Sunday, July 8, 2012

Facebook advertising revenues are drastically falling!

The Facebook advertising revenues in the United States have fallen by one third compared to the revenues from the 2011, according to a new report released this week.

After growing at an impressive rate of up to 60% during the first three quarters of 2011, the growth of Facebook's advertising has fallen by more than half to 30% in the fourth quarter of the previous year. Even worse, during the first part of 2012, the growth rate fell to 21.2%, according to a report of the consulting firm IDC.

According to LA Times, the slow growth leads is the main reason Facebook is slowly losing his market share. After holding nearly 14% of display advertising in late 2011, Facebook's current share fell to 12%.

The author of the report and Vice President of Media and Entertainment at IDC, Karsten Weide, spoke to LA Times about this.

"The effectiveness of advertising on Facebook is just really terrible," Karsten said. "Advertisers are realizing that Facebook isn't as effective as they first thought. They're pulling their money and taking it elsewhere."
Last month, General Motors decided to withdraw $10 million intended for advertising on Facebook because they believe that this type of advertising has very little impact on users decisions to buy a car.

The decision came just before Facebook's stock exchange (IPO) and for Facebook, this was a big blow.

General Motors is of course not the only company that thinks that Facebook is not effective for advertising. What do you think, is it worth to advertise on this social network?