Social Media needs Social Ads. What does it mean? Before writing this article I thought a lot about What does it mean? Recently a lot has been written about Facebook display ads are not working. Just two or three days before Facebook IPO GM announced that they have suspended the $10 million display ad spending on Facebook because they are not convinced about the sales result which Facebook display ad is producing.
One point which I found very interesting that GM also said that they will continue spending $30 million on content creation for the pages which GM brands has on Facebook. GM think that these pages are very important for engagement. GM didn’t told that how much sale’s result a GM brand Page on Facebook is producing for GM.
[highlighter color="gray" ]GM is ready to spend $30 million on content creation which is three times the display ad money. One thing is clear. Facebook is producing result. Their free brand page is producing result.[/highlighter]
Twitter is also working on developing a revenue model for Twitter. The approach of Twitter is extremely serious and Twitter is working on fitting the revenue model in the ecosystem of Twitter. Twitter approach of developing their revenue model is based on what is happening inside the Twitter. Twitter is not going for display ads because that will degrade the user experience. It is very important to comprehend for any social media sites that their revenue model should roam around their core of business.
Why Google ad model is so successful?
There are two dominant reason I have come across after lots of analyzing.
1. The text ads fits exactly in the search result page. It feels like they are built to be there.
2. The ads are relevant to search. Relevancy of ads increase the potential of generating result for advertiser and user. This is the one of the main reason Google ads produce extraordinary result.
What a social media site should do?
1. Social Media should work on carefully developing a revenue model which is based on Social ads and results. When I am saying social ads it doesn’t mean an ad which is related to some cause or NGO. It should fit in the ecosystem of the website.
2. Relevancy of ads is very important on internet.
3. Social media sites should do their calculation precisely by working extensively how their platform is producing result for brands and corporate. It is very important and they should develop their revenue model around how their Platform is helping the brands to produce result.
GM can spend $30 million on content creation but can’t spend $10 million for display ads. As stated above GM accepted that Facebook brand page is producing result for them and it is very important. GM is extremely right on the front that they should not spend on display ads but Facebook platform is producing some great result for GM that why they are ready to spend $30 million extra for content creation.
I am exactly saying that Facebook should charge each and every brands for these results. This is the real and actual ads on the platform of Facebook. These brand pages are using their page to produce Social ads which fits exactly in the ecosystem of Facebook that’s why GM is ready to spend 3 times more money on content creation than Facebook display ads.
I will not be surprise that if in recent future Facebook has started charging brand pages some monthly rental for their brand Pages. That will be start of Social ads on Social Media.