Three areas in Facebook’s Business Model to Question

A social network born out of a dorm room has come a long way over the past 8 years. Here are just a few stats to show its immense growth:

  • 901 million monthly active users (March, 2012)
  • On average more than 300 million photos uploaded to Facebook per day (March, 2012)
  • An average of 3.2 billion Likes and Comments generated by Facebook users per day (March, 2012)

Despite its growth and ability to integrate in many aspects of our lives, Facebook has some areas us marketers question. Is it really a social network or an ad network? If it’s for marketers, then where are the advantages for marketers?

Facebook Ad Reach is Minimal

Although most brands have planted themselves on Facebook by adding Fan Pages, switching to Timeline, and perhaps even gone down the road of paid advertising, it isn’t always so simple to reach fans. Facebook doesn’t make it simple, nor do they give the reach once thought or expected. Most brands unless they truly engage with their consumers (shares, comments, likes, etc) will most likely reach 17% or less. In short, to get to fans not only must your brand have mouth watering, tantalizing content – but you need to fork up the big bucks and pay to reach your audience as well. The content is one thing, the money is another.

It has become more evident as even some brands have decided to put less effort into this ad network instead of putting all their ducks on board. “In mid-May, just ahead of Facebook’s IPO, GM’s marketing executives said they would pull $10 million in advertising from the social network after judging the efforts had “little impact” in reaching consumers.” Are they just the first of many?

Mobile: Who Will Dominate?

“Analysts also think Facebook will face difficulties deriving revenue from the growing n
number of Facebook users who access the site using mobile devices, through which Facebook derives much less advertising revenue than through a desktop PC. Facebook rivals Google and Apple currently dominate the mobile arena.”  Although it’s key to have content mobile optimized, I know that I am even less likely to look or participate in ad content while I am on the go. As long as brands are not putting all their eggs in Facebook ads and Facebook content then the brands are marketing and strategizing correctly. There are so many other ways to get your content to where your audience wants it and where it wants it. Depending upon your brand platforms like Tumblr and YouTube may be better assets and drive more search traffic to that content. Mobile is great, but only if your content actually reaches your audience when they want it and where they want it.

Instagram Acquitision

Was this acquisition about being a “friend or foe?” Some wonder as now Facebook is looking into their own photo app for consumers – which looks quite similar to that of Instagram. I was initially impressed that Facebook had purchased such a great asset as Instagram – a photo app which so many upload to, view, and share on a consistent basis. Photos have such rich content that words cannot match at times – and Facebook realized the opportunity when they purchased the app. However, will they keep Instagram running and giving its audience what they want or will they use it as ammunition for their own photo app?

Facebook isn’t going anywhere anytime soon, but there are definitely pitfalls for marketers and consumers alike. Which platform will your brand turn to next? My 18 year old sister (the new generation) said it best…”Why would I spend time on Facebook, when there’s Twitter, Instagram and so many others…”

Note: This post was originally written for socialnomics and my original post can be found here.
 
Additional Reading:
http://marketday.msnbc.msn.com/_news/2012/06/05/12069407-facebooks-problem-ads-arent-grabbing-users-analysts-say?lite 
Image Credit:
http://www.laferle.com/tag/quitting-facebook/
http://softsupplier.com/tag/facebook/