This was a huge week for Facebook — or should we say NASDAQ: FB? As Zuckerberg rang the opening bell from Facebook’s headquarters this morning, we couldn’t help but wonder what the Facebook IPO will mean for marketers.
And we’re not alone.
The entire week leading up to the “bell heard ‘round the world” was rife with people contemplating the future of Facebook post-IPO, and its affect on brands. After all, people aren’t just investing in a social network – they’re also investing in an advertising company. And not everyone is convinced that Facebook ads work.
Enter the second biggest piece of Facebook news to hit this week: GM’s decision to pull its $10 million ad budget.
If one of the biggest brands in the world doesn’t see value in Facebook marketing, does it really exist?
“The answer may come down to what companies want out of social networking sites such as Facebook: immediate clicks on ads, or the potential for brand-loyalty building,” wrote MSNBC [See "Facebook’s Marketing Payoff: Reality or Fantasy?"].
The article goes on to quote Rex Briggs, CEO of Marketing Evolution, Inc., who thinks “GM is making a mistake, and it’s probably because they don’t have the right analytics in place and are too obsessed about short-term sales effects.”
Briggs stressed that GM “is living in the past if it expects quick returns similar to the results from television ads or rebate promotions. Social media just doesn’t work like that.”
Other major brands such as Ford, Nike, Nordstrom, Macy’s and Wal-Mart all said they will continue advertising on Facebook, saying the true ROI is brand penetration, not sales. [Although it’s important to note that Ford said 60% of people who “like” Ford on Facebook wind up shopping for Fords (Read: “How powerful is a Facebook “Like” for advertisers?” – CBS News).]
“The beauty of Facebook — and Facebook marketing — is the social aspect of it all,” writes Tony Bradley, PCWorld. “Facebook is about word-of-mouth. The value of marketing on a social network is the sharing between friends and family…. That type of interaction is less likely for big-ticket items like cars, but it’s a gold mine for small businesses that can’t afford Super Bowl ads.”
Bradley continues, “Larger companies like General Motors, or Coca Cola, or McDonald’s can still benefit from marketing on Facebook or other social networks, but it should probably be viewed from the context of brand penetration and recognition as opposed to trying to measure sales resulting directly from the ads. Smaller businesses, on the other hand, can hit the jackpot with the right Facebook marketing campaign, and word-of-mouth advertising of the social network.”
Here’s what other experts were saying about the subject this week, plus our picks for the top Facebook news bytes of the week.
5 Ways Facebook’s IPO Affects Brands, Mashable
Facebook expects to raise as much as $16 billion through its IPO, securing its title as the largest tech IPO in history. Naturally, consumers are questioning whether they should buy shares and financial analysts are in a tizzy evaluating the company’s worth — likely valued at more than $100 billion.
But the real $100-billion question is this: What does Facebook going public mean for brands? Here’s the answer. Read more>>
More Facebook IPO News This Week:
Will the Facebook IPO Ruin Facebook?, The Wall Street Journal Blog
Post IPO, Facebook Credits Are About to Grow Up…. Fast, TechCrunch
Facebook Marketing News – Best of the Week
Companies Ask: Does Advertising on Facebook Pay?, Yahoo! News
Facebook Sponsored Ads – 44% of People Say They Would “Never” Click on Them, Study by Greenlight
Facebook Marketing Best Practices
5 Promotional Hot Spots Every Facebook Business Page Can Use, Cindy Ratzlaff, blog
New Facebook Features
Will Facebook Adapt to Mobile or Will Mobile Adapt to Facebook?, BusinessWeek.com
Standalone Mobile App for Facebook Page Management Coming Soon, Inside Facebook
As It’s Users Switch to Mobile, Facebook Scrambles to Find New Revenue Sources, Social Media Today
Facebook Tweaks News Feed for Mobile, Mobile Marketing Watch
Facebook Testing a Feature that Charges You to Send Messages to Friends, Business Insider
Facebook Eyes Google’s Pie, Greg Harned, Mambo Media