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There is a lot of hype around Social Media and specifically Facebook with the recent IPO. For small business owners the question of Facebook advertising may sound very appealing – especially when given all those stats on how many users they have, how much time they spend on the site, etc.
Unfortunately, as is true with most Social Media, getting the one thing that really counts form a business perspective is usually a pipe dream! That one thing is a ROI or Return On Investment. If it does not make you money then you would have to seriously consider if it is worth doing.
According to a recent (May 2012) survey 83% of Facebook users say they rarely or never click on Facebook ads or sponsored content! You can read more on this survey here http://www.emarketer.com/Article.aspx?R=1009065
Our experience confirms this. There may be a few niches where Facebook advertising is successful but for the vast majority you can get a ton of impressions (the number of times the ad is viewed) with very few clicks and therefore very few leads or sales.
Given these statistics it would seem that Facebook is much better suited to create brand awareness. However for the small business owner I still don’t believe this is a good option.
First of all there are very few small businesses for which it makes sense to spend money, time and effort on brand awareness. To be effective this has to be done on a much bigger scale which requires very deep pockets. When a massive brand like GM cannot get this to work how likely do you think it is that a small business can?
GM recently announced that they are pulling out of advertising on Facebook and they were spending $10 million a year or just under $1 million a month! There is an good article on why GM pulled their advertising on Facebook here http://www.businessweek.com/articles/2012-05-22/why-gm-and-others-fail-with-facebook-ads#p1
Secondly, I believe that most Facebook users quickly develop ‘ad blindness’. This is a phenomenon where they get so used to using the site that they know exactly what and where to look that they don’t even see the ads!
The bottom line here is that as a small business owner you should always be tracking the ROI of your marketing and this is especially important for Internet Marketing. At this point in time Facebook is not an attractive option for most small businesses.