Just days before Facebook’s highly-anticipated initial public offering, some investors continue to fear an exodus of Facebook’s biggest advertisers if Mark Zuckerberg fails to tighten his focus on ad sales.
The concern follows a report on Tuesday that General Motors (GM: 21.91, +0.49, +2.29%) will stop buying ads on Facebook, as it sees them as ineffective...
..."A major player such as GM withdrawing from Facebook’s paid advertising does not bode well for the company who is so reliant on advertising revenue,” said Kenneth Wisnefski, social media expert and CEO of WebiMax.
Yet, while Facebook continues to be criticized for its meager ad offerings heading up to an expected $104 billion IPO, especially when compared with industry leaders like Google (GOOG: 628.93, +17.82, +2.92%), social media experts say GM’s departure represents more of a public relations black-eye than the start of a mass exit...
...Either way, it’s a reminder that the social titan still has some work to do on its advertising platform heading into one of the biggest IPOs in history.
“Facebook has never really been able to figure out a way to integrate an effective market strategy for clients,” Wisnefski said. “That’s what they need to figure out to make Facebook less of a fad and more of a legitimate company...”
...Of course, all advertisers have different objectives, so while General Motors may find Facebook ads unworthy, a company just trying to interact with customers may find the platform effective...
...While Zuckerberg has long backed the company’s advertising method, saying he wants to concentrate on improving the product and not have ads clutter the site, the immature ad platform has put Facebook at a disadvantage to more advanced competitors.
The 28-year old CEO has long been criticized for his unwillingness to focus on driving revenue as the social media giant heads into a massive IPO...
...“I think Zuckerberg is in denial here,” Wordstream’s Larry Kim said. “He wants to be this cool company that’s all about ‘connecting people,’ but 85% of his revenue is driven from Internet advertising - the sooner he figures this out, the higher the chances that Facebook is actually worth $100 billion-plus.”...
...Wisnefski said he “wouldn’t be surprised” if Facebook already plateaued as far as revenue...
Originally Posted by K6BBC
