Thursday, February 16, 2017

Big Companies Using Facebook for Advertising

Founded in 2004 by Mark Zuckerberg, Facebook has gone from a college photo-sharing site to a growing business-networking platform for advertising and multimedia interaction.  But will Facebook ever drive the business of advertising?  First ask yourself, why do advertisers go online?  Going online allows better ad targeting and only targeting intended audience.  Advertisers only pay when users click on the ad and track, which clicks translated to sales. Simply put, that leads to better measure of return on investment because of closer connection to buyers.  Advertisers pay more for views by targeted individuals because of the increased likelihood to convert into a sale. 
What does Facebook offer advertisers?  The main advantage on Facebook for them is to reach the target customers.  Facebook is connected with more than 500 million potential customers.  According to Social Media Today, it is estimated that 42% of the United States population has a Facebook account and today more people visit Facebook than Google.  Advertisers can choose the audience by age, location and interests and test simple image and text based ads and use what works.  So advertisers can make changes to maximize the results and track the progress with real-time reporting. With Facebook, people use it daily to check their Facebook profiles, their interests, sports, and what they do with their free time. For advertisers like Procter & Gamble, social networking sites like Facebook are giant databases about potential customers offering information advertisers normally pay huge money for.
Facebook now has the opportunity to serve ads by people and the preferences and the networks which they are connected to.  Facebook has something that Google will never have.  Facebook has demographic indexing.  Procter & Gamble likes that Facebook reaches a highly targeted demographic efficiently and cheaply.  Facebooks algorithms pick up on behaviors from users “fanning” and groups a user joins.
Procter & Gamble is concerned that Facebook does not touch older people and people who are resistant to new technologies.  Advertisers pay for many false clicks.  Procter & Gamble is demanding new, more precise measurement data.  Procter & Gamble would accept the Media Rating Council standard on ad view ability and work with third party measurement companies that are accredited by them in an effort to change the situation.
So how can Facebook improve its advertising revenues and become the advertising leader?  The strategy of this social-networking is well known.  The system is good and attracts more and more users every day.  I think that Facebook can be number one by increasing the number of its users.  Facebook can do this by creating attractive games to lure users and feed its databases.  According to Social Media Today, Facebooks traffic is a third of the cost of its competition.  But how long will Facebook stay this cheap?  Facebook has started to provide its marketers with new data on display ads, including the milliseconds they appear on a screen.  Facebook’s actions on media transparency are a positive step forward.


Matt Lodato said...

Over time, advertising has become an essential way for companies to spread awareness about a product or service that they are offering. Everywhere you go and everywhere you look there is always a form of advertisement in some way. It has commonly been seen in magazines, newspapers, billboards, store windows, etc. Recently though, advertisements have noticeably been taking over the Internet. On a majority of websites you visit, or videos that you watch, you will see an advertisement. Why has it become so popular to advertise on the Internet? Mainly due to the very high and constantly growing number of people that are using the Internet every second of every day. Seeing an advertisement in person is not the same as having one pop up on your screen and being just a single click away from visiting the site that’s advertising. It was no surprise to me that more and more companies are targeting Facebook as place to advertise. Companies want to post their advertisements somewhere that they know the most amount of attention will be attracted. Given the popularity and high usage rate of Facebook, it makes sense that companies would want to have their ads posted where 42% of the United States is constantly checking. Another reason I feel that Facebook is becoming a major advertising spot is because of the wide variety of people and age groups that it attracts. While it may not be very popular for older people today, as you mentioned, years down the road I think that people from all generations will be using Facebook to some extent. Facebook, along with many other sites on the Internet today have become very smart in terms of knowing more about us than we think. There is a reason why websites like Facebook ask for information about us, such as our age, hometown, school, hobbies and much more. This information is used through complex algorithms to gear specific information towards you. The more these sites know about us, the more they can provide us with what we really want. This could also be attracting companies to post their ads on Facebook because they know the specific types of individuals that they want to target with their product or service. There is no doubt that Facebook has completely changed from a social photo and post sharing site to one that is full of companies trying to push their product or service on the users. Whether you like it or not, I feel that as online advertising becomes more important and as Facebook continues to grow in popularity, your news feed will only continue to get more filled with ads.

Justin Friedlander said...

I noticed how this post was very positive about all the benefits created by Facebook for major corporations who could access the various groups and demographics related to the millions of Facebook users across the globe. However, I believe that there are negative consequences of the increased amount of information that Facebook provides to large companies looking to spread their advertising to target customers. Facebook is constantly compiling information on both users and non-users who visit their site based on likes, page visits and other aspects of the social media website. Many people have become increasingly worried about how great of a degree Facebook is legally allowed to analyze their users’ private and personal information to provide to corporations trying to gain an advantage. Within the past five years, dozens of privacy and consumer protection organizations have complained that Facebook gives out too much private information about its users to third parties. This info sharing can be done through likes, posts, and even games and quizzes that are very common on Facebook. A major danger is the possibility of flaws in Facebook’s cybersecurity measures could allow more malicious individuals such as hackers to commit crimes such as identity theft and phishing with relative ease. Facebook’s global store of information on millions of people cannot go unnoticed by big companies, but it also raises the question of how much private information they are actually allowed to share with third parties and advertisers