Wednesday, May 16, 2012

Poll shows most users distrust Facebook...

Facebook’s public offering will be the largest and perhaps most highly anticipated Internet deal in history. But faced with great expectations, Facebook is staring down some potentially unnerving obstacles when it comes to key areas of monetization and growth: public distrust and display advertising apathy.

According to a new AP-CNBC poll, 57 percent of Facebook users say they never click ads or other sponsored content when they use the site, with another 26 percent saying they hardly ever engage in such activity. Only 4 percent of users say they often click on ads -- results that are only slightly better than the 2-3 percent clickthrough rate some experts consider the benchmark for effective banner ads.

While the company makes money, in part, simply by displaying sponsored content, user clicks are a critical part of an advertiser’s calculus when gauging how effective those ads are and how much they’re willing to pay for them. In the first quarter, Facebook generated 82 percent of its $1.06 billion in revenue from advertising sales. In the company’s online IPO pitch to retail investors, CFO David Ebersman says the company is working to make ads “more relevant, more social, and more engaging” as it looks to grow. Full story...

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