Watching football is a very unmotivated state of mind for the viewer to be in, but companies still spent over $200M in 2012 to advertise for the Super Bowl. The only commercial any of my friends remember is the one with the hot chick for the car company that I can't remember. Companies still spend billions upon billions of dollars per year on advertising not based on search, and simply based on number of eyeballs and potential demographics.
Just because you don't put useful information on Facebook doesn't mean that hundreds of millions don't as well. There are literally hundreds of millions of people that likely put very relevant information on their profile, which means that targeted ads might work for them. The inverse of you is that I use incognito mode on Chrome, so Google likely knows nothing about me, since I don't store any cookies. It might be able to divine something from my IP address, or maybe there's a backdoor in Chrome that overcomes incognito mode for the purposes of Google ads, so who knows.
We are in agreement that Facebook's current state of advertising is terrible. They, however, made $4B last year, and will likely make more this fiscal year.
The only thing we're arguing over is that I believe there is this vague "untapped potential" and you don't believe it exists. Maybe they'll figure out a more engaging advertising mechanism than their current ad platform. Maybe they'll use Google Ads instead of their own ad platform. Maybe they'll buy Netflix and they'll have their own tv channels with traditional tv ads. Maybe companies will be able to pay to get their particular event promoted on people's newsfeeds, in more indirect methods, such as if the new Avengers movie just came out, they could spend money and then Facebook would consolidate and highlight every time your friend went to see Avengers and posted it on their status.
There are a lot of "maybes" paths that lead to much higher revenues and higher rates of user monetization. This is why people are willing to pay 25x revenues, and a $100B market cap at IPO for Facebook. The entire premise of their market cap is based on their ability to increase their user monetization. If they can't, then I agree, they will certainly fail as a stock.
There are two things that separates TV adds during the Super Bowl vs. banner adds on Facebook first there is no competition for a users attention. If Facebook could set things up so every 30 clicks a user was forced to watch a 30 second clip then they could make a lot of money until they lost all their users. Second, people talk about the good ones, people basically don't talk about banner advertising at all. Part of that is the poor ad copy, but mostly it's because people are only barely aware they exist in the first place.
Just because you don't put useful information on Facebook doesn't mean that hundreds of millions don't as well. There are literally hundreds of millions of people that likely put very relevant information on their profile, which means that targeted ads might work for them. The inverse of you is that I use incognito mode on Chrome, so Google likely knows nothing about me, since I don't store any cookies. It might be able to divine something from my IP address, or maybe there's a backdoor in Chrome that overcomes incognito mode for the purposes of Google ads, so who knows.
We are in agreement that Facebook's current state of advertising is terrible. They, however, made $4B last year, and will likely make more this fiscal year.
The only thing we're arguing over is that I believe there is this vague "untapped potential" and you don't believe it exists. Maybe they'll figure out a more engaging advertising mechanism than their current ad platform. Maybe they'll use Google Ads instead of their own ad platform. Maybe they'll buy Netflix and they'll have their own tv channels with traditional tv ads. Maybe companies will be able to pay to get their particular event promoted on people's newsfeeds, in more indirect methods, such as if the new Avengers movie just came out, they could spend money and then Facebook would consolidate and highlight every time your friend went to see Avengers and posted it on their status.
There are a lot of "maybes" paths that lead to much higher revenues and higher rates of user monetization. This is why people are willing to pay 25x revenues, and a $100B market cap at IPO for Facebook. The entire premise of their market cap is based on their ability to increase their user monetization. If they can't, then I agree, they will certainly fail as a stock.