’m inclined to be somewhat harsh on radio DJs, mostly because I’m seriously into music, not inane and pointless chatter, but I have been listening to the Matt Heath Drive show on Hauraki in the evenings. A fair portion of Matt’s down to earth show puts a smile on my face. He plays some decent music and he’s not scared to call BS on obvious BS, which makes for entertaining listening.
Earlier this week, he covered his Top Five Reasons why Facebook isn’t worth One Hundred Billion Dollars (it isn’t of course, not even close, but that's another story). One of the things Matt mentioned is that no one in the history of the world has ever clicked on a Facebook ad, so how the hell will the company ever make any money? Ok, so that’s a typical shock-jock exaggeration for effect thing, but the theory behind it is that we’re conditioned to see straight through the ads, to look right at them and not even notice that they exist.
I for one, completely agree. I use Facebook a lot (a lot!) but I don’t register the ads at all regardles of how targeted they may be, and to the best of my recollection, have never clicked on a Facebook ad. After all, I’m there to interact with my friends, not to shop or search, so I’m effectively just going about my business and ignoring a small area of the screen that serves no useful purpose to me.
I also don’t register the text ads at the top of my Gmail inbox and I use it day and night. Again, my purpose in using Gmail is to send and receive email, not to look for specific information. What about the little strip ads that appear in the Apps and games on my iPhone? I couldn’t tell you what a single one of them is about on any given day; they’re tuned out to the same degree that I‘m oblivious to the price of maize in Malawi. Much the same goes for banner ads on sites, unless they're closely related to the site in question and that site covers something that I'm genuinely interested in.
Which brings us back to Permission Marketing. Ah that dark specter of the marketing lexicon that insists that generic interruption marketing is futile and that you’re not going to really catch my attention unless you do something truly innovative, interesting or outlandish, or if I’m actually in a frame of mind where I want to receive your message. Google ads on a search page do catch my attention though because they are permission based – I'm obviously looking for something and I want relevant feedback. I may not click on them every time, particularly because I speed read, so I can whip through the search results in a hurry, but I am definitely receptive to their message.
The massive discrepancy in the revenue earned per user between Facebook and Google goes a long way to confirming that reaching people when they want to be reached is critical (and works), while hammering them with ads when they don’t is ineffective.
How much money have companies spent over the years advertising to me personally on Facebook, or in Gmail or in various Apps? Probably not a great deal in the grand scheme of things but multiply that amount by all the other disinterested and indifferent online users and you’ll come up with a scary amount of wasted money. There’s got to be a better way.
The marketers at General Motors seem to be thinking along the same lines. Tens of millions of dollars of Facebook advertising have been judged to be so ineffective that the US giant has decided to discontinue advertising on this most popular of social media platforms. The GM Facebook pages however will stay. These pages cost the company virtually nothing but the small amount of consumers who like a GM page and choose to interact with the carmaker are obviously more valuable than millions who ignore the ads. Food for thought, especially for companies who don't have millions of dollars to throw around on ineffective advertising.