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By: Sebastian Due
The advertising Industry has always sought to go where the costumers go, and with 600 million users worldwide, it seems that the costumers are going to Facebook. But is advertising on Facebook really that great?
Facebook has become the biggest social network site, with more than 600 million users worldwide. The average user spend more than 6 hour each month on sharing content, connecting with networks and much more. The significant popularity of Facebook, among consumers, has attracted many companies who tries to take advantage if this new media by advertising their brand through Facebook. This is exemplified by big companies such as Starbucks and Coca Cola now spending millions of dollars on Facebook advertising. Given that so many companies are venturing into the Facebook jungle, it might be relevant to ask the question: Is advertising on Facebook really that great?
The first thing to take into consideration when talking about social network sites, such as Facebook, is that they are different from classic advertising, which is often defined as “paid one-way communication in a mass media”. One of the main differences is that Facebook creates the possibility of two-way communication between a brand and its costumers. The two-way communication is made possible, thus the costumers can always comment on a company’s Facebook page, and thereby engage in a dialogue with the brand. The two-way communication creates a golden opportunity for companies to establish beneficial relationships and create more loyal costumers. A good example on how a company uses its Facebook page to do this is Pepsi’s Facebook page (facebook.com/pepsi). At the page the consumers can comment on frequently asked questions, and thereby engage in a dialogue with the brand. Furthermore, Pepsi posts competition and videos exclusively to the members of the page, which can create a feeling of brand loyalty and thereby make the consumers brand advocates. The communication between a brand and its costumers do also, according to Tuten (2008), enhance the costumer’s perception of a brand as a person, which is described by the brand guru Aaker to be a good way to enhance brand equity.
However, despite these advantages it might also be beneficial to consider whether or not the meaning of liking a Facebook group has lost its value, since everyone these days is liking a lot of sites it is hard to imagine that everyone is genuine brand advocates for each brand or site their like. Beside the ability of enabling companies to engage with its costumers, Facebook allows for brands to use the power of word-of-mouth in an entirely new way. What the site does is really simple, whenever a user likes a page or advertisement it will be displayed on that users friend’s pages as well, and on it goes. This tool is very useful as a survey from Nielsen shows that people are 60% more likely to “like” an ad if it is suggested from a friends page, and more importantly, from a result orientated point of view, the costumers are more than 4 times as ready to buy the product if it is recommended by a friend on Facebook. This is very much in line with the argument that the consumers are turning towards social media to collect the information needed before making a purchase decision consequently because people perceive social media groups as more reliable sources than traditional media. The shift in communication and the increased word-of-mouth is not only an advantage for an advertiser.
Since Facebook allows people to interact on large scale, it also enables consumers to discuss, and potentially critize brands in a much larger public. Companies has for a long time been aware of the power of word-of-mouth but as a consequence of social networks word-of-mouth has now changed. This means that if a costumer has a bad thing to say about a company, it can easily get out to hundreds of thousands of people by the simple use of a keyboard. This results in a massive loss of control for the companies, as it is hard for them to control the conversation between consumers. A good example of how costumers have used word-of-mouth, negatively about a company, is the Facebook group “The disturbed feeling you get after seeing the new Coles Ad” this is a group for people. These kind of groups are impossible for companies to control and it clearly illustrates how the control has shifted away from the companies and in to the hands of the consumers. Advertising on Facebook is not just about communicating with costumers it is also about communicating with the right ones. Facebook is especially suitable for such purpose, thus it offers a great opportunity for companies when it comes to segmentation and targeting. Advertising in a classic media, such as television, can be very useful.
However one of the big challenges is to reach the specific target audience with both the right demographic and physiographic profile. An example would be a company selling skiing equipment such company would try to place its advertisements at times where people with the physiographic interest for skiing would be watching the television. However there is no guarantee that these people will get the message and the commercial would furthermore reach a lot of people without any interest, who would therefore reject the message. In comparison to this Facebook has the advantage of delivering very useful data, which is easy to measure since people type in a lot of demographic as well as psychographic data on their profiles. This data can then be used to target the consumers much more precisely. This means that the aforementioned skiing company can now target the Facebook user who has skiing as their interest, and thereby match the offering with the interests of the users, resulting in a much more precise targeting. The main question to this is then whether or not the consumers accept these advertisements or not.
Research conducted by Webtrends shows that the users of Facebook only click on an ad one out of 2000 times it is displayed. This might be the result of people feeling offended by the use of personal data to address them directly, and thereby they might reject the message of the ad. As mentioned earlier in the article it seems like the hype among companies to create a Facebook page and advertise on the site is never ending. This is exemplified by the Chief marketing manager of the doughnut company Krispy Kreme, explaining to adage.com how the company will no longer do TV commercials but mainly focus on reaching more people on their Facebook profile. And it seems like a lot of the companies using Facebook has great success. Operations manager at Melbourne interactive agency The Online Circle, James Coleman see it quite differently. He argues that most of the Facebook pages created by companies are fail to live up to the expectations. He further explains that the main reason for this is because the companies are not delegating enough resources to maintaining their Facebook activities, something which is backed up by Mangold & Faulds (2009) who underline the importance of integrating Social media activities into the integrated marketing Mix in order to becomes successful.
As most thing in life, there is no right or wrong answer to the question on wether or not Facebook is a useful tool in advertising. It seems like it depends on wether or not the company delegates the sufficient resources and wether or not the advertiser communicates efficiently with the target audience. If you as an advertiser do these things, there is big chance that you will “become a fan of” Facebook.