AP-CNBC: Only four percent of Facebook users click on ads
updated 01:45 pm EDT, Thu May 17, 2012
More than half of respondents wouldn't purchase goods through Facebook
More troubling news has emerged in the run-up to Facebook's $100 billion initial public offering, as an AP-CNBC poll of Facebook users found only four percent of respondents often clicking on ads from the social network. The poll also found that a solid majority of respondents doubted the safety of purchasing goods and services through Facebook.
The poll surveyed 1,004 Facebook users aged 18 and over. A slight majority of those surveyed said they never click on ads or other sponsored content on Facebook, while another 26 percent said they hardly ever click on such ads. When asked how safe they felt when purchasing things through Facebook, 54 percent indicated that they didn't feel safe at all, while another 28 percent said they felt somewhat safe. Only eight percent said they felt extremely safe, and another 10 percent said they didn't know.
Facebook's four percent click-through rate does slightly outperform the two to three percent rate sometimes used as a benchmark for effective banner ads, but the news could prove damaging to investor outlooks on the company as it approaches its IPO. Eighty-two percent of the social network's $1.06 billion first quarter revenues came from advertising sales. User opinions on the safety of purchasing through Facebook could prove particularly damaging, as the site has been hoping to popularize Facebook Credits, a virtual currency system allowing users to buy goods and play games through the site.
Facebook has been attempting to demonstrate room for continued revenue growth as it courts investors for its IPO. Representatives have expressed confidence that the social network will be able to continue its expansion by integrating media content, providing a platform for mobile advertising, and moving into the app space. The AP-CNBC poll results, though, may cast doubt on the network's future earnings potential, especially when taken into consideration with GM's recent decision to end its paid ad operations on the site.
