Facebook can sell soup and lots more if...Tweet
I was rather amused when a Wall Street analyst predicted that Facebook would disappear by 2020. I thought he was dead wrong. Since then a Comscore/Facebook study has been released, Facebook has announced its real-time bidding exchange and has shifted its focus in payments. I think this is just the beginning both for Facebook as a stock and as a powerful platform for marketers. Here's why I'm more bullish than ever about the platform with some thoughts on what Facebook needs to do to really prove that analyst wrong and convince marketers that its integral to their futures -
- Give us real ROI measurement: Most Facebook skeptics (think about a certain auto manufacturer) may not realize that just because the platform measurement isn't as strong as they'd like it to be, it doesn't mean the platform doesn't work as an advertising medium. It is hard to argue against the scale, targeting capabilities and raw engagement that the Facebook platform can provide now. You couple that with a strengthening mobile experience, and you know you have a strong marketing platform on your hands. If I were Mark Zuckerburg though, I'd strike a much deeper partnership with Nielsen, Symphony IRI or ComScore right away so that the measurement ghost can be laid to rest once in for all. For example, I'd love to learn how Facebook engagement can drive brand health and offline sales for CPG brands. I know display advertising and search advertising do that effectively already. I need to be able to do that with Facebook as well. Facebook must invest in this area today.
- Be audacious but stay grounded as well: Wall Street in turn needs to focus a little less on what Facebook is today and instead on what it can become. There's no question that user growth is stalling but that was bound to happen. The world's population growth isn't keeping pace with Facebook adoption. It had to plateau sooner rather than later. When Wall Street thinks about Facebook, they can't just focus on the current ad revenues in the market place today. They need to think about the potential alternative revenue streams through a user base that's so large and so loyal.
I would suggest that Facebook is on the verge of having its iPhone moment. It has all the ingredients to launch something truly transformative the way Apple did with the iPhone (and I don't think it should be a phone). Something so big that it changes the entire company. That's going to happen and it'll lead the next wave of revenue growth for Facebook. Similarly, focused brand initiatives like Shipyard may result in similarly transformative initiatives for brands. However, for Facebook to really tap into this opportunity, it must match its audacious goals with humility. Having just the former or the latter won't be enough. The truth is that cars will still be sold, toothpastes bought and bank accounts opened without Facebook. FB needs to prove everyday to marketers that there are better ways to get consumers to do that stuff by marketing on the platform. In the way that Google has mastered.
- Payments, payments, payments. Did I mention Facebook payments? The revenue potential through payments. All of a sudden, it may put Facebook in the same league as American Express or Visa. Imagine knowing how 800 million people communicate, influence each other and then actually act upon that influence via payments over time. That's the power of the Facebook payments opportunity - in creating a closed loop experience that helps Facebook and its brand partners understand how a consumer goes from a thought to social influence/validation and then on to purchase a hundred times in a year. Once their payment platform takes off (now with real currency), the idea of a Facebook credit card or mobile payment mechanism (think PayPal mobile payment type solution) isn't that far off. Facebook can become an Amex, Mastercard or Visa competitor. I'm excited about this direction. I don't know if it'll fulfill the social commerce promise but that may matter less.
- Fulfill the real-time marketing vision with better insights: Real-Time marketing is about going from insights to action and measurement all in a matter of minutes. Readers of my blog may know my real-time marketing point of view. But there are few platforms that can enable this more powerfully than the Facebook platform. What's missing is access to stronger, deeper and more powerful insights. Facebook needs to open up its insights to brands. It has all the data anonymized. Just make it public or sell it to brands and agencies. Once we have access to those unique insights in real-time, operationalizing against them will be easily and hugely powerful with tools like Buddy Media's platform. This is another area where Facebook needs to invest significantly and quickly. With all the IPO money, it should ramp up its insights function dramatically. Marketers are used to getting a lot more data (anonymous of course)about its consumers. Give it to us. We get a lot of great data from Twitter, we need anonymized data from Facebook.
- Learn more aggressively from others: I'm starting to feel that there's one company that represents the future of Facebook. It is doing a lot of what Facebook can be doing but isn't as yet because of its size and all the distractions that come with an IPO. And that's a relatively small company called Lockerz. They take the user from influencer and social discovery, to content engagement, onto commerce and finally to loyalty all at once. You could argue that they're vertically integrated. Facebook needs to learn from them. I'm waiting for the Facebook rewards system, a smart social commerce framework and mechanisms to connect the digital world more harmoniously and smartly with the physical world (Facebook places has a lot of maturing to do). I'm not totally convinced that I need another verb or "want" button. In a similar fashion, I believe Twitter is an extremely powerful platform. Rather than trying to compete with it, Facebook should think about ways to complement Twitter and dare I say integrate with it too. The same applies to Google Search (Google plus maybe another story)
- More credible public metrics: Last but not the least, Facebook needs to move to more credible public, metrics. I've never been excited about the "like" metric as it is a reach metric that would be confused for an organic, affinity one (the truth is that you can quickly increase likes by purchasing Facebook ad units in a certain way). People Talking About This (PTAT) is also another less credible metric as it is heavily influenced by paid digital media investments. If Facebook has any public metrics, they must be truly credible, authentic and sincere the way the rest of the platform is. Only then will marketers take the platform more and more seriously. The sooner the platform moves in that direction, the better it will be. I would suggest that the metrics need to be so powerful, so compelling and so smartly designed that they travel around the Internet and elsewhere too just as the Like button has. We're still in a world of GRPs (gross rating points) with reach and frequency measures. Facebook has the opportunity to really fix this and maybe bring other major digital players along for the ride, it should take that lead. Is it around virality or more authentic people talk about us? I don't know, maybe.
The next few years are going to be exciting for the marketing ecosystem and Facebook in particular. I for one believe that it'll be around in 2020 but how much of a force in our lives and with our brands depends on the decisions it makes over the next twelve months. Facebook can sell soup and lots more if its as smart over the next twelve months as its been over the last.
Follow me on Twitter (@shivsingh) for more insights on digital strategy and social media.