only 3 percent click on ads regularly. Some 17.8 million Mozilla Firefox and Google Chrome users even employ Adblock Plus, a browser plug-in that disables Facebook ads entirely.
In the wake of the GM announcement, Facebook commissioned marketing analytics firm comScore to conduct its own study on the effectiveness of Facebook’s marketing platform. ComScore found that Facebook activity—including both advertising and earned media (like wall posts, likes, and shares)—had a long-term effect on purchasing. According to Vice President of Industry Analysis Andrew Lipsman, this “proves Facebook earned media and advertising are driving purchase behavior.” Facebook’s own research, based on 60 large-scale marketing efforts by companies like Applebee’s and Best Western, found that 70 percent of advertising campaigns generate a three-to-one return on investment, while 49 percent generate a five-to-one return. Some analysts like digital marketing consultant Andreas Ramos have criticized these studies, however, as lacking objectivity and missing crucial research data.
While Facebook’s paid advertising revenue grew by 61 percent in 2012, that growth was predicted to slow to nearly half that in 2013. Journalists and bloggers have been raising questions about Facebook’s long-term sustainability as a marketing platform since the social network began offering paid advertising. Now that Facebook must demonstrate profitability to its shareholders, however, the stakes have never been higher for the company to assert a lean, profitable marketing platform. With the aid of some heavy hitting partners, Facebook may do just that. Just a month after GM pulled its ads from Facebook, corporate titans Ford and Coca- Cola announced plans to intensify their social media marketing efforts by investing in new, multi-million dollar advertising campaigns on Facebook. “It can still make money,” Tom Foremski ruminates, “but can it make enough to support its share price?” Time will tell for the social media giant.