I completely agree with you. The argument that you should be able to charge 10x as much to target the 1/10th that is your most likely customer falls apart when you are advertising in a place where people generally don't want to think about buying stuff. People kill time, make plans, and stalk friends on FB; they don't go there to shop.
Somebody correct me if I'm wrong, but I've generally heard that CTR on FB ads is terrible. According to the logic above you should be getting 10x as many clicks because you are paying 10x as much, but advertisers aren't seeing anywhere near this ROI.
It's like a bunch of salespeople coming to a party that's been running for 10 years and trying to push sales onto people; sure, you might hook a few, but people are there to party and not to spend money on your junk.
The only way I can see them leveraging what they have a real advantage in, is by using the social graph to promote products to people's friends. That's kind of what Yelp does; you're more likely to spend money on things/places your friends recommend. The problem is that FB has done this before, it was called Beacon, and it was creepy. They are late to the game with Places, and they are getting so much cash from corporations for sponsored Pages that I don't think anybody uses them to judge actual value of a product.
Somebody correct me if I'm wrong, but I've generally heard that CTR on FB ads is terrible. According to the logic above you should be getting 10x as many clicks because you are paying 10x as much, but advertisers aren't seeing anywhere near this ROI.
It's like a bunch of salespeople coming to a party that's been running for 10 years and trying to push sales onto people; sure, you might hook a few, but people are there to party and not to spend money on your junk.
The only way I can see them leveraging what they have a real advantage in, is by using the social graph to promote products to people's friends. That's kind of what Yelp does; you're more likely to spend money on things/places your friends recommend. The problem is that FB has done this before, it was called Beacon, and it was creepy. They are late to the game with Places, and they are getting so much cash from corporations for sponsored Pages that I don't think anybody uses them to judge actual value of a product.