Where to put your marketing dollars can sometimes be a challenge for small business owners. Social media continues to be a channel many decision makers question if the expense in time and money will generate a profitable return.
Facebook’s contentious IPO raised serious debate among analysts over the true value of the social media website to the advertisers that make up its main source of revenue. The argument revolves around data suggesting that the percent of targeted customers to click an ad on Facebook is even lower than the already low average for internet advertising on other websites. A recent Reuters/Ipsosstudy shows that four out of five users polled said that they had never spent money as the result of advertising on Facebook.
The low success rate of paid ads is an obstacle that Facebook’s management has yet to overcome, but don’t overlook the 150 million unique US users visiting the site at least once a month to keep in touch with friends and family. That’s almost half of America, and Facebook claims 900 million worldwide users in a world of just 7 billion people. Never in history has it been so easy to reach (and be reached by) so many people. An ad’s “lower-than average” hit-rate on Facebook could still translate to a boost in sales.
This summer Facebook began allowing advertisers to purchase ad space directly in user's news feed not just on the right hand side. These ads may prove more effective as these stories fall into the main content feed so seamlessly. For example, if someone likes your company's Facebook page, their friends may see a story about it in their news feed. By sponsoring the story, the person’s friends are more likely to see it and become interested in your products and services.
Although you may want to evaluate if spending money on Facebook advertising is right for your business, you can still create a company Facebook page which costs nothing. Encourage customers to “like” your page so that they can receive updates and special offers straight from the source. Engage these customers by posting content that they can discuss. Their interaction not only provides you with valuable customer feedback, Facebook amplifies its value by informing their friends that they like and care enough to interact with your business. When users engage with you, make sure to reply so they know you're listening.
Whether or not you decide to try paid advertising on Facebook, social media is here to stay. Facebook is currently exploring additional ways for businesses to reach customers in the future, so whether or not it remains the biggest name in social media ten years from now, expect for the future of advertising to incorporate more and more elements of social networking.
If you would like more information on our marketing services, please contact us at www.BuddinghAssociates.com.
David S. Buddingh is founder and partner in Buddingh & Associates, Inc., an award-winning strategic marketing consulting firm in Naperville, IL. Contact him at (630) 961-4504 or visit www.BuddinghAssociates.com.
Scott Fader contributed to this article.