Facebook Ad Revenue Growth Real?
Facebook is not a publicly traded company. Although there are many people speculating that Facebook will go public in the near future. As a privately held company, Facebook is not required to release any financial information to the public. Furthermore, the company does not have to have its finances audited either. That doesn’t keep financial writers from trying to guess how much money Facebook is making.
Recent stories, like this one from Reuters, continue to suggest that Facebook is growing fast and that it is raking in tons of advertising revenues. The source of all this incoming cash, of course, is paid advertising. Some investors expect Facebook to earn more money than Google from advertising in the near future. The idea is that, unlike Google, Facebook users can be shown ads that are relevant to users even when they are not searching.
“We can provide really good, relevant advertising to people because they tell us exactly what they are interested in, and who they know, and those people tell us what they’re interested in,” Facebook Chief Executive Zuckerberg said at the All Things Digital conference this month.
Relevant Ads Worth More Money On Facebook
The business strategy behind Facebook’s rising advertising revenue is sound enough.
A user fills out a profile in which they state that they have “Interests” in various things. For example, a user might say that they are interested in chess. Then, theoretically, that user would be more likely to have advertisements related to chess appear than a user who had indicated interest in other topics. But, does the reality of Facebook ads bear this out?
If you are a Facebook user you may have noticed the various ads that appear on the right side of the screen. These ads are the ones that are supposed to be relevant and “targeted” to users based upon their profiles and other preferences. However, to most users, these ads appear to be thinly targeted, if at all, to their interests.
Recently, some advertisements tried to make use of the personal information in Facebook profiles by using the person’s age in the advertisement. Ads like “If you are 24 years old, you can get car insurance for $20 a month” appeared. Is this what Facebook means when they say, relevant advertising?
Other ads seem to be vaguely geographically targeted. For example, users in Phoenix get advertisements that make use of the word Phoenix (even for national brands and ads) or, in some cases, ads for actual Phoenix businesses. This is indeed useful, but hardly revolutionary. Unless you take advanced measures to frequently wipe out your Google cookies and other information you’ll get plenty of local ads there too.
Ironically, ads that are actually irrelevant and uninteresting to users will frequently appear on the user’s Facebook screen. For example, users that block Facebook games like Farmville or Cafe World still often see ads for those games despite having indicated that they are not interested. Users who are members of a Ford fan club, have tons of posts by themselves and friends about Fords, and have hundreds of “likes” for Ford related sites and information still see ads for Chevrolet. In fact, members of groups like Chevy Sucks or I Hate GM will still see advertisements for those products on Facebook.
Facebook Ads Not Relevant To Users – Worthless?
It is often said that reality is perception. Facebook frequently states how they can target users based upon their personal preferences and information and that concept is often repeated by journalists and analysts. But, is anyone actually checking to see such targeting is being done?
Going beneath the surface and doing some actual business analysis takes more time than many pundits can commit. Savvy technology writers, however, may uncover some interesting nuggets about Facebook’s so-called relevant advertising. The question is, can Facebook establish its “reality” or get a Facebook IPO stock for investors strategy executed before the world starts asking the hard questions?
Time will tell.
Facebook Like Google Killer ?
Wow. To read the technology news the last week or two you would think that Facebook had all but shut down those poor saps over at Google. Site after site is "reporting" that Facebook’s new universal Like Button is going to replace Google’s search engine rankings pages, aka SERPs, with a much better Internet search function based on its millions of users clicking LIKE on webpages all over the world.
(See! What did I tell you! That’s a LIKE button right there on this very webpage.)
This super-powerful Facebook weapon, called F8, is a Google killer and there is nothing anyone can do to stop it. If you are not a Facebook user, you must sign up NOW. If you are a website owner, webmaster, content publisher, Internet marketer, writing to make money online, an online business marketing expert, or even if you are the guy who pumps the stuff out of the bottom of Porta-Potties, you must start using Facebook now! You must add Facebook LIKE buttons to every website, webpage, mobile phone, iPad, iPhone, iStore, iFacebook — I forgot where I was going with this sentence, because I just can’t stop thinking about the awesome new power of Facebook!
Whew!
Sarcasm can be hard to pull off in writing, even for a professional writer. How did I do?
I might be exaggerating a little bit, but only a little bit.
- The Mercury News says Sorry Google, Facebook Is the Web’s Most Important Company
- A Newsweek blogger headlines Facebook’s Play to Take Over THE ENTIRE INTERNET
- The co-founder and CEO of Mashable, via CNNTech, goes all past tense on us with How Facebook Won The Web
- The Tech Section Velocity at Forbes notes Facebook’s Plan for Internet Domination
You get the idea.
And, that’s just the "responsible" journalism subset of websites. You can about guess what this all sounds like out in the rabid echo chamber of social media, or social marketing, or Web 2.0, or whatever people are calling it these days.
If all of this sounds just a little too over-hyped, then you just don’t understand what is going on!
Right?
Wrong.
Facebook Like Button Is No Google Killer
Don’t get me wrong, Facebook’s new F8 initiative could potentially be pretty great. It might even grow into a useful tool, but that is a long way from being anything more than a blip on the technology radar. The problem, of course, is that the people writing about the big new development from the Facebook developer conference are people who would go to, or read about, a developer conference. This is not a cross-section of middle America. These are techies.
Read my parenting skills tips or my credit card rewards reviews.
Again, don’t misunderstand. I am a techie. I spent years as a high-end computer systems consultant. Although I bailed on the tech industry right before the Internet Bubble popped and the computer industry melted down, I have never given up those techie roots. Thanks to my time as a computer consultant working at numerous companies from senior management down to local desktop support, I have a lot of experience with Information Technology and the issues and problems IT Departments and IT managers face. I leveraged my background to become a freelance technology writer and built that into a pretty nice little freelance writing business. — In all fairness, my expertise after my computer days came in personal finance where I was a Certified Financial Planner. I leveraged that into becoming a freelance financial writer, and the two combined were what gave me enough clients and income to go from start-up entrepreneur to building my own small business.
However, these days I interact with a wider circle of people both professionally and personally, thanks in part to Facebook. Like many people, a few years ago I had no interest in being on Facebook, in large part because I didn’t really know anyone else who was on Facebook. More specifically, I thought I didn’t know anyone else on Facebook. The ONLY reason I even signed up was that an increasing number of freelance writing gigs started asking for people who were "experienced with social media," or even "experts in social marketing." It’s hard to say that you are an expert in social websites if you don’t have an account on any of them.
With a Top 10 Social Websites You MUST Have a Presence On from some magazine, I proceeded to sign up for six social networking websites. (The other four were so obviously not germane to anything even remotely business related that I didn’t bother.) One of those sites was Facebook. I think three of the others no longer exist, or if they do, are most certainly not anything that you MUST be a part of anymore.
I filled out the little profile thing, plugged my freelance writing website (www.arcticllama.com) as much as possible and posted a handful of things. It might have ended there, except for one little thing. A former high school classmate who still consider a friend, but who I hadn’t talked to in years, sent me a friend request. Soon, I was linked to a dozen or so high school classmates. Then, my sister sent me a friend request and mentioned that I should do the same for a cousin who was living abroad, and so on and so on. Eventually most of my family was on Facebook and an increasing number of my friends and former colleagues.
Facebook Weakens Privacy Then Asks Users To "Like" Everywhere They Go
Which brings me to exactly why the Facebook LIKE button will not replace Google or even threaten to cast a the tiniest shadow over Google and its massive search engine business.
There is no way that I am ever going to LIKE certain things lest my friends, family, and co-workers see them.
Already, I have taken Facebook’s privacy tools to their limits. I have my "friends" organized in lists and with every single post, I carefully select which list gets to see that status update, MANUALLY.
I have to. It is not an option.
I have some friends and relatives who have strong religious beliefs. I have other friends and family members who are very liberal. I have clients who are very traditional (I have to wear a suit and tie when I go onsite) and I have clients who are more freewheeling than my crazy friends (I might have to go onsite naked … if it’s Friday).Whatever I do, I need to ensure that it does not jeopardize relationships that I have spent years, or in some cases, a lifetime, cultivating just so that I "Like" a webpage or website.
There are LOTS of people using Facebook who are in a similar situation. And, with Facebook weakening its privacy standards at every opportunity, it only gets harder to maintain the proper boundaries. Facebook has already made it so that users cannot hide their friends list. That means that some users must choose between keeping an ex-girlfriend as a friend or risk losing their current girlfriend. That also goes for former employers, current employers, former and current bosses, former and current clients, and so on. And that is just one tiny thing.
Facebook has offered no easy to use controls for its users to keep their LIKES separated based on friend lists for example. If I "like" a Save the Baby Seals page will a client that sells clubs stop using my services? Or, will they insist that I "like" a How To Club Protestors site? (I jest, but you get the point.) In other words, users will only be able to recommend websites that they know are inoffensive across their entire friends list. Either that, or they will have to violate Facebook’s Terms of Service and sign up for multiple accounts.
In the end, Facebook has already shot itself in the foot with this current initiative. Far from threatening Google, Facebook’s F8 universal LIKE button is already doomed to fail.
After a handful of Likes cause ripples by being sent back to Facebook profiles, people will stop using the button and go back to using similar services that they can keep separated like Delicious, Digg, or Yahoo Buzz, or whatever. Then, will come the news stories like the ones you see now about employers firing someone, or not hiring them in the first place, because of what they "liked" or even because of what they had not "liked." Usage of the like Facebook function will dwindle until it becomes nothing more than a bunch of techies creating a virtual mirror of the funny news, political wailing, and Apple stories that dominate Digg.
Of course, by then, all of those people writing about Facebook’s New Google Killer App will be writing about the next must use Internet dominating service or feature. Just like they were all writing about Twitter two years ago.
You thought we forgot, didn’t you?
Will You Use Facebook Like Without Being Able to Control It?
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Since you can’t separate LIKES using any built-in Facebook privacy features, how will you handle the new F8 Universal Web-Wide Like Button? Will you ignore it or only Like certain kinds of websites?
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P.S. If you have any examples of BEFORE / AFTER type news stories from major technology pundits who were writing about the domination of Twitter within the last two years who are now writing about the domination of Facebook, I would love to hear about them. Leave them in the comment below and I’ll even DoFollow your comment link back to your LEGITIMATE website.
(Don’t bother if its a "landing page" for some Internet marketing affiliate thing or whatever. I will only Do Follow links to real content, no cloaked links, no landing pages, no tricks. If you have a legitimate sales ad or opportunity on a webpage containing useful information, that is fine.)
Facebook Screws Up and Gets Usernames Vanity URLs Wrong
One of the greatest things about Facebook has always been that it is the same for everyone. You don’t have to be a “power user” like on Digg to get anything about of it, and you didn’t have to join 3 years ago to get a decent username like on Google Gmail or Yahoo Mail.
But, at 12:01am, Facebook will allow people to pick a username. The blog entry makes it sound great. Now, it says, you can be www.facebook.com/bob.smith instead of www.facebook.com/profile=19837254. Mainstream media is already touting what they are calling “vanity URLs.”
Yeah, sure.
That will be true for about 37 seconds. According to Facebook’s numbers there are 200 million “active users.” How many of them have your name? Including middle initial? Your nickname? Your online persona name?
Don’t think for a second that there won’t be millions of cyber-geeks, opportunists, jerks, weasels, and just plain old Facebook users sitting up hitting refresh at midnight. By tomorrow morning, that oh, so great sounding blog post will look quaint and naive when you can be known as “bob.smith8201735” or “The-Bobster-O-Rooney-Ding-Dong.”
In other words, after tonight, things will be just like they are now for millions of Facebook users worldwide. You will have to email, link, or write down your profile address for people to find your Facebook profile.
The only difference is that a few thousand Facebook users with fast Internet connections and nothing better to do on a Thursday night that sit in front of their computer will have better links and web addresses than you do.
It’s kind of a bummer. One of the things I really liked about Facebook was that I got to use my real name, the one people might actually look for me with, instead of having to try and come up with something that was unique, but not embarrassing, yet memorable, but not too…
It seems every time Facebook makes a change, they make it worse. The funny thing is that their current platform is wildly popular. Why not look for things to ADD instead of things to CHANGE!
Coca-Cola did one of them in the 1980s and the other later on. Which one constantly ranks in the Top 10 Corporate Blunders of All-Time and which one increased revenue and market share around the world?
Those who fail to study history are doomed to repeat it.
Facebook, get out the books. It’s time to study.
Social Networking Going Too Far or Business Just Trying Too Hard?
I’ve used Open Table for restaurant reservations for a long time. It is just so much more convenient to peruse around for what restaurant will fit your time and date and type of food rather than calling them one at a time to see if anyone has the ability to accommodate you. As an added bonus, I’ve never had a reservation lost, most likely because the reservations go right into the restaurant’s reservation computer system.
But, I noticed this today and can’t help but wonder why this would in any way be a necessary thing. Unless you were inviting people, do they really need to see that you have a reservation somewhere?
Now, posting your review after dining at the restaurant might be a useful thing, but this up front posting doesn’t really make sense to me, especially at the level that there might need to be a dedicated button to handle such a once in a year posting as opposed to some sort of manual posting.
The question then is this: Is Open Table – and several other businesses – trying too hard to somehow be linked / connected to social media sites like FaceBook and Twitter, or is there a legitimate need being met?
