Monetization has been a big problem for social networks. Earlier this week, Twitter announced @earlybird – a simple Twitter account that will bring deals from partner websites. It’s a simple concept that, with proper promotion and attractive deals, shall help the company make some significant amount of money.
Facebook has had its fair share of problems too – despite the fact that the company now claims to be inching towards the $1 billion revenues mark. $1 billion sounds big. But not big enough for a network that is 500 million strong.
Among the various avenues that Facebook is seeking to make money from is the social context ad platform. These are the tiny blocks of ads that you might have seen on your Facebook page. They are socially contextual in the sense that they tell users about their friends who “like” the ad (or brand).
According to a recent post on the WSJ, the company is learned to be aggressively pitching this ad unit to companies like Ford Motors and PepsiCo to get them on to the bandwagon.
Sheryl Sandberg, Facebook’s chief operating officer thinks it’s a great idea to use the social context to promote brands. She says,
“Marketers have always known that the best way to sell something is to get your friends to sell it. That is what people do all day on Facebook. We enable effective word-of-mouth advertising at scale for the first time.”
While there is a lot of truth to it, the bigger question is if this is enough. As WSJ notes, Facebook users are to a major extent unaware that merely ‘liking’ an ad could get them to become brand ambassadors of the product and hence can potentially backfire. So as you can see, this can potentially backfire.
What Should Facebook Do?
While Sandberg’s argument is true, there is a need to build upon it. The social context ads do improve word-of-mouth marketing. But the more essential aspect to promoting a brand on a platform like Facebook is building conversations. ‘Likes’, comments, becoming a fan are all part of that conversation. So the answer lies in creating a platform where all of this can happen at one place.
I’m going to take up the example of Twitter’s @earlybird to propose something in this regard. Facebook needs to introduce a new tab on the user’s profile for ads. This section could list down all updates from the advertiser’s Facebook profile. These may be videos, links to press releases, media mentions,etc. But the user is not necessarily an existing fan of the brand and is merely a user from the targeted demographic.
Such a section could provide Facebook users an avenue to not just ‘like’, but also comment, discuss and share posts. As with all Facebook activities, these get shared to all of the users’ friends – Intuitive enough since most of the users’ comments and activities on their account are anyway shared with friends. Such a section can also build conversations and improve word-of-mouth marketing. The ROI for advertisers is huge, users benefit by conversing about ads and Facebook is not controversially deploying its users as brand ambassadors.