The Facebook ad bashing continues. The social network is taking another hit regarding its advertising value, and this time it's from the head of the world's largest marketing group.
WPP CEO Sir Martin Sorrell said he has told Facebook that the social network is great for branding, but not advertising, the MediaGuardian reported today. The statement is another blow to Facebook's efforts to increase its advertising dollars, particularly because the money WPP spends on behalf of its clients accounts for nearly a third of the money spent annually through ad agencies worldwide. Sorrell made the remarks at the Cannes International Festival of Creativity.
Despite his skepticism, Facebook will enjoy a healthy bump in advertising spend from WPP. The firm spent about $200 million on Facebook last year, which accounts for about 5 percent of Facebook's estimated total revenues, and plans on twice as much this year. Sorrell did add that he believed Facebook would endure in the long run.
Still, that's a drop in the bucket when compared with Google. WPP plans to spend $1.6 billion to $2 billion on Google advertising this year.
While Facebook can get people to use its site, it has had difficulty generating revenue from the traffic, particularly in the mobile realm.
Just when Facebook may have earned back the favor of General Motors -- the company pulled $10 million in advertising earlier this year but is now rumored to be friendly with Facebook again -- Sorrell's comments pack a punch to the social network's recent efforts.