Amid Criticism, Facebook Attempts to Diversify its Ads

Despite providing marketers access to the largest media audience in history—with an equally unprecedented amount of information on each user—Facebook’s initial advertisements have been viewed as a flop by many firms using its advertising platform. Citing a lack of value and comparing the performance of ads on Facebook’s network versus its competitors (namely Twitter, Google+, and LinkedIn), executives at these firms are questioning the future of the social media site and its place in digital advertising distribution.

Facebook has an undoubtedly secure near-term future, but a recent trend of teens becoming disenchanted with Facebook does not bode well, considering this is a highly valuable demographic that is key to future success. To combat the growing negative sentiment, Facebook continues to experiment with ad placement, amount, and type. Recently, Facebook initiated video advertisements on its platform, and is opening up the platform to its popular Instagram subsidiary as well.

For an admittedly young company—and one whose revenue is growing rapidly—the naysayers can be put to rest relatively easily for now. But Facebook’s future in the digital marketing space will depend on its ability to innovate, keep its advertising base, fully engage its users, and diversify its ads to maximize revenue. This will be an interesting work-in-progress going forward that is certainly worth paying attention to.

Source: “Facebook’s Marketing Biz Dissected by Forrester”

http://news.cnet.com/8301-1023_3-57609726-93/facebooks-marketing-biz-dissed-by-forrester/