Facebook Needs More Than A Lesson From Dale Carnegie

Mar 06, 2012

Everyone last week was abuzz over Facebook’s “marketing conference” (which wasn’t really a conference but more like a day-long presser), excited about the changes that are coming to the site (and mobile app). “More visibility!”, “Better data!” and “Brands have to be storytellers now!” (which most suck at, but I’ll save that topic for another post) were the cheers post-conference. Facebook is trying to make a run at ad dollars like never before and in the process completely sell out its user base.

Yes, data is the holy grail of marketing, but considering the lack of attention paid to it by most companies it seems like the talk of big data isn’t going to be realized until more companies and agencies staff up in their analytics and research departments. This, of course, begs the question of what the hell have they been doing up until now, and what’s taking them so long to do it? Do they think it’s going away? Don’t answer that, because one corporation I recently spoke with, after getting bad advice from their agency and thus seeing zero return,  is walking away from social media in exchange for mobile marketing. But I digress.

Facebook has become the cable company. Or the electric company. Or any other utility that has forced its way into your life and, when it fails, is a complete son of a bitch for not working 24/7/365. It certainly explains, in addition to the company’s many missteps on products and privacy, their horrible satisfaction results.

Beyond this reality the young company now faces, it has purposely created a series of horrible experiences for its users and advertisers, of whom a host and parasitic relationship exists – if one leaves so does the other.

How can Facebook help build good will and turn it around? It’s actually a lot easier than you think, but it’s going to take some major rethinking about how the network began and where it needs to go. It will be painful, might require some layoffs and will require a new way of thinking about how they’re going about the social graph.

For starters, on an very basic level, let’s kill the mobile app warning when you try to leave it to read a story outside of the app. Yes, I get it – they want to protect phishing and auto-clicking of links. However, I’ve yet to hear about, find or encounter a virus that is able to launch Safari via the “Open in Safari” link on Facebook’s mobile app. Never mind the fact that the Facebook browser is painfully slow, but asking me to click three times to read something is completely insane and given your low satisfaction and trust ratings no one really believes that you’re looking out for their best interest anyway.

Furthermore, the exit “warning” Facebook provides is almost a “WAIT! TURN BACK!” desperation letter from a company that hasn’t figured out how to track you once you’ve left.

For the safety and privacy of your Facebook account, remember to never enter your password unless you’re on the real Facebook web site. Also be sure to only download software from sites you trust.

[Continue -- to the link you clicked] [Go back to Facebook]

This, along with their previous gaffes, only contribute to the distrust Facebook has created. That’s not good. To summarize: Stop trying to make people think you care and create a better user experience. You’ll be surprised how much less people hate you when you’re not being smarmy, sketchy pricks.

A larger issue Facebook needs to think about, beyond the experience of the site, is that it’s essentially killing off small businesses and only chasing big brands now. Their new “premium” ads are supposed to have an insanely great clickthrough rate, which is great news if your company can afford those ads. Given their push to sign up local businesses, it’s pretty apparent that Facebook is now turning its back on them, casting them off into the land of forgotten advertisers. Screw the long tail, indeed….

My post on Facebook’s ponzi scheme is looking even more accurate today than ever, and if you’re a company of any size you’re probably reconsidering working with the social networking giant in favor of renting a cheaper solution. One of my client’s dormant, outdated site was getting 10,000 unique visitors per month, which is a hell of a lot more than most companies can say about the engagement levels on their fan page. If you’re that company, why would you bother dumping a ton of cash into a site that may not even be around in a few years, let alone is going to cost you an arm and a leg to get attention? It makes no sense, however lazy advertisers are willing to pay through the nose via an advertising tax to be unremarkable.

Speaking of paying….

It’s being said that Facebook is already going to be missing revenue targets pre-IPO. Some were saying “Well but that assumes they won’t change the site or grow!”, however most people that use the site are sick of it or at least would leave it another option came along (see: utility comment above). The problem Facebook is facing goes well beyond revenue targets but revenue itself. The company, with high salaries and server costs, HAS to go public in order to raise more cash. And therein lies the problem: They’ve reached a point at which their fixed costs relative to future income are hindering their potential for growth. I’m not saying they can’t continue to grow, but a good portion of the planet is using the site and they’re not going to hit revenue targets? Unless the Chinese lift their child limit laws or another planet is discovered, it means one simple thing:  Basing your sole revenue model on selling data and ads means that there’s a cap on what companies are willing to pay for it, and ultimately what the value of that data is. And unlike the cable companies, Facebook owns no real infrastructure that can be leveraged to charge a more premium price.

Google figured this out a long time ago – you own the content, you can charge a premium, which is why they bought up content creation companies. They own the infrastructure on search, they are launching internet access in Kansas City, and they own the content. Google’s going to give Comcast, Time Warner and the studios a run for their money because they want to own entertainment from end to end. Facebook’s content comes mostly from its users but unlike, say, Tumblr, very little of it beyond status updates is valuable content. Which leads me to my last point below as to why I’m not recommending clients not invest a ton in Facebook. I’m not saying they shouldn’t set up a free store in the world’s largest mall to see what happens, but there are much better way to invest in word of mouth programs than with a company that just recently recommended brands think about including a “Why would I share this?” in their brief.

Beyond all of this, there is a fundamental flaw with Facebook. Yes, it’s been a lot of fun to hang out with friends. And co-workers. And people I went to high school with. But the internet isn’t about everyone you’ve ever met. It’s about your passion points. Passion points, unlike your child’s photos or other pithy updates, ARE monetizable, but very few of the people in your friends list are people whose advice you want on specific subjects. Do my friends know which tires are the best for my Honda Pilot? Probably not, but the guys and gals in the Honda forums sure do. Add in the fact that a lot of businesses have closed their “f” commerce shops (because shopping socially for tampons and sweat pants isn’t social to begin with) and my point has been made. Facebook is turning to big companies who’ve yet to realize a significant return on their investment, while their real play should be with local. But they don’t get that due to the aforementioned issues above – their infrastructure isn’t scalable enough to support billions of users on the long tail.

So while Facebook might have all of your address book on lock down, they have nothing when it comes to your passions — and that’s where the real money is.

1 Comment. Leave new

AOL circa 1999. Maybe Time Warner will buy Facebook ;)

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