Facebook advertising may not be the most effective source as many users are hesitant to share or recommend products on the social networking site.
It is a well-known fact that Facebook, the largest social networking site, earns most of its revenue from advertising. Many advertisers are turning to well-established sites to promote their business, products and services and Facebook offers them a reliable platform. In addition, the social networking giant has rolled out many updates to lure advertisers to the site.
Unfortunately, a new study found that it may not be the most effective way of advertising, especially if companies want their brand to be promoted by word of mouth. Despite having more than 1.23 billion active users, most of these users are hesitant to share or recommend products on the social networking site. It is believed that people prefer talking about their favorite products in face-to-face interactions, rather than on social networking sites, the study finds.
"Social media websites such as Facebook have completely revolutionized the way we share information and communicate with each other. However, our report shows that when it comes to sharing recommendations on products and services on these sites, users tend to stay quiet." Dr Andreas Eisingerich from Imperial College London said in a press release, Friday. They would rather communicate via word of mouth because many users don't want to embarrass themselves online as work colleagues or acquaintances may not endorse or appreciate the same products that they do. Our report could influence how businesses spend advertising budgets on social media websites."
A new poll from Gallup echoes the new study findings. Gallop discovered that more than 62 percent of respondents said social media has no influence on their purchasing decisions. The results were concluded after surveying more than 18,000 American adults. This can impact Facebook and other sites that mainly depend on advertising to generate revenue. If the advertisers fail to get desired results with social network advertising, they will move on to other ways to promote their services and products.
"A solid majority of American adults say that social media have no influence at all on their purchasing decisions - suggesting that the advertising may be reaching smaller segments of the market, or that the influence on consumers is indirect or goes unnoticed," the Gallup report reads.
The report also revealed that U.S. companies spent $5.1 billion on social media advertising in 2013, Facebook alone generated $7 billion in ad revenue last year globally.
