10 things Post-IPO Facebook can do to get liked by more advertisers


 

People are on Facebook because their friends are there. The Social Graph, Facebook's fancy name for all the connections on Facebook, grows every time we accept a Friend invite or subscribe to someone's status updates. The Open Graph, which goes beyond Facebook itself and into the rest of the world wide web, expands every time we "Like" an article or log in to a site using Facebook.

 

Facebook's nearly 1 billion monthly active users have made the site the standard for social and this is why marketers turn to Facebook when it comes to doing "social." There is simply no other platform that allows marketers to do what they can do on Facebook and the company has been able to help companies strike an impressive balance between owned, earned and paid media.

 

“People influence people... A trusted referral is the Holy Grail of advertising." - Mark Zuckerberg, 2007

However, some large brands and SMBs with a presence on Facebook are not yet sold on the platform's value, particularly when they have to pay for advertising. As Facebook ad rates rise and companies like GM go public with their skepticism, Facebook has to deliver more value to marketers than ever before and it needs to do so without alienating its users.

Here are 10 things Facebook can do to become more attractive for marketers and advertisers:

1)
Enhanced targeting
 
Facebook is a fantastic option to target ads based on demographics and interests. Almost 1 billion people have told Facebook where they went to school, where they work, where they live, who they like, who they're related to, how old they are and what kind of stuff you're into. But many people still complain that they are not seeing relevant ads. So what about contextual targeting? What about retargeting? Whether it's keyword targeting or defining what the future of "social search" can be, Facebook needs to be the best way to target not only the right people, but the right people at the right time. Facebook will need to continually push for more relevance in ads while ensuring ads do not become intrusive and privacy concerns do not get out of hand. 

 

2) Better measurement
 
Marketers might not like data but they most definitely need it. Experimentation in social media is no longer what it used to be as marketers increasingly have to show the value of each dollar they spend. This often leads to depending on superficial metrics and third parties. Facebook improved its Page Insights product in February and Facebook can now be optimized to drive specific actions, but it can always do more to provide better data (and maybe even some actual insights). Marketers that will be more willing to spend money if they have better ways to understand what that money is actually doing for them, whether the goal is affinity, advocacy, earned media value, engagement, traffic or something else.

 

3) Increased reach
 
Advertisers are attracted by the idea of being able to reach almost half of all Internet users on Facebook. However, there are three things that keep marketers from greater reach. For starters, users are spending more time on Facebook's mobile site and mobile apps, and they are not seeing ads on-the-go. This will soon change and Facebook will need to get it right because marketers will expect their ads to work for them across devices.

In addition to mobile ads, what about ad units in other areas of Facebook (like within videos and the new App Center)? And what about ads all over the web? Will Open Graph finally get a marketing driver beyond plug-ins and like buttons? An AdSense-like product might just be the big surprise Facebook has stored for us now that it is public, but we can only speculate at this point.

Finally, Facebook's EdgeRank keeps 84% of page fans from seeing posts. EdgeRank can allegedly be improved by doing things like using photos, finding optimal times to post, and being consistent, but 4 out of 5 fans might still not ever get a reminder that your page exists. Reach Generator can be used to increase fan reach from 16% to 70%. As some brands like GM and small businesses with low budgets focus on the "owned" part, Facebook may need to think of more flexible ways to drive fan reach.

 

4) Local
 
SoLoMo has become a buzzword in Silicon Valley and Madison Avenue, but the promise could become a reality if Facebook delivered mobile ads that where relevant not only based on who you are and what you like, but where you are and what you might be looking for. Target might know you're pregnant but what if it were able to give you an offer or simply a thank you for being a Target fan visiting a Target store? 
 
5) More friend-to-friend marketing opportunities
 
Sponsored Stories are great because they are the perfect blend of word of mouth and advertising. "Your friend likes a brand? Well, maybe so should you!" This kind of ad unit has never been possible before but competitors like Twitter and Google+ could follow suit. Facebook needs to not only stress the benefits of this kind of advertising, but evolve it to become a kind of word of mouth users want and expect.

 

6) Increased sharing and discovery

Facebook's mobile app doesn't allow us to share posts. Facebook sponsored posts cannot be shared either. Even though the Open Graph has made sharing from any web site incredibly easy to do, it's not always easy to share content from within Facebook itself. Some would disagree, but I find it easier to share content on Twitter and Google+ than on Facebook. A quick look at the "ripples" on popular Google+ posts helps prove my point. And what about discovery? What about a place on Facebook that displays content, including branded content, that is relevant and/or trending? I know I know, Facebook does not want to be seen as a media company, but curating the way LinkedIn, Google+ and most recently Twitter have been doing, could prove to also be a new way to generate traction for brands.

7) Ad optimization tools

There are many ad optimization vendors that will automate the process of delivering the right type of creative to the right kind of people at the right time to maximize success. However, many advertisers don't even know this is possible. Some ad vendors are avoiding Facebook Marketplace altogether, resorting to shady affiliate links and all kinds of strange tactics to drive LIKES for Facebook pages. Facebook might not benefit from higher revenues because optimization usually means lower costs, but what if Facebook applied its razor focus to this? What if Facebook ads were the most efficient ads on the web? And what if anyone who advertised on Facebook could get the benefits that only the savviest marketers obtain today? Some advertisers already have access to the Ads API to optimize ads with specific goals like increasing "People Talking About This," app installs, and past post shares. Let's hope this trend continues.

 

8) F-Commerce
 
1-800-Flowers.com set up shop on Facebook back in 2009 but you can no longer find that Facebook storefront on their Facebook page. Gamestop, Gap, Nordstrom and many others have also closed their Facebook stores. Others like Pampers continue to sell directly from within Facebook, but as marketers decide between setting up storefronts, creating the illusion of a storefront or simply linking to their websites, Facebook needs to re-define what "F-Commerce" really means. Is it social commerce enabled on websites via Open Graph? Is it personalized shopping options? Is it News Feed offers? Is it Karma-enabled social gifting? Or something else?

 

9) Premium ads that actually look premium
 
This one is controversial because Facebook might not have gotten to where it is today if it had cluttered the experience with big and shiny ads. Facebook has experimented with ads like homepage takeovers and Log-out ads, there's still opportunity to create "paid" experiences on Facebook that advertisers are willing to pay a larger premium on. Facebook is not only competing with other companies, it's actually competing with itself because some of the most memorable "campaigns" were powered by Facebook but had nothing to do with social ads (ie. Intel's Museum of Me, Burger King's Whopper Sacrifice and Ikea Showroom). How can ads and sponsored content stay true to the nature of Facebook while also allowing advertisers to get much more creative with their executions? 

 

10) Mobile from the ground up
 
Facebook likes to say that marketers need to think about "social from the ground up." And they're right.
In the same way, Facebook needs to think about mobile from the ground up. While Facebook's mobile experience has gone through an amazing journey from subpar to being one one of the most visited mobiles sites of all time, it has a long way to go. Facebook is already learning from Instagram, but Facebook needs to give even more attention to marketers' needs. Mobile ads are one thing, but the entire mobile experience is important to marketers. Facebook pages on mobile devices have not changed much since they first came out. They have not yet adopted the Timeline look & feel, and they don't display tabs or applications. This means that brands have to go through extra effort to be able to deliver content and experiences on mobile devices. As spending in creative and technical expertise increases, spending in other areas like social ads decreases.

Conclusion

 

In the end, marketers want measurable and actionable results. According to a study by Webtrends, people only click on about 1 of every 2000 ads they see on Facebook. If the average CTR for digital ads is about 0.1 percent, then Facebook's 0.051% is concerning, especially when considering Google's 0.4%. Facebook was quite strategic with the risks it presented in its S-1 filing. Click-through rates were not mentioned as a risk even though it was mentioned that ads will have to "generate a competitive return relative to other alternatives." 

Savvy social media marketers would say that CTRs are not the goal. Activity, engagement, and long-term connections (and even relationships) are what Facebook is for. Some might say "You're doing it wrong," "Use CPC dummy," "Work with the right agency," and "Measure engagement," but the bottom line is that higher CTRs would demonstrate that Facebook's ads are as relevant as promised. 

Relevance is what marketers want and relevance is not exactly easy to measure. It's also not easy to achieve without leveraging data and Facebook can't afford another "Beacon" so it's pursuits when it comes to working with brands needs to be extremely calculated. As a marketer who focuses on social media, I constantly remind myself that consumers don't want to be annoyed or bothered; they just want relevant content.

An abilitiy to consistently deliver such relevant content in an innovative and flexible manner will get advertisers not only interested, but also happy and eager for more. Post-IPO, Facebook needs to see itself as a partner that can help brands get there, wherever "there" is. 

Copyright © Esteban Contreras. All rights reserved.