In recent weeks, the effectiveness of Facebook as a tool for marketing has been scrutinized.
Nate Elliot is Forrester’s principal analyst. This global research and consulting firm fired off the first volley. Elliot sent an open letter that was scathing to Facebook CEO Mark Zuckerberg, accusing his company of “failing marketing”.
This letter, which was written just two days before Facebook announced its earnings, was backed by research done in a Forrester Report. The letter claimed that Facebook abandoned social marketers and urged companies not to dedicate paid advertising budgets to the site.
This report has sparked many conversations both offline and online.
Nate Elliot, the marketing professionals, and I could all be experiencing “el momento la verded”. In the Hemingway novel, “Death in the Afternoon”, published in 1932, this moment of truth tests the courage of the Matador (Zuckerberg), just as he is about to kill the Bull (Nate) (and marketing professionals).
Elliot accidentally let the cat out the bag by serving as a marketing professional. Marketing professionals haven’t taken the time to learn about Facebook advertising or social media.
What Elliot said
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Your company is focusing too little attention on what marketers care about most: driving real engagement between businesses and their customers. In your sales materials, you tease the marketers by promising to help them build such connections. In reality, you don’t often do that.
Your company’s performance in the advertising industry, where you have shifted your attention, is not good enough. Your site is estimated to deliver tens of billions of ads per day. Fewer than 15% of these ads use your growing social data cache to target the right audiences.
Marshall McLuhan captured the essence of advertising in new media when, in 1964, he said “the medium is the message”. In the case of Facebook, the medium for co-ordinating 1.19 billion users, or roughly 17% of humanity per month, is the Facebook news feed of mobile phone and desktop users.
The staggering number of mobile Facebook users is 500 million. reported that in the third quarter of 2013, Facebook generated over US$2 billion, with an average revenue per user of $1.72. Facebook is used by 12,800,000. In Australia, 56 percent of the population uses it.
The boot is now on the other foot. In a survey conducted in 2011, 600 CEOs believed that marketing executives were unable to grow their businesses. In a study conducted this year, CEOs felt the same way about marketing agencies. They lost any confidence in their ability to acquire customers.
Google has the largest database of intentionality in the world, which helps marketers to understand the purchasing intent based on the search results. Facebook now offers ad targeting that is second to none. It’s not necessary to be a professional marketer to target ads at people who are connected to your Facebook page or use it.
With a single click, you can perform precise targeting based on location, interests, relationship statuses, gender, age, and education. A marketer can find out who used a travel application, who has been on holiday within the last week, or who uses an Apple iPhone with specific interests.
Adobe’s Social Intelligence Report was released the same day that Nate Elliot sent his letter. The study, which took in more than 400 million unique visitors, 131 billion Facebook ad impressions, and over 1 billion posts to determine the results of the study, found that the platform drives retail sales. Year-on-year returns on investment increased by 58%. According to the report, Facebook is the preferred platform amongst 5,000 companies that use Adobe Analytics.
Forrester’s findings are a far cry from what we found.
Should we give Elliot a benefit of doubt and suggest that his extreme remarks are backward-looking and have been superseded and surpassed by the Facebook platform features available to marketers and nonmarketers without relying on ad agency?
The marketing industry is changing from the segmented, start/stop campaigns of the past century to the idea that “markets and conversations” are embraced through precision targeting and constant conversations with mobile Facebook users by way of the news feed or other innovations.
The opportunity to sell is created by building a relationship. The marketing orthodoxy is to segment large numbers, even though this can be wasteful. John Wanamaker is sometimes considered the father of modern advertising. He said, “I know half of my advertising budgets are wasted. I just don’t have a clue which half”.
Facebook operates on a completely different model. Advertising appears in newsfeeds that serve communities of friends, including friends of friends. By targeting specific groups and their extended networks, it is easier to reach the right people, but building trust and relationships are essential.
This new form of marketing is accessible to any Facebook administrator, even if they are not among the Forrester respondents. Maybe we’ve been treating marketing as a group of functional people, and not a way to drive business along with customer service.