Why Facebook Will Boost Advertisers' Brands
NEW YORK (TheStreet) - Despite all the concerns about Facebook's(FB) business model, the social network will deliver significant results for advertisers, according to a research report released this week by comScore, a digital marketing research company.
"We found Facebook fans had significantly higher percentages of purchasing," Andew Lipsman, comScore's VP of industry analysis, told Forbes on Tuesday. "It proves Facebook earned media and advertising are driving purchase behavior."
Doubts about the effectiveness of Facebook's advertising, which accounts for most of the company's revenue, have been partly responsible for dragging the firm's share price down almost 28% since its much-anticipated IPO in May. However, comScore said that the research methods used to support popular conclusions about Facebook's advertising are flawed.
The report, entitled, The Power of Like 2: How Social Marketing Works, is comScore's collaborative effort with Facebook to explain social marketing and how brands can evaluate the impact of their efforts in the space.
Facebook's management anticipated that advertisers would need time to adjust to the non-traditional platform. "We believe that most advertisers are still learning and experimenting with the best ways to leverage Facebook to create more social and valuable ads," the company explained, in its S-1 filing with the Securities and Exchange Commission earlier this year.
Dr. Jacob Shama, CEO of Mintigo, a San Francisco-based lead-generation service said, "Where there's money to be made, people will learn. If you're a big company trying to build a brand, you're going to figure out Facebook."