Despite its hotly anticipated upcoming initial public offering, Facebook has had trouble lately demonstrating how advertising can sustain growth, although it has accounted for 85 percent of the social network’s annual revenue of $4 billion.
In response to an article in The Wall Street Journal on the advertising industry’s profitability question to Facebook, and CNET‘s chime-in that the social network doesn’t return agency calls, ReadWriteWeb weighed in to the debate with intriguing viewpoints from new sources.
Advertisers have long questioned the effectiveness of their campaigns, no matter the medium, and have long sought better ways to track return on investment.
Facebook needs to figure out how to demonstrate ROI, say some, especially now that public shareholders will soon be asking questions and demanding answers.
The question is whether Facebook should care what advertising agencies think or prefer.
Facebook held the Facebook Marketing Conference in New York Feb. 29, aimed at familiarizing agencies with advertising on the social network and new ways to gauge success.
Facebook’s primary aim is to keep its users happy, and not to kowtow to advertising money trees. Often-ignored banner ads show us one method of grabbing consumers’ attention that doesn’t work (when is the last time you clicked on an ad — and meant to?). Interfere with content too much, and readers notice, but not in the click-on-me way advertisers would like.
Spruce Media Chief Operating Officer Lucy Jacobs told ReadWriteWeb:
Agencies are used to conversions and clicks, not social sharing and people talking about this as metrics of success. Facebook continues to hold the lines that brands can’t think of Facebook as a channel you can add on to your ad spend.
But that’s where they’re likely very wrong. The largest social network doesn’t take orders. It gives them, often changing up functions and features, many of which are silently introduced as opt-out and quickly adjusted to by users who still would rather play by their rules than vacate the field.
What faces the advertising industry is akin to what faces marketing, publishing. and other industries. The traditional expect the newbies to build according to their longstanding models. But the newbies seek to redefine, reconstruct, and turn everything on its head.
Unlike Twitter and Google, Facebook chose the more laissez-faire approach by producing application-programming interfaces that advertisers could build tools onto.
That means, in short, don’t expect customer service, agencies. At least not if things remain as they are.
Image courtesy of Shutterstock.