Facebook and Advertising

For all its phenomenal growth (since its inception) Facebook has lagged in one critical area: ad impact. A few weeks ago we pointed out that ads on social networks get very low CPMs as compared with other categories. Goldman Sachs just released a study that seems to show why that's the case.

Last month GS asked consumers to rank the importance of various types of sites in influencing their shopping habits. Just 5% of respondents ranked social networks at the top. The data shows that search engines and recommendation sites have a much stronger impact on consumer shopping choices than social networks do.