It seems like every month more and more companies are turning to Facebook to advertise their product and increase their sales. But according to this new study, they are wasting their time.
In a time where Cyber Monday sales increased 30.3 percent from 2011, the study found that social networks generated only 0.41 percent of online sales, a 26 percent decrease from 2011. This is an astonishing find and could greatly change the way companies advertise online. This study supports the idea that social media is for branding and not for selling. The networks are built to build a relationship with customers and a trust between the consumers and the brand.
I think a big issue that this studies data supports is that there is no intent to buy by users while on social media sites. Google made 10 times as much as Facebook last year on a little more than half as many advertisements. When I am on Facebook and an advertisements pops up in my face, I see it as annoying and it just gets in my way of my activity. However, if I am searching for something on Google and an ad comes up, I may pay attention because I am in the mood to buy.
So what does this mean for the future of Facebook. First, a lot more research will be done. Expect very in-depth focus groups and research that looks into the behaviors of people with ads on Facebook compared to Google. This also means that companies will take a long look at whether advertising with Google is right for their business. I think we will find many companies moving to a platform such as Google +. For me personally and many other musicians, we will and are ready to move to the New MySpace once it is up and running because it provides a better platform to advertise our brand without dealing with paying to promote content just to have our fans see the statuses in their news feed.