Love Advertising

A full-service advertising agency based in Houston, Texas

Tuesday, June 5th, 2012

By Love Advertising

Design, Love Advertising

One more opinion on Facebook

In the last month, Facebook has ridden what could be described as one really big wave. From a crest of a pre-IPO $100 billion (with a “B”) valuation to GM announcing that they are pulling their paid advertising off Facebook, there is enough space in between for 77,000,000 opinions on the social platform. I’d like to make it one more.

Facebook has the opportunity to be the dominant form of advertising in the world. With a massive installed base of active users, they have the opportunity to own “word of mouth” like no-one ever has. Sponsored stories may be it, but it needs to be easier to execute for companies, agencies and even individuals. I think of Facebook as a great American company. They need to find their “AdWords” – the golden advertiser ecosystem that Google used to monetize their user base. I think they find it.

Despite my upbeat attitude on the company, I do see some headwinds. The first is privacy creep. (That’s creep as in slow-moving, BTW). It’s my personal belief that privacy infringement and user-pullback from internet media is the major threat to the internet as we know it today. Platforms like Google, Facebook, Twitter, etc. are slowly making us all more comfortable with sharing more and more information. Maybe it’s a good thing, maybe it’s a bad thing. I’m not sure. However, Facebook does have the record of going over the line and retreating (see Beacon). Incidents like this can kick out a leg of their stool really quickly.

Another major headwind right now is their flailing stock price. Although they generated almost half-a-billion of free cash flow last year, the European situation had not come to as much of a head. Why is a European recession an issue now? Maybe because 70% of Facebook’s users are not in America! I only mention this because despite Zuck’s laser-like focus, his now-public company is opened up to a lot of attention, and it is really easy for the average American user to see a depressed stock price and headlines like we see today and get the wrong idea about a company.

Finally, the ad formats are an issue. If I had to bet, I’d say that a major factor for GM’s pullout was the lack of quality ad formats. With a lot of on-page distractions, 115 total characters and an image smaller than my thumb is not the best canvas you can find. We, advertisers, need a richer format option. Larger compelling images may be a great opportunity (think strong visual print campaigns in the form of a timeline photo).

I’ll admit it. I’m a Facebook fan. As an advertiser, I’m excited about what it offers today and what it could potentially offer down the road. Right now, ask two people what they think of “FB,” and you’ll get three opinions. So, does the world need one more opinion on Facebook? I guess it depends if you like it or not.

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