Facebook Is Eating Its Own Tail
Monday, January 11, 2010
Facebook is earning most of its money these days by selling huge advertising deals (hundreds or millions of dollars) with major brands who are looking to connect with their fans. Facebook offers advertisers a suite of different types of advertising that in one way or another help the advertiser to recruit new members for the brand's Facebook Fan Page.
But, from the brand's perspective, isn't the point of collecting fans on your Facebook Fan Page that the brand gains the ability to communicate directly with people who are interested in the brand, its products and services, without having to buy advertising?
Seems to me Facebook is currently putting most of their business development effort into selling a product that is destined to make itself obsolete.
Is this all part of Zuckerberg's grand plan?
The more I speak to clients and colleagues about what Facebook has to offer, the more I hear research and insights.
Facebook is currently sitting on world's largest research panel ever assembled. It just hasn't been called that, yet. This is ultimately where I see the big bucks coming from.
But, from the brand's perspective, isn't the point of collecting fans on your Facebook Fan Page that the brand gains the ability to communicate directly with people who are interested in the brand, its products and services, without having to buy advertising?
Seems to me Facebook is currently putting most of their business development effort into selling a product that is destined to make itself obsolete.
Is this all part of Zuckerberg's grand plan?
The more I speak to clients and colleagues about what Facebook has to offer, the more I hear research and insights.
Facebook is currently sitting on world's largest research panel ever assembled. It just hasn't been called that, yet. This is ultimately where I see the big bucks coming from.
2 Comments:
On some level I'd like to think that Facebook has more of a grand plan beyond targeted, but more or less useless PPC ads. It seems like the people in charge there understand that connecting, not advertising or searching, is why people use their site.
However, in the near term, generating some positive cash flow is crucial. If the money they're making from their PPC campaigns is enough to buoy them while they continue to turn Facebook into more of an ecosystem, I can understand the play there.
Good stuff, as always.
Excellent point Mike. By making it more difficult for smaller companies to grow their Fan pages it gives the impression, accurate or not, that Facebook is only interested in big advertisers and not John Q. User.
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