With 85% of the social media giant’s 2011 revenue stemming from advertisements, Facebook likely looks to its cash cow to assure jittery investors following a rocky initial public offering. Prospective shareholders may want to consider advertising’s reception among college students to gauge the website’s long-term business model.
“I mostly don’t look at the ads because they’re on the side of the page,” Matt McCurdy, a Centre College sophomore, said. “I ignore them.”
The sponsored videos shown before YouTube clips and Hulu programs are more effective because they engage his attention more than the traditional Facebook advertisements, McCurdy said. However, the sophomore said most Internet advertisements annoy users.
“I don’t believe most advertising on social media sites is extraordinarily effective,” McCurdy said. “Social media sites may be where potential customers are, but the people on those sites don’t enjoy being interrupted by advertisements.”
Emily LaForce, a senior at Bethel University, said she is skeptical about Facebook advertisements. LaForce said she prefers YouTube and Hulu as advertising mediums to Facebook because the social network’s revenue-generating messages are unsettling.
“They’re kind of sketchy because it feels like an invasion of privacy when Facebook is giving your information to advertisers,” LaForce said.
The senior said she recently started an art business and relies on the website for free advertising. Forty of her friends and customers have shared a link to her website on their Facebook news feed and received a free painting as part of a campaign she launched to spread her business, LaForce said.
“Give them a reason to share it,” she said. “Other people will see it and trust it more than a normal advertisement because a friend posted it,” LaForce said.
Businesses stand to profit on college circles’ Facebook activity, research suggests. A 2010 USA TODAY report found college students’ spending power was $76 billion. Observers’ insight shares conflicting views on if GM’s decision means anything for the future of social media advertising.
Bart Young, chief executive officer of the creative marketing agency Young Company, said he gives the corporation the benefit of the doubt on forgoing Facebook.
“Investing in young consumers has more potential for future sales than investing in older audiences,” Young said. “If Facebook was not paying off, that says more about Facebook than GM.”
Repeating the sentiments of the college students, Young said he questioned advertising’s role in social media because the paid messages need to be relevant to the user or they risk being perceived as junk.
Dr. Lenita Davis, an associate professor of marketing at the University of Alabama, said GM might only need to rethink its strategy rather than dismiss Facebook as an effective marketing tool. The professor said the American automobile icon may have underestimated a timeless quality that dominates the social networking service now worth billions — self-interest.
“Students can best be reached by giving them things that they can share with their friends,” Davis said. “They want things that will help them build their brand with their friends and those that follow them via social media…they like things that can go viral.”
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