Facebook's Poor Decision To Postpone Revenue

How on earth is Facebook going to make billions of dollars? That's the question that many Facebook skeptics have and it's one of the reasons behind Facebook's current valuation of $3 billion. The company has been focused on breaking even since early on and now years later they are still operating near a break-even point even though many are questioning the impact of the company's growing server costs. Sheryl Sandberg, Facebook's Chief Operating Officer, recently told Bloomberg in response to a question about fundraising, "We could not be doing better financially. We absolutely do not need to take money. We might take money -- but it doesn't mean we need to." That's great to hear Sheryl but that doesn't mean you should turn away substantial revenue opportunities. Facebook Needs An Ad System Upgrade After spending no less than $1,000 on Facebook I'm getting frustrated with the system. The company tells me to use Facebook ads to promote my public profile but they won't give me any metrics about how well my advertisements are converting. If Facebook provided ad to new fan conversion metrics, I could improve my expenditure on Facebook and not just toss money down the toilet, not knowing which ads are working and which aren't. For those companies that are looking for advice on Facebook advertising, I have to give them complex answers about optimizing their campaigns. Should a company promote their public profile, or should they just redirect users to a landing page on their existing site? While Facebook has a solid basis for arguing for promoting public profiles (Facebook users are more likely to convert into new fans), there's no quantitative data for advertisers. Google Was Built On Metrics Google had a large number of companies built off of their ad platform. Whether it was the affiliate marketers (which are beginning to turn to Facebook), the companies looking for arbitrage opportunities, or the large ad buyers, all of the companies had the ability to track their ads. It should be noted that the vast majority of Google's advertisements drive people to external sites, not to Google. Facebook however has advertisers that are purchasing ads that also boost Facebook's page impressions. Yes, I'm paying money to help Facebook generate more impressions! The least the company could do is provide advertisers some sort of method for tracking conversions. Right now there's no way to track most of the actions that take place on Facebook and hence Facebook advertising can quickly become a black hole. Facebook's Ad Manager Interface Needs Improvements Want to build a business helping others manage their Facebook advertising? Good luck! I have around 30 campaigns on Facebook and just those are unmanageable. I've recently reduced my ad spend because I couldn't track conversions and the process of reducing my spending was cumbersome. Google has at least figured out how to provide customers with checkboxes to adjust multiple campaigns at once. Needles to say, there are some changes that need to be made with Facebook's ad manager and I'm sure that I'm not the first to makes suggestions. No, Facebook's advertising system is not the end of the world and honestly, I've gained a lot of value from using it. Honestly though, the company should be able to make minor adjustments to improve the general user experience. In the same time that the company has changed the web site layout three times, the ad manager design has bareley changed. Why Leave Money On The Table? Facebook doesn't need to make changes to their ad manager but when your customer base is small businesses that are trying to get new clients, why wouldn't you assist them in saving every dollar they can. By providing more effective metrics, especially within public profiles, Facebook could generate substantially more revenue. A slight improvement of the ad manager would also make many of our lives a lot better. While the company may not "need to take money", it wouldn't hurt the company to work a little at improving the experience for those that are willing to hand it over to them.

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Facebook's Poor Decision To Postpone Revenue

Nick O'Neill

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Nick O'Neill