Now that Facebook has gone public, it matters whether or not
Facebook can make money from advertisements. Did you notice that it didn’t
matter before? We all happily signed up (because it was free) and we have been
using this service (without paying a cent) to re-connect with old friends, make
new connections, stay in touch with family members and share our lives. What is Facebook worth to you today?
For the average user, Facebook is a social platform. How
will Facebook successfully help advertisers get customers to click on an ad
while they are on a site where their main goal is socializing? It doesn’t seem
like a co-incidence that GM would publicly announce that they were pulling
their advertising from Facebook the week that Facebook was to go public. At the
last LinkedOC meeting, one of the panelists offered this viewpoint on the
situation: Why would GM make this announcement publicly? Why would GM make an
enemy of Facebook? If Ford is smart, they will make the most of this
opportunity to create headlines by working strategically with Facebook over the
next year.
Think about how you research products online. If you search
for something on Google, do you purposely avoid the ads on the top and the
side? Are you skipping down to what we call “organic” search results? Now,
think about word of mouth. Are you more likely to buy something that a friend
recommends? That is the basis of Facebook’s “like” feature. That is why Google
created Google+, so they could start integrating the social recommendation
feature.
If a company sets up a business page, and can get people to share
the content that company posts, then those people are seen as advocating for
the brand. Business wants to see direct ROI, however. Now that Facebook has
gone public, the conversation is only focused on whether or not people will
click on the ads because that is the most obvious way for Facebook to make
money and for advertisers to prove ROI. I predict that there are still creative
ways for companies to get ROI using a combination of advertising and “organic”
content. As companies continue to use traditional marketing rules to make money
online, they will find that companies using more creative (social) means will
be more successful.
Facebook’s advantage over Google is the demographic data
they have collected on you. Most people are nervous about that, but they use it
so that advertisers can make their ads visible to the demographic they are
targeting. However, Google tracks what you click and search for on the internet
so they can target advertisements around things it thinks you want to buy.
Either way, I am happy that the sites I use know what I am looking for and
suggest good products or prices (sales) that I might be interested in.
The question is whether or not you will click on an
advertisement on the internet if you had a different purpose for being on that
page to begin with. Do you appreciate these sites making it easier to find
products and services that you might be interested in? Or are you concerned
that it is an invasion of your privacy?
