Facebook banner ads a waste of money?

I joined Gyro International more than 6 months ago now, which puts me (still in the digital sense) into the advertising and marketing sector.

So, to stick to the theme I thought I'd write my first blog in a very long time on the pros and cons of banner advertising using social media platforms. I'm a regular user of facebook and I rarely even notice the advertising that is displayed there, but then I'm just one user out of 130million.

Looking at just banner advertising on facebook (not 'fan' pages which is another subject altogether), there are some obvious pro's and con's:

Positives

• Increased brand awareness
• Audience targeting / segmentation by age, sex, likes, dislikes, geographical location etc
• 130 million active facebook users

Negatives

• Difficult to measure ROI (especially when it comes to brand awareness)
• Banner ads are not conversational
• Weak track record
  

Banner ads are enforced, not requested, whereas social networks are about conversations and personal preferences. Therefore perhaps Facebook is not really an appropriate medium for this type of advertising. I've struggled to find a solid Facebook advertising success story that uses solely the cpc advertising as oppose to other more pricey options like the sponsorship of applications. It almost feels as though Facebook knows that they're onto a losing revenue stream as the latest 'voting' strategy seems to me like they are clutching at straws.

I like the theory: using Facebook you can advertise painkillers to students in the UK aged 20-25 on saturday/sunday mornings. How can it fail? Yet where are the results? And why isn't everyone raving about it online?

2009 is the year for brand engagement with social media. But this won't come about through simple display ads. What's needed is an approach that sees brands listening and responding to what is being said on blogs and social networks. A good design and a wad of cash just won't cut it any more.

Mr. Goldstein of SocialMedia Networks describes a self-perpetuating cycle in social networks: “Advertisers distract users; users ignore advertisers; advertisers distract better; users ignore better.”

I'm inclined to agree.