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Facebook Ads Not Performing? You’re Not Alone

Facebook Ads Not PerformingMore and more marketers are finding that Facebook ads are not performing. While companies aren’t abandoning their Facebook brand pages, it seems that advertising on Facebook is not living up to expectations.

GM decided to eliminate their $10,000,000 Facebook advertising campaign calling it ineffective and not significantly helping to sell more products. They’ll still spend about $30M on Facebook related initiatives but zero of that money goes to Facebook.

So GM thinks cars and trucks don’t sell well with Facebook ads. What about more common purchases like games and clothes?

Gamestop invested in a Facebook store but shut it down after less than a year. Many other retailers including Gap Inc, JC Penney and Nordstrom have also closed their Facebook stores. Sucharita Mulpuru, an analyst at Forrester Research, told Bloomberg that it just didn’t work:

“There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop,” Mulpuru said in a telephone interview. “But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

For years, Facebook has been hailed as a fantastic place to grow your business. With so many active users, you’d have to be crazy to disagree, right? Well, maybe, maybe not.

Facebook ad CTR (Click Thru Rates) have dropped over the years and hover around 0.051%. That’s half of the online advertising industry standard 0.1% CTR and is dwarfed by the 0.4% CTR of Google’s ad network.

Where are marketers spending their ad budgets? Google.

Google 2012 revenue for the 1st Quarter was $10.65 Billion. That’s 10x Facebook’s paltry revenue of $1.058 Billion for 2012Q1.

Should you be spending money on Facebook ads? It depends.

If you want to expose your brand to people when they’re not interested in shopping and you want to engage your existing clients, then the answer might be yes.

But if you’re looking for direct sales resulting from your marketing budget, you’ll see a much better ROI from SEO and Google AdWords.

Have you tried Facebook ads? What’s your experience with the performance of Facebook ads?