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Is Facebook’s Future Bright or Dismal?
Despite the beating Facebook’s stock has taken recently, many people see plenty of opportunity in the company’s future. Mark Cooper, the co-founder and CMO of Offerpop says, “I believe Facebook is in a great position to reshape the digital marketing landscape, and we’ve only seen the beginning of what that might mean. Ultimately, it comes down to leveraging the power of social recommendations to increase customer conversions. In our experience, brands that run ongoing, programmatic campaigns that keep their fans active are able to tap directly into Facebook’s ability to drive word-of-mouth, and are seeing great ROI as a result. As Facebook continues to optimize their offerings, they’ll become a key revenue driver for brands everywhere.”
Yet it is safe to say that Facebook’s future looks challenging, to say the least. Sure, the company is full of bright people who can, and want to, be a success but they have to find a way to make mobile count. Count on Facebook to attempt to monetize user data in a big way (I’m glad I’m not on the site). Investors have already beaten Facebook’s newly public stock down, but can Zuck and company turn it around? That’s what I asked a few smart people who know a thing or two about Facebook. Here’s what they had to say.
Facebook’s Dominance Not Immediately Threatened
Contributed by: Justin Oh, Senior Digital Strategist at 22squared
Facebook stated in its second quarter results that 543 million of its monthly active users access the site from mobile devices, a 67% year-over-year increase. The transition of its active user base to mobile devices, along with the deceleration of overall growth describes just how important it is for Facebook to get mobile right. I don’t think there is an immediate threat to Facebook’s place as the de-facto social platform, but the significance of the current mobile dilemma it faces cannot be understated.
Facebook’s current mobile strategy, which hedges against both native and HTML5 platforms, has contributed to a fairly poor mobile experience compared to competitive mobile products such as Path or even Google+. I’d like to think that Facebook is still agile and nimble enough to iterate its way to mobile success, but up to this point, aside from spending $1 billion, Facebook has done little to demonstrate that it can create unique, compelling experiences in mobile. I believe that if Facebook doesn’t nail down a compelling mobile experience, it will be extremely difficult to monetize its mobile audience in a scalable, sustainable manner.
Ad Products Can’t Mar the User Experience
Contributed by: Rebecca Lieb, advertising and media analyst at Altimeter Group
Facebook is clearly not a fad. With just under a billion users, it is the biggest media property in history, far exceeding the reach of any print or broadcast entity. Whether its future is bright or not depends on Facebook’s ability to develop successful marketing and advertising products that are effective for brands, but do not mar the user experience. This includes, of course, effectively using user data and monetizing mobile platforms. The company has developed some initial advertising products that show promise, but more trials and data are needed. Additionally, brands are in the first, tentative stages of learning how to market in social media channels. It’s a process on both sides of the equation.
Facebook Ads Aren’t Worth the Investment
Facebook has a rocky future ahead. Their success depends upon whether they can find a useful application for the untapped gold mine of social data they possess. So far, their advertising has not been cutting it: in my personal experience with a few hundred clients, their ads do not perform and aren’t worth the investment. It seems that all the hype about Facebook has convinced small businesses that interrupting people with ads when they are socializing is a good idea. In fact, it can only work for local businesses, games, and entertainment. The future of Facebook lies in the hands of its youthful Board of Directors, who may have to take a break from blazing new trails and do one of the following: a) partner with Google to create a real social search experience; b) help similar people to find each other by connecting people based on their key interests; c) recommend products by perfecting a Pandora-like discovery engine. Expect to see the last suggestion in the next 2 years. The first and second will require some deeply-entrenched philosophies to shift.
Facebook Will Be Challenged in Mobile
Contributed by: David Reeves, VP and Director of Creative Innovation at 22squared
Does Facebook have a bright or dismal future ahead? Facebook certainly has the potential for a great future. They understand behaviors and motivations better than most; and as a result, they’ve been able to influence online behaviors in some amazing ways. It’s an organization that isn’t very risk-averse, either; they don’t fear change. That is the perfect recipe for innovation. If they stay true to those values, I don’t see an end in sight for them.
Can it make ads work on mobile devices? They will have to, or they will cease to be relevant. Facebook – and everyone else, by the way – has to completely rethink how mobile ads work. What worked in digital over the past 10 years isn’t working. (Ask Google.) If they’re going to “make ads work,” then they have to put a tremendous amount of thought into context and relevancy and how that’s different for mobile users. What is valuable on the desktop isn’t necessarily valuable when mobile.
Will it be able to successfully monetize user data? They already have, but they’ve only scratched the surface.
In short, is Facebook ultimately a fad or a permanent fixture? That depends on what they do with mobile. Certainly what they’ve started is a permanent fixture. If Facebook is to be challenged any time soon, its challenger will be born in mobile.