Companies Are Seeing Potential in Facebook Ads

Social media. Once thought of as the most efficient way to share silly pictures and cat-friendly videos, social media is now considered the most effective means by which companies interact with customers.

This radical transformation in the usefulness of social media has jolted many businesses across the world to ditch phony customer press releases, once meticulously crafted to persuade consumers to purchase products, and to engage consumers where they reside: on social media platforms.

Staking claim on Facebook and Twitter, companies are moving in to social media communities and are trying to convince residents to associate with their brand.  To do so, many well known corporations, such as Ford, Proctor & Gamble, Starbucks, and 1-800-FLOWERS, are investing millions of dollars on Facebook advertising campaigns, or “Facebook Ads.”

What are Facebook Ads?
Facebook Ads comprise the four “Sponsored” blocks of information under the “People You May Know” section of a Facebook profile page.  These advertisements appear as a result of the information Facebook you share through your Facebook profile.

How are Ads created?
When creating a Facebook Ad, advertisers select from various fields to target users who advertisers feel align with their desired demographics.  Such fields include likes and interests (music, sports, books, etc.), relationship statuses, sex, languages spoken, and educational experiences.  Through the Ads, companies prompt Facebook tenants to “Like” a Facebook page or to visit an external website.

In other words, when you tell Facebook about yourself, Facebook tells third-party advertisers, and third-party advertisers try to sell you things based on this information.

And don’t think Facebook does this for free.

According to eMarketer, Facebook Ad campaigns will reach a 2011 total of $4.1 billion in global spending, more than double that in 2010.  U.S. spending on Facebook Ads is projected to hit $3.1 billion in 2011, representing 10.8% of total U.S. online ad spending.

Do Facebook Ads actually work?
A study conducted by DDB Worldwide and Opinionway Research states that 75% of the people who liked a Facebook brand did so because of a Facebook Ad. The same study also found that 36% of Facebookers who liked a brand de-Liked the brand because it exhibited a low frequency of updates and/or uninteresting content.

Are there ethical concerns?
The unethical dilemma of Facebook Ads stems from the idea that users are unaware what their information is used for. Is true?

In the past, Facebookers supplied personal data to Facebook so that Facebookers could interact with friends, not with corporations. But in the last four years, Facebook users have accepted that the site not only offers information about Friends, but businesses as well.

Maybe in order to eliminate any ethical concerns, Facebook should change its Home page tag line from “Facebook helps you connect and share with the people in your life” to “Facebook helps you connect and share with the people and the businesses in your life.”

What do you think? Does your company invest in Facebook Ads?