Facebook Tries To Prove Its Advertising Works

The mega-millionaires and multi-billionaires at Facebook are fighting to keep their paper value afloat.

A lingering question for many businesses is, “How can I make money with social media?”. I’ve heard that from a number of my clients. And there’s no easy answer.

Right before Facebook’s IPO, General Motors made a very public withdrawal from advertising on Facebook because GM didn’t believe the ads were effective.

Not long after, a Reuters/Ipsos poll concluded that many consumers, around 80%, aren’t swayed by ads or comments on Facebook. With its share price dropping and the effectiveness of its ads called into question, things weren’t looking too good for the social network

However, comScore has just released data that might brighten a billionaires day. Their research finds that advertising on Facebook can drive increased sales. The report, “The Power of Like 2: How Social Media Works” focused on the experiences of large brands such as Target, Starbucks and Best Buy. It looks at paid ads on Facebook as well as earned media exposure via brand mentions in status updates and comments.

ComScore said that users who saw paid ads for an unnamed retail company were 16% more likely than those who didn’t to make a purchase from the company’s locations and made online purchases 56% more frequently.

The report also showed people who “Like” Target were more likely to buy from the company 21% more frequently, and people who saw unpaid marketing messages from Starbucks made purchases form the company every four weeks 38% more than those who didn’t.

Conclusive? Meh. Advertising on social media is really no different than advertising via other channels. The message has to deliver the right benefits/motivators aimed at the target audience through ideal connection points. Perhaps GM’s ads weren’t that great. Or maybe, those on Facebook are really not the GM driving types. Frankly it seems likely that selling a latte via Facebook is lot simpler than selling a Chevy Volt.