Advertising and Wall Street
I do not presume to know much about the stock market; however, due to the recent allegations hinting that certain investment bank underwriters supporting the IPO told clients earlier this month that they were reducing their earnings forecasts for Facebook, the social networking site has had quite the tumultuous ride during its opening week on Wall Street. And knowing what we know about the events leading up to this point, it's not very difficult to see the connection.
It is said these investment banks made the decision to sway their investors after supposed conversations with Zuckerberg. According to these reports, Zuckerberg hinted that he was worried his site's value was decreasing because so many advertisers had been pulling out recently, and that Facebook's mobile version was looking to have an even meeker forecast.
So what does this say about the power/affect of advertisers and their monies spent? It looks to me that; firstly, you need to create a sound platform that will ensure a ROI on ad dollars spent. As we have said before, ROI for ad dollars is not something you should expect immediately (consider it more like any other cost to run a business) BUT if over time, as General Motors noticed, you continue to see no return on dollars spent, you could blame it on the outlet, but it could also be as simple as – the campaign just wasn't good enough.. But I digress.
So where does this leave us? I've established two takeaways from this Facebook debacle. One: Where companies choose to spend their ad dollar has a direct correlation with how successful said company/outlet can be. Two: Some advertising platforms are indeed more successful than others, and just because something is “popular” doesn't mean it's always good for advertising. However; the bottom line is, and a point you will notice me making time and time again , you must think of the consumer before anything else, and no matter what outlet you use to get your message across – if you're not talking to them… they're not going to listen!