Social media has the potential to be an extremely powerful marketing tool for businesses. But because it is so new compared to traditional channels, marketers are having a difficult time measuring the extent of its impact. Some organizations believe social media marketing is a “must” to reach younger, technology-savvy generations; yet others are beginning to question it’s true value. 

Recently, large organizations have been making headlines by voicing their concerns on the value of advertising through the world’s largest social networking platform, Facebook.

In May, the General Motors Corporation, which was spending $10 million on Facebook advertising, announced that Facebook was not meeting their expectations; thus, it would no longer pay for Facebook’s marketing “solutions.” If a global corporation like GM can’t see positive results with its $10 million Facebook advertising budget, how can a small business with a limited budget find success? As a result, Facebook is left trying to figure out how to make advertising relevant to its users, and businesses are left trying to answer the question: is Facebook advertising really worth the cost? 

Even though it offers a variety of marketing methods, Facebook is having a difficult time satisfying businesses’ demands. Forbes says that “Facebook does not do a good job of creating reports for advertisers that demonstrate why their money is being well spent.” Just like the situation with GM, many businesses are spending significant amounts of money on Facebook’s marketing experiments and are not seeing results. That’s not surprising when EdgeRank (Facebook’s news-feed algorithm) filters businesses’ posts out of 84% of their fans’ news feeds. 

Recently, Facebook announced another advertising method, called Promoted Posts, in which a business can pay Facebook to promote one of its posts so it has a better chance of showing up in fans’ news feeds. Promoted posts are different from paid advertising in that businesses are paying to reach a greater percentage of their already-acquired fans, not a greater percentage of Facebook users as a whole. In other words, businesses can pay Facebook to disable EdgeRank so that their posts aren’t labeled irrelevant and filtered out. The problem is that at the same time Facebook is pushing new marketing solutions it’s driving businesses and users away - especially now that advertisements not only show up on the side of the page, but also in users’ news feeds.

While some social networks prove to successfully drive sales, the same has not been said about Facebook. As a matter of fact, Reuters reported earlier this week that “four out of five Facebook, Inc. users have never bought a product or service as a result of advertising or comments on the social network site.” The problem Facebook faces is that it was created to function as a social outlet, not an advertising outlet. Users are starting to get annoyed with the excessive number of advertisements that seems to be overtaking the website, and now - with Promoted Posts - their news feeds. In the same way that people do not like being harassed by telemarketers during dinner time,  Facebook users do not like being targeted by advertisers during social time. 

Forbes says that “Facebook can’t create sufficient value because in its ham-handed efforts to make all its consumer data useful to advertisers, it is making consumers quite unhappy.” As a result, it seems that the more Facebook caters to advertisers the more likely users will say goodbye to Facebook.

So is Facebook really worth the cost? 

It depends on the marketing strategy. Businesses that use Facebook only to drive sales are unlikely to find success and more likely to annoy users. Selling products via promoted posts is no different than barging into someone’s home during a party and throwing advertisements at guests while they are trying to have a conversation. It’s impolite, but that’s exactly what Facebook’s marketing solutions allow businesses to do - interrupt conversations in order to impose sponsored posts on users. These types of strategies earn businesses poor reputations, not revenue. On the other hand, if businesses use Facebook as a social tool to socialize with customers, they will build customer loyalty and generate long-term sales the way social networking and advertising was originally intended. 

Social media is about having a presence and showing interest, so use Facebook to build relationships with customers. By doing so, customers will be more inclined to share or like your posts rather than hide them - or worse - unlike your page.