The Hard Truth about Facebook: Why the Facebook IPO looks like a Bad Investment

  • Facebook Does Not Produce any Content
  • Facebook May be Maxed Out!
  • Facebook Lacks Innovation
  • Facebook Does Not Replace a Conversation!

Facebook DOES NOT Produce Any Content!

We have been told time and time again, “Content is King”. As an avid digital user, I have found this to be absolutely true. You may be hard pressed to find many who disagree. If this holds true, then Facebook is the biggest flakey investment you can make, in fact, it shouldn’t even survive much longer.

Facebook capitalized on technology – it was a place for people to come to connect and learn. This was at a time when content was still struggling to make its way to digital avenues. In fact, iTunes was in its infancy and did not even hit the top spot until 2008. This gave Facebook the edge as The Place to interact and learn. Think about content producers like the NY Times, they too, were late to the digital era.

What is Facebook and how does it generate revenue?

Users that create content! Every time you participate in Facebook you give them content. This was a fair tradeoff in 2008, perhaps even in 2011, but times are changing. If 2012 is the year of content, then Facebook may be in trouble. While there is likely not going to be a wild withdraw from Facebook at this moment, trust me when I say content providers are starting to see the value in limiting their content and perhaps even withdrawing future content from social sites like Facebook.

If the NY Times stops posting on Facebook, the NY Times will still have increases in readers and perhaps an increase in viewers. It’s arguable about whether or not the NY Times has made a terrible error in posting anything to Facebook. If I know that I count on the NY Times for my “content” but also know that I have the NY Times in my Newsfeed on Facebook, than I am much less likely to visit the NY Times app, website or open the email because I am counting on seeing the NY Times content on my stream. In fact, I even get a small preview that will likely let me know what the “content” is about and so there is no reason to visit the NYTimes.com or their app on my iPad. This is arguably a terrible business model for the NY Times!

The same can be said about entertainment – TV shows, Movies and Artists (i.e. musicians) that get little or nothing for producing “content” for Facebook. Why should Britney Spears keep placing “content” on Facebook? It’s not like Britney Spears needs 910 Million people to be introduced to her, does she? In fact even if only half of her “likes” turned into paid subscriptions at $1, she would have a entirely new revenue stream just based on the “content” already being produced.

Facebook May be Maxed Out!

We all know there is a peak in every business and venture but at 900 million how much further can you really grow? In fact, by recent number indications, Facebook may already be slowing down. Getting 900 million to pay attention to you is one thing, getting them to stay is another. As a Facebook user I admit I already spend a massive amount of time on Twitter and LinkedIn in comparison to Facebook. When Pinterest came out I gave up more of my Facebook time, not the other two!

Why are other Social Sites stronger then Facebook? They have a niche! Facebook has tried to be all things to all users and that’s gotten them lost! LinkedIn is where we go to do business and professional networking, Twitter is the top choice for news and chatting – after all you’ve never heard of a FacebookUp have you? Ever attended a virtual conversation on Facebook? In fact, Facebook completely dropped the ball when GooglePlus captured the world’s attention with Hangout! When you try to be everything to everybody you end up being no use to anyone, that’s Facebook’s grim future right now.

Note: Google may be the exception (Search and Social Come Together)

Facebook Lacks innovation

Let’s face it, when you fail to innovate you tend to open the door and show yourself out, Facebook showed early signs of that when Twitter was released. That was arguably the start of Facebook’s Why didn’t we think of that? Well lets copy it or better yet buy it!

The list goes on and on, Facebook got its status updates from Twitters innovation, Facebook Places developed from FourSquare and GoWalla, which was such a failure that later they bought GoWalla. Google Plus quickly trumped them with Video Chat and so Facebook tried to copy it. Once Facebook realized that Google was way too big and they could never compete with the inbound marketing of the search Giant, we then had a short lived Bing/Facebook Social Search integration. You love Google Video Ads, well Facebook copied that too. Fan of being able to Pin It! so is Facebook. If you really love the fact that a picture is worth a thousand words, then that’s the equivalent of a billion dollars as that’s what Instagram was acquired for, by Facebook!

We could talk about the business model, but after all the news about retailers flocking to Facebook pages and then running away clearly it’s not a primary place for business, no matter how many times they try to tell you it is.

Facebook is clearly over extended and in complete chaos with its inability to innovate beyond its checkbook. This doesn’t mean that it doesn’t have value in marketing and advertising, after all 900 million emails is a safe list, just one that might not be quite as valuable as we have been lead to believe.

Facebook Does Not Replace a Conversation!

 It is possible that in the near future society  will hinder Facebook forever, a status update is not a conversation. Networking, Learning and Communications are greatly hindered by the existence of Facebook and its just a matter of time before our nation and communities around the globe shun Facebook as a major contributor to health issues and conflict. Facebook has little if any reality in it, it is a place for people to share what they choose, trying to showcase themselves, their family and their lives in the best light possible even if it is the furthest thing from the truth.

One might enjoy the idea that grandparents can see their grandchildren through the curation of an edited and extremely biased feed, the truth however could range from basic struggles to life threatening abuse that fails to get discovered from a lack of real world contact.

If you’re a friend, family member or loved one, I hope you don’t mistake the value of real life contact with the purpose of a feed. I most especially hope it’s not at the cost of a future or a life.

The Balanced Truth

While I spent most of the time looking at a few of the issues that will impact Facebook’s survival, I don’t want to be unfair. Facebook is a great tool, but it’s just that, a tool! Facebook has connected people like never before, contributed to the free dissemination of information and pioneered Social Media into the revolution of digital communications. However, it’s just software.

Facebook cannot replace real life communications or the desperate need we have for them as part of our existence. No child will be born because of Facebook, no war will be stopped, no product will be manufactured by it, and no business will grow simply because they were on Facebook.

Children come from physical contact, wars are averted through communication that requires we hear, see, touch and smell each other. Facebook is not going to get on the assembly line and build your Ford, stove or Mobile Phone. Facebook will not report the news, and ask the tough questions. Facebook will not repair your roof or rescue you during an emergency. Facebook will not raise a child, nurture them, inspire them and provide for them. No business will be successful because they got on Facebook, that’s up to the entrepreneur, their vision, passion and hard work. 

I am taken in awe by Facebook’s Innovation to come to existence and serve a purpose, it has changed lives, some for better some for worse. Facebook has value and can be used as an effective tool, just not one that a reasonably educated and experienced person can see growing much further. Facebook has been a consumer of great ideas and innovative content, but that’s the problem, it consumes, it doesn’t create.

Author:

@BasilPuglisi is the Executive Director and Publisher for Digital Brand Marketing Education (dbmei.com). Basil C. Puglisi is also the President of Puglisi Consulting Group, Inc. A Digital Brand Marketing Consultancy that manages professional and personal branding for Fortune 500 CEOs, Hedge Fund Managers and Small Business Owners.

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***Disclaimer, The article is meant to share the opinion of the author based on availble informations and data, it is not an investment tool.***

The Importance of Facebook Marketing Engagement Tools

Discussion of social media campaigns would not be complete if the power of Facebook engagement was left out. Brands of all sizes and from many industries create a huge gap in their marketing without some kind of interaction on Facebook. With over 800 million active users worldwide, this leviathan of social media platforms is a source businesses cannot ignore.

Facebook as a Marketing Tool

There are a number of examples of ways businesses have used Facebook to drive traffic to their page and, consequently, to their brand. Some strategies are more effective than others. In fall 2011, Remington, a beauty and hair care company, launched a campaign to gain Facebook fans. The company posted a personality quiz relevant to its followers called, “What Kind of Girl Are You?”

The result? 54% of followers took the quiz, and for every 1 share of the quiz results, 1 unique visitor took Remington’s quiz. This drove traffic to Remington’s page which, undoubtedly, boosted sales. This is just one of many examples of a business using Facebook to reach out and attract current and new customers to their brand.

Maria Peagler (@sm_onlineclass on Twitter) shares over 50 Facebook marketing strategies through her classes that include utilizing contests, regular interactions, and collaboration with others to improve marketing on the site. Twitter user @JeffAbel recently shared a screenshot of the strategies here.

Using regular marketing tools has also been found to be more beneficial than using targeted ads. As the chart below shows, users in general are not fond of ads on Facebook. Over 40% of those surveyed in June 2010 by Inside Facebook did not like ads from sites other than Facebook itself. In a separate question, 62.7% of those surveyed disliked ads from other websites.

For some users, obvious ads through Facebook deterred them from the business. In today’s digital age, creativity is a must when it comes to marketing, which means reaching beyond the usual ads and campaigns.

Using Social Plugin Tools: Rebranding a Business

Facebook’s resources for pages offer many suggestions for creating engaging content, which includes using social plugin tools to let others know on your websites and profiles about your page.

I recently rebranded my freelancing business and took full advantage of the social plugin tools. To start, I worked with a fellow freelancer, Amanda Rinker Editing, Etc., to create a Welcome page for my business.

The Welcome page has received a number of compliments and has others asking themselves, “What do I need to do to improve my Facebook page?” Ms. Rinker also included a “Contact” page so those interested in my writing and editing services can email me directly rather than going to my website to search for contact information. These professional touches are just some of the ways businesses can create engaging content.

Another aspect of my new page was getting others to move from the personal freelance writing page to the new one. This is somewhat problematic since Facebook changed its layout multiple times this year. Along with this, the new layout with highlighted stories makes it easy for posts to become lost in the chaos.

To make the transition smoother, I have left up both pages for a period of time and regularly reminded users when the older page would be unpublished, both through my personal account to friends and family and on the older page. This encouraged users to go to the new page of my rebranded business. Over half of the previous page’s users have “liked” the page so far, and the new look has brought on new followers as well.

Conclusion

It’s one thing to have a presence on Facebook, but quite another to use it as an effective marketing tool. Today, businesses must use a variety of tools to educate, inform and gain revenue from their customer base. Whether this means creating a custom quiz like Remington, avoiding ads that might make customers uneasy, or rebranding to entice new business, it is important to see Facebook not just as a platform, but as an important tool in your marketing arsenal.

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