transfers and accommodation. Book now!

Kalahari.com - shop online today

Get many eggs in one basket!

Gaming bundles: 2 Super Hits games for R99, 3 Disney games for R99 and more + exclusive accessory bundles only available on kalahari.com. While stocks last. Shop now!

25% off bestselling books!

The Real Meal Revolution by Tim Noakes, Jeffrey Archer’s Be Careful What You Wish for, Man’s Search for Meaning by Victor E. Frank and many more titles. Shop now!

Up to 25% off electronics

Buy top electronics and save up to 25%. Such as kalahari.com’s 1# selling product the gobii eReader, Patriot X Porter flash drive, Asus Nexus 7” 3G tablet, Samsung Galaxy SIII, Lenovo G580 Notebook and many more. Shop now!

DStv HD PVR Decoder now R949

The DStv HD PVR Decoder has further revolutionised the television experience with lifelike viewing, sharper images, more vibrant colours and precision picture quality. Now R949, save R550. Offer valid while stocks last. Shop now!

Up to 30% off appliances & homeware

Save up to 30% on appliances and homeware this Easter! Offer valid while stocks last. Shop now.

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Canon EOS 600D

The Canon EOS 600D Digital Camera puts the widely respected...

From R5389.95

I'm shopping for:

Horoscopes
Aquarius
Aquarius

Self-indulgence may be strong today. You may want to enjoy yourself to the fullest and share it with those that make you feel...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.