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Facebook gains on ComScore report

Admire Moyo
By Admire Moyo, ITWeb news editor.
Johannesburg, 12 Jun 2012

Facebook gains on ComScore report

Facebook, operator of the world's largest social network, rose after researcher ComScore suggested that marketers can use the site effectively to encourage users to buy products, The Washington Post reports.

Shares of Menlo Park, California-based Facebook climbed 3% to $27.10 at the close in New York. Facebook has declined 29% since it started trading at $38 on 18 May.

Companies marketing to Facebook users who have signalled they “like” a business or have mentioned a brand in a post can have “a statistically significant positive lift on people's purchasing”, ComScore said in a blog post.

The Internet traffic measurement firm posted a blog previewing a report it's releasing this week, titled “It's time to change the discussion on measuring Facebook effectiveness”, CNBC states.

ComScore did not go into any details - saving them for the full report's release on Tuesday - but says it has found that Facebook ads do have an impact.

The company says that, based on its research of consumer behaviour after seeing ads, “Facebook earned media is having a statistically significant positive lift on people's purchasing of a brand”.

Facebook's advertising business has come under fire since the weeks leading up to the company's initial public offering, when revenue expectations were lowered and high-profile advertiser General Motors (GM) pulled spending from the platform, New York Post writes.

GM's decision, which was made while maintaining Facebook's paid ads don't work, led to a debate on the effectiveness of social media advertising.

A number of analysts and industry observers defended Facebook and argued that GM did not fully grasp the power of the social network and its new products, such as Reach Generator, which gives brands the ability to communicate with all their fans.

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