The Vulnerability Of An Ad-Based Revenue Model

Ad-Based Revenue Models are great…when they work.

But Facebook is finding out at the moment that such models are never guaranteed, especially at a time of crisis like right now.

As companies of all shapes and sizes are looking to save money, social media advertising is one expense many feel they can do without.

Coca-Cola recently announced a 30 day suspension of its social media advertising. They’re saying it’s to reassess their presence on social.

At least partly, it’s seen as sending a message to Facebook that they need to work harder at controlling the negative and discriminatory content featuring on the platform.

This, combined with a number of other companies doing the same, led to Facebook’s share price dropping by 8%, resulting in a $50+ billion drop in market cap.

As many people and business around the world are now looking for new ways to make money, an ad-based content model can seem appealing.

But the current situation with Facebook should be seen as a warning that, in difficult times, there are no easy ways to make money.

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