There is a mistaken belief that because Online marketing strategies are still in their relative infancy yet get great traffic, that all you need to do is turn up and buy a ticket, the difference between good and bad strategy is huge
Brisbane,Queensland (PRWEB) May 17, 2012
As Facebook prepare to launch their IPO next week some doubts have begun to surface about the future of the social networking giant. The Wall Street Journal ran with a feature today entitled “GM says Facebook Ads Don't Pay Off”, which made the point that GM have not found the Facebook display advertising they have been running to be effective though they are planning to increase their content strategy on the platform. Facebook generate the vast majority of their revenue from display advertising. According to Emarketer digital intelligence they are still the number one revenue producer in the display advertising market, just ahead of Google(though Google generate around 700% more total online advertising revenue according to emarketer than Facebook).
This followed the embarrassing revelation that mobile traffic was cascading onto the Facebook platform at the cost of desktop/tablet traffic and Facebook currently do not generate meaningful revenue from people accessing their platform on their mobile phone.
However despite the bear case starting to materialise Facebook increased their IPO expected launch price to between $34 and $38(previously it was projected at $28 to $35 2 weeks ago) which will value the company in the region of $100 billion, overtaking Amazon and Disney, this despite 2011 annual revenue sitting at only $3.7 billion and the first quarter of 2012 having seen a decline in advertising revenue. Experts are forecasting a substantial increase in share price on IPO day as Facebook focus on growing and monetizing their audience, currently sitting at 901 million users worldwide.
Online marketing specialist David Twigg speculates “Facebook has created a very unique advertising platform based on demographic knowledge that no census or database in the world could rival. It knows what it's users like,what they do,where they go,how they use the Facebook platform beyond gender,age,hobbies and career situations. I wouldn't be surprised if after the hype of the launch, the share price falls back again but they have a great opportunity to leverage their audience to innovative advertising strategies if they make the right moves in the next year or 2.”
The same Wall Street Journal article that led with GM's withdrawal from Facebook advertising also featured Subaru and Ford who were both finding their Facebook advertising strategy was paying off so despite losing the 3rd largest advertising budget in the USA(behind Proctor and Gamble and AT&T according to Kantar Media) the signs are that strategy will likely determine winning or losing. David Twigg says “There is a mistaken belief that because Online marketing strategies are still in their relative infancy yet get great traffic, that all you need to do is turn up and buy a ticket, the difference between good and bad strategy is huge.”
The irony of course is that GM just reported record profits in the 103 year history whilst Ford reported yet another disappointing quarter.