As Facebook Rolls Out Ad Options, Retailers Pass

By Justin Lafferty 

Facebook has been unveiling more options for companies to advertise through the social media site. However, Reuters reports today that many businesses have been eschewing paid options to do what they can to promote their biz for free.

Retailers told Reuters that they haven’t been seeing enough bang for their buck to justify paying for ads through Facebook. When the site offers free options that work just fine, some businesses haven’t been tempted to shell out money for something that they’re not sure will be all that effective.

The story contrasts the differences between seeing ads on Google and on Facebook. Often, people use Google when they’re looking to buy a product, so targeted ads make sense on the search engine. Most people don’t surf Facebook with their wallets in mind, retailers told Reuters.

Facebook users, by contrast, are not typically looking for something to buy. They may get a product recommendation from a friend, then search for it elsewhere and buy days or weeks later. This makes it hard to attribute sales directly to Facebook ads, because purchases are often influenced by other things along the way.

Four out of five people in a Reuters survey this month said they had never bought a product as a result of advertising on Facebook.

CanvasPop, which turns Facebook and Instagram photos into canvas art, has seen success with fan pages and other free efforts such as contests.

It’s more than just small businesses and social app companies that don’t feel like ponying up for Facebook ads. Last month, General Motors withdrew its $10 million ad campaign from Facebook.

However, Facebook is working on a solution:

Facebook is searching for better ways to track impact. Brad Smallwood, its head of measurements and insights, said on Tuesday that Facebook is launching a competition with the Advertising Research Foundation to encourage new ways of measuring return on ad investment.

Winners will get funding from Facebook to develop the projects, Smallwood said.

Readers: Have you tried to advertise through Facebook? If so, did you see positive results?

Image courtesy of Shutterstock.