It sent some major ripples through the media world this week. It also overshadowed Facebook’s imminent IPO, going public with a valuation far above almost all other corporations.
Immediately, some questioned whether this means that Facebook will cease to be a viable business. I heard some others insist that they knew that Facebook was a flash in the pan, and this just proved them right.
“There is always an easy solution to every human problem — neat, plausible, and wrong.” A high-profile content provider from the last century, journalist, editor and essayist H. L. Mencken, once said that. If you’ve been in the media for any length of time, you know that most of the black-and-white statements about us that get uttered are neat, plausible and wrong.
I suspect it’s entirely possible that Facebook has been overvalued, but the market should set that straight … eventually, if not on the day the stock is issued. It’s also entirely possible that someday, some other site will eclipse Facebook, as Facebook eclipsed MySpace. There’s a reason why almost every Silicon Valley CEO is a hot paranoid mess. Stuff happens in that field so fast and dramatically, you just have no idea what the future really holds … and you are building both your hopes and your fears on that double-edged sword.
I have a little experience with the folks who sell Facebook ads. I haven’t actually run any ad schedules on Facebook. However, I’ve talked with Facebook account reps about advertising, and been in on a couple of seminars they’ve offered. I came away with the feeling that they:
- were very enamored with their own product;
- wanted to point out all the cool things they could do to engage people, rather than consider what my goals might be; and
- were offering customer service that was as bare-bones as it gets.
No media brand … digital, broadcast, print, whatever … is going to make a ton of money selling like that. I know radio sales people who bust their humps every day to appear as trustworthy marketing experts rather than just spot-schleppers. Facebook does know a lot about what causes people to engage with the content on their site, and a lot of the changes they’ve made over the last several months reflect that. However, if you run a business page on Facebook, I hope you realized pretty quickly that their engagement metrics may or may not have anything to do with your own business goals.
For instance, I have a Chris Miller Digital page on Facebook. I don’t have much engagement by Facebook’s standards. I know that, when someone wants to have a conversation with me, they generally don’t want anyone else to know what they’re talking with me about. Most of the content on both this site and on my Facebook page is designed to help me start conversations on the phone or in email with people. So, what Facebook says about my Chris Miller Digital engagement level means nothing to me.
When someone advertises on Facebook … or anywhere, for that matter … their business goals don’t change. Content marketing is an exciting outgrowth of this new digital era. However, I am certain that General Motors’ needs don’t neatly fit with Facebook’s image of how advertising exists as content on their site. GM wants to ultimately move some cars, not just engage with fans.
As part of taking their company public, Facebook was required to list “risk factors” that could “materially and adversely affect” them in the future. Here’s what strikes me about their list: there’s lots about the Facebook product, future acquisitions, the consequences of government actions and their equity situation, but there’s only the sketchiest thoughts about revenue. There’s only one mention of advertisers. Can you imagine another huge media operation going through this process and identifying only one vague item about “losing advertisers?”
They seem very focused on not being “MySpaced” by some future social site. Meanwhile, it should be interesting to see if Facebook figures this whole wacky advertising revenue thing out. What will it will take … will they need to bring in revenue brains from outside the company, and lose some of the integrity of their product?
What do you think? Feel free to comment below, or on the Chris Miller Digital Facebook page.