Comment by Locke1689 | Hacker News Reader

Comment by Locke1689 | Hacker News Reader

Parent Full thread

Now, it is possible that some extremely niche businesses have found limited utility from ads (for example, BustedTees and social games may be the lucky few)

Woah, wait, stop. It was jarring that the author glanced over this. You can't dismiss the exceptional just because it's exceptional. You can dismiss the exceptional when you understand why it's exceptional and can make an argument for why it is irrelevant.

In other words, why are social games and Busted Tees successful? There's really not a lot of obvious crossover in what they're selling. One possible explanation is that they're "impulse" purchases which mesh well with a social environment. Social games mesh because Facebook connects you to people and once you're connected you would like to do something with them. T-Shirts seem to be a similar sort of social sharing, à la Pinterest. This seems to imply a lesson: if you wish to market on Facebook you should probably be marketing with Facebook. GM probably didn't have success because what they were doing was really orthogonal to the Facebook experience.

One thing that people tend to forget is that most ads are really bad. Just because naive advertisement doesn't work on Facebook doesn't mean all advertisement doesn't work on Facebook. I wouldn't count Facebook out so quickly -- they just need to pivot their advertisements to make them more lucrative for all involved.

> Just because naive advertisement doesn't work on Facebook doesn't mean all advertisement doesn't work on Facebook.

We provide local services and Facebook Ads have worked WAAAY better than Google Ads. We have a simple "lead-gen" type model. They are cheaper, they give MIND boggling number of impressions. Early 2010, they were really cheap.. then costs started going up. Still its cheaper than buying Adwords.

I agree with Perla and have found the same to be true in my experience. I would agree with him implication though, that the reason those ads work is because they themselves have sketchy business models. Think about what you see a lot of on FB: paid higher education, ebook/seminar stuff, gimmicks, apps, t-shirts. In other words: high margin crap. It works because they can play the hot potato game, passing the loss on to the buyer (just as FB did to them). GM didn't have success and neither did American Apparel or most other brands because they make and sell real things with real business models.

The point is that these are small markets (funny shirts) compared to stuff that actually makes lots of money (cars).

Funny shirts do not a $100 billion company make.

If I had to guess I'd say a very large portion of Google Ad Words revenue is made up of Funny Shirts. Or San Francisco Dog Walkers or Faucet Sales in Portland.

You're digging yourself into a hole with this position. Very successful advertising businesses are built on small niche advertisers. (valpak anyone?)

The question for Facebook is whether there's enough of these successful advertisers to make a 100B business.

Because you go to Google when you want a dog walker or new faucet, you don't go to Facebook.

You don't really have to guess. Last I saw something like 15% of Facebook revenue was Zynga-related. So it's likely they're truly worth a quarter of their current valuation or so, on the basis of funny t-shirts and social gaming writ large.

Jonkee is right. Intent to purchase is the difference

no, man, you don't understand: this is the genius of economy 3.0, where we all make money by sitting on our ass playing xbox 360 and selling farmville ads for funny, made-in-china t-shirts.

Does GM get better ROI on its TV commercials that I skip with my DVR than it could with Facebook ads that just sit there on my screen glaring at me?

I can only skip commercials if I've recorded the show. If I want to watch live (sporting events!), I will eventually have to sit through commercials.

Facebook ads, on the other hand, I block in real time and don't even remember what they look like.

I think you're on to something there. GM ads probably took you away from Facebook and away from your social sphere, if they had instead kept the user inside facebook and continued the ability to interact with your friends, they may have created a lucrative opportunity for themselves.

Reply on news.ycombinator.com