Brands Focusing Solely On Facebook Are Destined To Lose

by · May 7, 201227 comments

Brands shifting all or most of their digital marketing and social media marketing efforts to Facebook are going to lose and perhaps big. Yes, there are 900 million users there. Yes, the IPO is coming and an influx of cash and becoming a publicly traded company will bring with it many benefits that will strengthen what Facebook is. Yes, Facebook will continue to be an ever-present social utility for years to come.

But there are more concerns than cocktail parties on the horizon for the behemoth, I’m afraid. And those concerns directly effect brands investing their time, attention and dollars in Facebook. The problem is now that Facebook must make money to sustain its investor’s satisfaction, it must rely on its only scalable and reliable business model: That of a media property where brands want to advertise.

Image representing Facebook as depicted in Cru...

Image via CrunchBase

Rebecca Greenfield’s piece for The Atlantic spells it out pretty nicely. She writes that there are two kinds of Facebook advertisers: the ones that want metrics and the ones that want attention. The problem for both is that Facebook’s Zuckerberg-inspired ethos doesn’t care if either gets what they want.

Facebook has built a 900-million person gorilla, so they know advertisers will flock to them. Marketers always want a piece of the action when eyeballs are involved. But Zuckerberg’s philosophy is that advertising should be more organic, relevant and unobtrusive. Their new advertising options herd marketers to buy sponsored stories and softer appeal opportunities. While one could argue this might be a better way to get in front of people’s attention, it’s also less definitive on value.

Facebook wants advertisers to share good content, not good deals and discounts. Advertisers are generally very bad at content and just want to plaster coupons all over the network. Even if advertisers were good at content, the audience-centric nature of good content means there are fewer calls-to-action, fewer direct benefits to the company and, thus, metrics that leave a lot to be desired compared to what companies have seen in other mediums in the past.

The other type of advertiser Greenfield outlines — the one that wants attention — is just S.O.L. Facebook is so big and funded and ready to cash in on the next week’s big IPO, they don’t care to answer the phone. If you’re not already in touch with an ad rep there, good luck finding one. They don’t need you right now.

But that attitude is going to befell them soon.

With organic content not delivering the metrics brands want, the ones that are paying now will stop. With Facebook acting as if they don’t need to be responsive to those calling wanting to place media buys, the ones not advertising now won’t likely want to much longer. Sure, 900 million people can’t be wrong and someone will throw their money at Facebook once given the opportunity, but it’s not a long-term, sustainable way of doing business.

Facebook’s users, meanwhile, are generally averse to advertising, like they are everywhere else. Facebook ad click through averages are half of typical online advertising and less than 25% of what most SEO experts would recommend as a target for Pay-Per-Click advertising on search engines. The sponsored stories aren’t going to change that much. Zuckerberg will have created a fantastic social network and utility that everyone wants to use, but one that can’t sustain advertising revenue.

The do-advertising-our-way effort won’t work if Facebook cannot either A) Help advertisers see positive metrics and returns on their advertising investment or B) Suck up to anyone willing to spend money with them.

But then there’s the simple fact that people on Facebook are not interested in your ads. They’re not going to be interested in your sponsored stories, either. People don’t go to Facebook to engage with your brand. They go to Facebook to see pictures of their grandchildren, stalk their exes and play Farmville. A select few seek out a higher purpose and participate in groups, have conversations and the like, but advertising is noise among the signal. And Zuckerberg’s ethos won’t change that.

Facebook is a great place for a brand to facilitate customer service, engage customers or prospects in research and development-type conversations and perhaps even share some coupons or discounts from time-to-time. It can be a place where positive, measurable outcomes occur. But that is going to be a challenge for any brand simply because people don’t want to engage with companies, logos or buildings. They want to engage with people.

There are far too many companies putting all their eggs in Zuckerberg’s basket right now. From advertising to building brand pages and running promos, everyone wants a piece of that 900-million-person pie. Never mind that email marketing produces over $40 per dollar spent return on investment. Never mind that a strong corporate blog with keyword-rich posts helps you drive organic search results that send 8-12 times as much traffic as pay-per-click ads. Never mind that mediums like radio and television still produce higher sales and awareness results in shorter times than social media can even hope for.

Marketers are helping Facebook build a modern day Tower of Babel, hoping to touch the face of the revenue gods. And soon, the revenue gods will become angry and everyone, including Facebook, will suffer.

Don’t put all your eggs in that basket.

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About Jason Falls

Jason Falls

Jason Falls is a leading thinker, speaker and strategist in the world of digital marketing and is co-author of two books, No Bullshit Social Media: The All-Business, No-Hype Guide To Social Media Marketing and The Rebel's Guide To Email Marketing. By day, he leads digital strategy for Elasticity, one of the world's most innovative digital marketing and public relations firms. Follow him on Twitter (@JasonFalls).

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Comments on Social Media Explorer are open to anyone. However, I will remove any comment that is disrespectful and not in the spirit of intelligent discourse. You are welcome to leave links to content relevant to the conversation, but I reserve the right to remove it if I don't see the relevancy. Be nice, have fun. Fair?

  • http://nateriggs.com nateriggs

    Really insightful post Jason.  If you’d asked me 12 months ago if Facebook would survive for the long term, I would have been quick to give like 10 reasons why I thought it would stick around. Today, my opinion is starting to shake to the opposite. You hit the head on the nail with all the disconnects between what users want and what brands (and investors) want to see from the network.  I think the beginning of a slow and painful death of Facebook will come by the move toward in-stream ads.  My guy Geoff reminded me that Lycos tried to do mix paid and organic listings in the same stream years ago. Consumers didn’t take to it and it lost market share.  The same may unfortunately be true with things like Reach Generator.  We’ll see…

    • http://socialmediaexplorer.com JasonFalls

      Yep. The fact that most brands still don’t understand the content can’t be crap is going to hurt the return there. Facebook can give them all the opportunity they want, but if they still don’t get audience-centric and engaging, it won’t turn around the metrics they want.

  • bizTag

    Good points made! FB future – look to mobile and wait for something big!

    • http://socialmediaexplorer.com JasonFalls

      Perhaps. ;-)

  • http://www.facebook.com/lesa.seibert Lesa McDavitt Seibert

    Great article Jason and I totally agree.  Your online approach as to be multi-progned and anything you can do to get them to your site and see what your about is what you should be doing.

    • http://socialmediaexplorer.com JasonFalls

      Thanks Lesa!

  • jeffespo

    Nice read Jason. I agree with you and for some reason kept hearing “too big to fail” while reading this. Have you noticed Facebook’s test on blocking ads from domain levels? It could hurt those looking for direct response ads sending off-platform. 

    • http://socialmediaexplorer.com JasonFalls

      Somehow I think off-platform ads are going to be thwarted regularly by Facebook. Yet another performance metric that will not serve brands well.

      • jeffespo

        They won’t it was in their big news at SXSW this year. A pay to play model if you will. Looking at insights just a month in shows the impact of their new algorithm. The blocking ads test was truly interesting as I know there are tons of companies that rely on the DR. 

  • http://ideagirlmedia.com/ Keri at Idea Girl Media

    Jason,

    Mark Schaefer wrote a post a few weeks ago that really serves as the “businessy prelude” to your words here.  It’s just so perfect, I don’t want to say too much and wreck it.
    But you two should talk.

    Nice – I hope people listen.

    See you at SMSS12!

    ~Keri

    • http://socialmediaexplorer.com JasonFalls

      Mark and I talk quite a bit. I don’t recall that specific piece, but I’ll go a lookin’! Thanks!

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  • http://www.automarketingblog.com/ Chris Baccus

    Jason,

    Definitely some great thoughts on the topic both in your article here and the Forbes piece that inspired it. Regarding ads. Ad performance should be measured across all digital (and traditional) media choices. So if Facebook performs well for your marketing, you should look to invest more in that property. If some other site works better, move more dollars there.  Ad effectiveness is going to be driven by what the media buying team is measured on from the client. When done right, it should be a fairly objective consideration.

    Organic content is where the most angst reigns, especially for organizations that focus solely on chasing the total number of fans they can amass.  Several businesses large, medium, and small all worked on attracting “fans” to their pages to essentially build up a community they could continue to message. Sadly quite a few did not understand how few of their messages (posts) actually reached their community.  Fortunately, Facebook was forthright during their fMC conference last February quoting an average of 16% of fans see a brand’s post. This was news to those not paying attention to their metrics.

    So now the mystery of reach is more broadly known and not surprisingly Facebook has a new technology to sell to solve that problem – Reach Generator.

    The power of social media is distribution of content to reach many audiences online, but I couldn’t agree more with your advice to not put all your eggs in one basket.

    Thanks for the perspective and sage advice.

    • http://socialmediaexplorer.com JasonFalls

      Thanks for the perspective, Chris. I’d be interested to hear more about how the Reach Generator works and, more importantly, if most brands understand that crappy content in front of more people still won’t deliver the bump they’re looking for! ;-) In fact, my biggest piece of advice to brands and businesses for improved Facebook metrics is still going to be improving the quality of their content. You get that. I wish others did.

  • http://tribalstylemarketing.com/blog TribalStyleMarketing

    I couldn’t agree more though, because it’s what so many have been saying…people don’t go to FB for you, they go for them.  I tell clients all the time, “if you’re not going to have an engaged group, do customer service, or pump out *awesome* content, then I would not recommend that you put a Biz page up there.”  You should see the look on their face after that…pricele$$.

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  • Andreas Duess

    “Nobody reads ads. People read what interests them. Sometimes it’s an ad.”

    Howard Gossage’s wise words are as true today as they were all these decades ago. However, and depressingly so, it seems to me that it is not only many brands that do not understand the importance of content, it is also many agencies.

    The truth is that the production of great content is hard work. You’ve got to stand fr something. You’ve got to believe in something. You’ve got to put your customer’s interest and welfare above your own.

    All traits that don’t always come naturally to people raised in traditional marketing environments.

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  • http://www.facebook.com/BrianLeCount Brian LeCount

    Great post!

    Here’s the Mark Schaefer article that I believe Keri was referencing.

    http://www.businessesgrow.com/2012/04/10/why-facebook-will-become-the-most-dangerous-company-on-earth/

  • Patrick Garmoe

    I generally agree with what you are saying here Jason, but honestly I don’t get why everyone says “People don’t come to Facebook for advertising!” Of course they don’t come for advertising. But that’s true for every platform. Who turns on the television for the ads, outside of the Superbowl?

    If what your saying is true (and click-through rates are miserable no doubt) won’t Zuckerburg simply create bigger, more intrusive advertising? Advertising content is fairly lame on every platform. I don’t see in the long run why over time Facebook can’t simply keep making the ads more and more intrusive, which theoretically will help boost click-throughs. Currently is fairly easy to ignore advertising on the platform entirely, because it is so unobtrusive.

    • http://socialmediaexplorer.com JasonFalls

      Fair points, certainly, Patrick. But here’s the problem – with no one clicking on ads now, advertisers will wane. With ads becoming more obtrusive, users will. It’s a sliding scale and Facebook’s attitude toward trying to change the way advertisers behave or the content they provide is destined to get them in more trouble than change the world.

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  • Ozio Media

    Advertising on Facebook may be more about raising brand awareness than it is about directly generating sales. Users don’t particularly like the advertising component, but they do understand why it has to be there. Advertisers that understand this will use Facebook in productive ways, understanding that it has just as many limitations as it has potential benefits.

  • http://twitter.com/JerryIronic Jerry Bates

    Thanks for a great article; I happen to agree wholeheartedly that “…people [on Facebook] don’t want to engage with companies, logos or buildings. They want to engage with people.” and the most successful brands on FB today *get* this important principal.

    I think that once Zuckerberg & Co. finally make that important mental switch from “user value” to “shareholder value” all bets are off on the future of Facebook….

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  • http://profile.yahoo.com/FSRJODMJXCJH3PPDO2B45THHUU AddMe

    I respect the main vision of this topic, so make all your plans for your website, not for FB