Is there an easy fix for Facebook advertising?



Contributing Writer
Photo: Empty Billboard Credit: Michal Zacharzewski


Recently an opinion piece in AdAge suggested that a simple solution to Facebook’s advertising problems would be for brands to pay for their fans based upon reach and engagement.  In other words, mimicking traditional advertising where brands would pay a fee per post (which would vary based upon how many fans the brand has).

The argument that they lay out to support this is the following:

  • Facebook’s platform is poorly suited to traditional advertising
  • Facebook users have contextual issues with buying on Facebook
  • There is an economy completely out of Facebook’s purview producing content to be used on brand pages which doesn’t benefit Facebook at all. 

While Facebook’s frenetic post-IPO advertising changes seem to support the argument that something needs to done about their product, I’m not sure that imposing a system like this would be as much of a slam dunk as advertised.

Where do you go specifically to consume advertising?

The first part of the argument is that Facebook’s platform is poorly suited to traditional advertising.  But what is?

When you are watching TV, do you feel compelled to watch advertising?  Neilsen’s C3 ratings indicate that there is a sizable portion of viewers both in real-time and on DVR that don’t watch commercials.  When you are driving down the road, do you drive so that you can consume advertising on billboards?  Do you watch videos specifically to see product placement?  Do you watch YouTube videos specifically to see advertisements?

The whole marketing world is focused on delivering messages through noisy platforms.  Facebook’s utility doesn’t makes it any less suited to advertising than any other platform, but the mechanisms for advertising are quite immature.  They haven’t stopped changing since March.

Have we seen the true potential for Facebook ads?

If you remember back to Choose Your Own Adventure books, you might appreciate navigating through the Facebook Advertising Guide.  Do you want to promote a post or your page or a link?  Mobile or desktop?  CPC or CPM?  Choose a targeted audience of at least 100K users by geography, interests or their proclivity to like your site…. or your app.  And once you navigate that gauntlet, decide what your budget is.  Simple right?

It’s very analytical and one could see how it might seem useful to your average software engineer.  But compared to the ease of use of Google’s AdWords it’s awfully confusing.  Probably because there are too many options.  Add to that the opportunity to place in-app ads and you can see why advertisers (particularly smaller advertisers) would be bearish about the product offerings.  My own personal opinion is that Google does a great job of identifying advertising and placing it prominently in their SERPs.  Facebook has so many places that ads could pop up, and they are so deceptively masked sometimes that they may be their own worst enemy.  (I say this as Google just announced THEIR advertising is down 15%)

So, to the point about Facebook users having contextual issues with the platform – I wonder is this a real phenomenon or is it caused by an immature and confusing ad product?  Do you look at Facebook advertising and say that it now has optimal impact on Facebook’s 1 billion active users?  Is it the best that Facebook can do?  I propose that it is not.

If brands pay for fans, doesn’t that leave some unresolved issues?

I get that there is an economy creating content for Facebook without any monetization, but even if brands paid for fans and posts it seems to me there would still be a need to do creative independent of Facebook.  I’m not sure that’s a strong argument.

I do think that this would probably preclude many small businesses from participating on Facebook. I don’t see this as a particularly horrible thing as the perception of Facebook as a small-scale marketing tool is much more positive than the effectiveness of Facebook as a small-scale marketing tool.

But what about people who “Like” the moon?  Does someone pay for that, does it go away entirely, or do you have to draw an arbitrary line between the kitsch and the commercial?  What about brands that have worked around Facebook’s tomfoolery by making their personal page a fan page?  Do you pay for subscribers too?  Or does that go away?

Rather than an “about-face,” slam-dunk way to monetize, it fundamentally changes some utility of the site.  Like regular advertising, Facebook ads would be paid commercials with the caveat that it would be incumbent upon the brand to develop their own channel and content.  As evidenced from the impact of GM pulling advertising from Facebook – how many large accounts could stop advertising on Facebook before it would impact them substantially?  If it’s incumbent upon a brand to build the channel, create the content, and pay for advertising  - what’s to say that they couldn’t do that completely independent from Facebook?

Is this for-realsies?

I don’t see this scenario even being a serious consideration.  It’s Facebook’s responsibility to sort out their advertising mess, and at some point they’re going to benchmark against AdWords and get some big wins (mobile incidentally has already shown increased effectiveness over the web ad product).

But imagine that Facebook took a proposal like this seriously – would users accept the deprecation of free “Likes”?  Would big advertisers be willing to shoulder the costs to keep Facebook viable?  Would small businesses be run off of the platform?  Answering “no” to any of those questions might be catastrophic for Facebook.  And I doubt that they would do anything so risky, especially given the continued volatility of their stock.

What does the futurist in you think is going to happen with Facebook advertising?  Would pay-per-post right the ship?

Jim Dougherty

Jim Dougherty

Writer and chief of miscellany at leaderswest.com

I aspire to give people something to think about rather than tell them what to do. My favorite Google Alert is “social media research,” I am increasingly compelled by Gen Z, and I appreciate good writers agnostic of where they write. At one time I was Kred’s 12th most influential social media blogger and Klout’s most influential person on the topic of David Hasselhoff. Transplant from Seattle living in Cincinnati. Haven’t entirely adopted the local sports teams yet.

Jim Dougherty

@jimdougherty

Writer about social media and tech at Leaders West, I also tweet as @leaderswest.

Infographic: Is the value of Foursquare overstated? http://t.co/X6SwuqLLcD – 20 hours ago

Jim Dougherty

Jim Dougherty

  • http://www.razorsocial.com/ Ian Cleary

    Hi Jim, at the moment only about 16% of fans see brand updates so if brands want all their fans to see their updates they have to pay anyway. That 16% will probably come down to 10% or less as Facebook need more advertising money! It’s pay for play…. Ian

  • jimdougherty

    Great point Ian! I suspect that the 16% is actually lower since many businesses aren’t aware of third party penalties that Facebook levies (at least for businesses). I agree with you that businesses will advertise on Facebook by necessity and that will grow if Facebook can get their house in order and find a complement of products that reliably work for businesses. Great insight – thanks for reading and commenting!

  • Tom

    I wish when a business posted it had the option of paying to reach all it’s fans for that post. Then you could reach people who decided they wanted you in their news feed instead of the 16%. I would pay for every post but there are some you want to get out there and it should just be one click, and then a fee depending on the number of fans you have.

Top