READ THIS ON YAHOO!
"Buy Facebook," brokers cried. Wall Street experts and talking heads touted the mega million dollar to be the hottest IPO since Google. And people everywhere bought into it by the thousands, save yours truly. I was one of the few who didn't buy into the hype. I had a feeling that Facebook stocks weren't going skyrocket as predicted. I hedged my bets and avoided adding this volatile IPO to my portfolio for three very compelling reasons.
Reason No. 1: GM Pulled Out
On May 15, one of Facebook's largest spenders, General Motors pulled their ad campaign. This set off warning bells in my head. It was a telltale sign of things to come. For me, GM's flight was a clear signal that Facebook wasn't doing so hot in the advertising department. This lead me to dig a little deeper.
Reason No. 2: Advertising Dollars
I began looking at how advertising dollars are spent among other pixelated social giants. I found that Pinterest, a relatively new kid on the social media block, seems to be getting the largest share of the advertising effectiveness pie.
In a recent student conducted by Bottica.com, traffic originating from Pinterest usually netted the vendor a $180 average sale, compared to Facebook users $85 dollar average sale. To add insult to blue and white injury, Pinterest influenced three percent more of transactions than Facebook did during the study. While this doesn't mean Facebook is dead, it's advertising dollars might be on life support sooner, rather than later.
Reason No. 3: Dying Out
While Facebook is by no means a dead technology (not with over 5 billion daily users anyway), the novelty has worn off, and the honeymoon period subsided. Users might not be going anywhere else to spend hours of their time, but it is clear that they are going else where to spend loads of their money. And I don't have to tell you that money does the talking in corporate America.
Unless Zuckerberg and company can pull Facebook out of its advertising slump -- and there are plans to make ads part of your newsfeed now -- it is likely that the tech giant will lose more advertisers, more worth and that Facebook stocks will remain pancaked.
Picking Stocks
In the spirit of honesty, picking the right stock is always a crapshoot for me. However, I don't rely on my advisor or my broker to tell me what's hot and what to buy, I do my own research ahead of time. I follow that company in the news before I pull the trigger on a stock purchase, and my due diligence on this one just saved me over $200 in lost revenue - when thinking about how much I would have bought.
When I buy stocks, I buy into the brand and not the hype. So far, that method has never steered me wrong.
More from this contributor:
From $45,000 in Debt to a Cash-Only Life
I'm Making Money (And Credit) a Family Affair
5 Ways That Low Interest Rates Benefit Average Americans
"Buy Facebook," brokers cried. Wall Street experts and talking heads touted the mega million dollar to be the hottest IPO since Google. And people everywhere bought into it by the thousands, save yours truly. I was one of the few who didn't buy into the hype. I had a feeling that Facebook stocks weren't going skyrocket as predicted. I hedged my bets and avoided adding this volatile IPO to my portfolio for three very compelling reasons.
Reason No. 1: GM Pulled Out
On May 15, one of Facebook's largest spenders, General Motors pulled their ad campaign. This set off warning bells in my head. It was a telltale sign of things to come. For me, GM's flight was a clear signal that Facebook wasn't doing so hot in the advertising department. This lead me to dig a little deeper.
Reason No. 2: Advertising Dollars
I began looking at how advertising dollars are spent among other pixelated social giants. I found that Pinterest, a relatively new kid on the social media block, seems to be getting the largest share of the advertising effectiveness pie.
In a recent student conducted by Bottica.com, traffic originating from Pinterest usually netted the vendor a $180 average sale, compared to Facebook users $85 dollar average sale. To add insult to blue and white injury, Pinterest influenced three percent more of transactions than Facebook did during the study. While this doesn't mean Facebook is dead, it's advertising dollars might be on life support sooner, rather than later.
Reason No. 3: Dying Out
While Facebook is by no means a dead technology (not with over 5 billion daily users anyway), the novelty has worn off, and the honeymoon period subsided. Users might not be going anywhere else to spend hours of their time, but it is clear that they are going else where to spend loads of their money. And I don't have to tell you that money does the talking in corporate America.
Unless Zuckerberg and company can pull Facebook out of its advertising slump -- and there are plans to make ads part of your newsfeed now -- it is likely that the tech giant will lose more advertisers, more worth and that Facebook stocks will remain pancaked.
Picking Stocks
In the spirit of honesty, picking the right stock is always a crapshoot for me. However, I don't rely on my advisor or my broker to tell me what's hot and what to buy, I do my own research ahead of time. I follow that company in the news before I pull the trigger on a stock purchase, and my due diligence on this one just saved me over $200 in lost revenue - when thinking about how much I would have bought.
When I buy stocks, I buy into the brand and not the hype. So far, that method has never steered me wrong.
More from this contributor:
From $45,000 in Debt to a Cash-Only Life
I'm Making Money (And Credit) a Family Affair
5 Ways That Low Interest Rates Benefit Average Americans
0 comments:
Post a Comment