What advertisers want to spend their money on? Advertisers want targeted advertising. Ads that will be displayed to users, who will find relevant ads based on the interests of users. Facebook (FB) displays advertisements to users that the advertiser chooses based on demographic data such as location, age, and keywords selected for subjects. However, Facebook advertising contributes to advertising revenue potentially lost. Here is an example.
Example: XYZ pest control company, runs a Facebook advertising free home inspections. It gets displayed to users of 18 years of age and more, located 15 km away from Orlando, Florida, using the fight against parasites of keywords. This is how the advertising runs. Here's where the advertising revenue potential waste that happens. A user publishes on his script has a bug in its house problem, while several others users of how his post "Sorry to hear of your problem bug." or something similar. Just because a user commented another users timeline "Sorry to hear about your bug problem." is not a law or relevant for users to comment on pests. And when Facebook displays advertising control of pests to users commenting on "Sorry to hear of your problem bug." advertising revenues are probably wasted.
Pest control XYZ Company, runs an advertisement from Google (GOOG) free home inspections. It is displayed to users who are actively seeking web expressing interest current and relevant for the fight against parasites and related research, located 15 km away from Orlando, Florida.
That is why Google advertising model is greater than Facebook.
It is hard enough as an advertiser to attract attention users on Google, where a relevant advertising based on the theme of search for users is displayed. Facebook is the social network. It's even harder to attract attention users who is 'socialize' with an advertisement that user does not directly expressed an interest.
Until Facebook can implement an advertising delivery system to increase relevance of advertisements based on the interest of users, FB cannot deliver the same "bang for buck" that Google can.
I do not know that this has something to do with why GM pulled its advertising in FB campaign. That money is better spent with GOOG.
Not to mention, the erosion of revenues that mobile advertising is already originally as a person seems have monetized successfully the mobile landscape with advertising.
I wait patiently Facebook stock to take a turn for the worse as it's counter part Zynga (ZNGA). Until the following problems are solved.
1 Facebook advertising delivery system needs to be improved in order to reduce potentially lost advertiser dollars.
2 Facebook needs to find a way to monetize its 900 million users, of which it is currently failing miserably to do. Facebook will never as many advertisers as it does to users. Facebook needs to get users pocket money to become a real winner.
3 How value is on Facebook? Facebook currently has a value of 'zero' to its users, Facebook is free. If Facebook wanted to monthly charges its users to use the service would probably result in a mass exodus. This means that Facebook has little or no value to users monetize-able since users would be unwilling to use it if they had to pay for it.
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