After General Motors (GM) very publicly withdrew its paid advertising from Facebook in the run up to the social network's IPO listing, reports now claim the world's largest car maker is looking to get back on board.
In May, GM stated it would pull $10 million in paid advertising due to a “lack of effectiveness” and the news raised concerns over the sustainability of Facebook's business model. It later emerged that GM's decision to pull advertising was also possibly influenced by Facebook's refusal to let the company run intrusive homepage takeover ads.
At the time, GM said it would continue to have a presence on Facebook in the form of Facebook pages, but that it would not make use of the paid advertising options.
According to a Wall Street Journal report, GM and Facebook are yet to reach an agreement, and GM is still pushing Facebook to better prove the effectiveness of its paid adverts.
The same report quotes Facebook's head of measurement and insight, Brad Smallwood, as saying: “It's a myth that Facebook advertising doesn't work.” Smallwood is also quoted as saying it can take up to a year to get results on a single campaign, and that the right measurement techniques need to be used.
Amid the speculation around the sustainability of Facebook's business model following the initial fallout with GM, World Wide Worx MD Arthur Goldstuck said the lack of effectiveness of GM's advertising was not a reflection on the effectiveness of Facebook ads in general.
“Facebook has only begun to explore advertising models. It is generating serious revenue, and will probably find ways to boost that revenue substantially in the coming years. Of course, [CEO Mark] Zuckerberg's ego could always act as a brake on the company's progress, but chances are that he also wants to see the business boom,” said Goldstuck.
Social commerce
As the social network nears the one billion user mark, what remains clear is the company's intention to better monetise the platform. The recent release of the Facebook App Centre and the inclusion of paid-for apps is one such example.
Facebook has also begun phasing out “Facebook Credits” in favour of allowing developers to accept local currencies and introduce subscription plans in their apps. The move is expected to widen e-commerce opportunities for Facebook and drive new revenue streams.
An imminent push into e-commerce has also been foreshadowed by the discovery of coding on the social network that hints at social commerce features such as a “Want” button and the sharing of users' purchases.
The code was uncovered by developer Tom Waddington, who detailed his findings on his blog. “The 'product.purchased' action will share purchases (or donations, it seems) of products, or items in Facebook games,” says Waddington. “It appears that product wants and purchases will be accessible similar to other user actions - music, news and video.”
Through the introduction of a Want button, Facebook could open up more targeted advertising options, while the other social commerce features could broaden the social network's scope from purchasing intent to actual purchases.
Share