The Marketing Problem with Facebook’s Promoted Posts & Why It Will Live

FacebookMark Cuban is the latest to take Facebook on for its new promoted posts; probably the first brand to shout it out. This recent spree got started when a blog post titled ‘Facebook, I Want My Friends Back’ from the blog ‘Dangerous Minds’ got a wide attention on the web, in October. But let’s dial back a bit further.

A Little Background

By nearly the end of April 2012, Facebook was looking at a good news and a bad news together. The good news was that the company had just topped 900 million active users a month and the number was quickly expected to touch 1 billion (which it did last month). And the bad news was that the company’s first quarter profit fell by 12 per cent.

It was an awkward position for Mark Zuckerberg: A huge, loyal user base that created and consumed content at his website, with far less ways to monetize. He shortly after told TechCrunch in retrospect that the company had been relying too much on HTML5, and that it would shift its focus more to mobile. And he was right at that.

So the problem with mobile really was how you serve your display ad units within Facebook’s single column feeds in mobile devices. And by May 2012, the company seemed to have found a solution, and the promoted posts for brands were rolled out. Posts that are ads. Users won’t feel annoyed of ads (perhaps because they don’t know they’re looking at one) and the brands could selectively promote some of their posts, just like they did with ‘promoted tweets’.

It is a small, but an interesting chain of events since the company went public: a drop in the profit, more focus on mobile, the ‘promote’ button for pages, Facebook’s massive crackdown on fake accounts and likes, and finally the unannounced, but more vigorous execution of ‘promoted posts’. It fits in if you say Facebook pushes for money. And it fits in if Facebook says it wants less spam on the user’s wall.

The Sides That The Partners Take

The company continues to maintain that it’s all against spam and it is not broken on purpose. But the page owners think otherwise. Some call it ‘bait and switch’. Some call it ‘artificial scarcity’ for reach. Whatever it is, they all agree that Facebook has deliberately suppressed their page reach and selling it in bits for dollars. And there is some very optimistic view on this as well.

There have been increasing complaints about huge drop in the reach and the money people were forced to put to keep the ship afloat.

Tip Of The Iceberg?

It’s absolutely okay if Facebook wants to make money, and that’s what a business does. But all this heat was about how Facebook did it. Dalton Caldwell has laid out his perspective on what he calls as Understanding Like-gate in his blog. It makes sense, especially the ‘candidate stories’ generated by Facebook’s Open Graph.

That goes well with the company’s increased focus on mobile monetization. But then, we are really missing something here, aren’t we?

The open graph stories are indeed good candidates for promoting. But they don’t represent the real change we are seeing here. Those open graph stories have not been that visible before, neither are they now. The actual stories which appeared in the likers’ walls, which lack the same reach now, are manual posts/status updates published in the pages’ walls. There is a big difference in the purpose of these two kinds of candidates. And that presents the real problem for marketers in opening their wallets for promoting their Facebook posts.

The Marketing Funnel Cut To Its Bottom

Pay hereThe beauty of having a Facebook page, and the very purpose of it, is that you can reach your potential buyers in all levels of your marketing funnel. You can get to the top of the funnel and do brand awareness campaigns, educate your likers, let them know of your latest offers, perks, features, changes or whatsoever. You could feed them with information and keep them engaged with your page. You could trust your ‘like-base’ for your next viral marketing campaign.

But now, when you could no more trust the ‘organic’ posts to do your marketing, you’re forced to push your page posts down the funnel and look for direct responses; to make the posts worth the spend. You no longer want to invest in building the likes and doing your brand awareness, info-feeding, engagement posts.

With the numbers I have come across so far, it looks like a single post could cost a marketer anywhere between $2 and $6 per thousand impressions (depending on the reach, number of followers, etc.) which compares well against the industry numbers. But the nagging difference is that the other forms of impression ads are conceptually meant for direct responses. So, for the promoted posts to really compare with the rest, the pages will have to cut off the funnel and do more of the direct-response kinds, unless the business has the stomach for more, that is.

But Why Should It Work?

Facebook’s huge strength, you know, is its enormous user base. Whatever combination of demographics you’re targetting, the website almost always has that audience. You could try and guess, but there really is no competitor to Facebook in providing you with the target market as big as it does; a market that is active and is vulnerable to your marketing efforts. More than anything, users want to spend their time there, even crazily.

Twitter has a great size of active users too, but it works best for improving one-on-one relationship with your customers. Plus, the feeds are so fast that you are not that worried about your ‘organic’ posts quickly being scrolled away. And it definitely doesn’t help cover your entire marketing funnel as effectively as Facebook.

The engagement in Google+ is already a big challenge and you don’t have a say in mobilizing your Facebook likers there. Pinterest, Tumblr, whatever alternatives you choose, you know that you are losing it in size and variety.

So, practically there is no competitor with a comparable marketplace to Facebook’s. Not yet. And the ‘promoted posts’ are here anyway. Now, all a marketer can do is either open his wallet for posts that are worth or educate his likers to add him to their interest list and hope that the organic posts work.

Meanwhile, Facebook tries to make peace with the marketers with its Page Notifications and perhaps more effectively with the Pages Feed. Yeah, the annoying numbers in the left navigation might be able to convince the users to click on the button once in a while.

What Marissa Mayer Means to Yahoo!, Its Employees & Users

jdlasica at FlickrThe 17th of July, 2012 had in store a brilliant shockwave for the Silicon Valley with the news of the former executive Marissa Mayer set to lead Yahoo!. People are suddenly listening. The big brand that once helped shape the internet, that once inarguably dominated the search space and perhaps that was some sort of (ironically?) ‘all things digital’ for its users by then.

The hits the brand took later, I suspect if any other brand in the Valley ever stood through. The company is struggling near the point of ‘irrelevance’ today. And Marissa Mayer’s new helm is perceivably a ray of hope for Yahoo!

The Yahoo! Problems

‘Chaos’ is the word. The company has long been indecisive about its products. A more familiar example to me is how it handled its search front in recent years. It never seemed decisive about which direction to go with its search. Yeah, when a company sees five CEOs in two years, that could put the ‘direction’ in deep s**t. It was a big decision for Yahoo! (and a game-changing one for the search industry) to give up its search technology to Microsoft, which the company may regret over time, that’s worth whole another article. But who knew Marissa would take the helm then?

Yahoo! does have its ‘superstar’ products, but it never seemed to care to innovate with them. It lacked behind when other alternatives were growing up fast.

The Vicious Cycle

Remember, it’s not the declining user base that puts Yahoo! in trouble. In fact, it still has 700 million global users and around 100 million monthly unique visits. Its real problem roots to, essentially in recent times, user engagement. That scared away its advertisers towards Yahoo!’s competitors. That resulted in declining quarterly revenues that left investors scratching their nose. That, in turn, took the board to task (at the mercy of Third Point LLC) for a CEO gambling. Hence the demoralised employees, abandoned products which closes the cycle.

What is Yahoo! for Anyone, Anyway?

YahooThis question, many listeners believe, is something that Yahoo! itself doesn’t have an answer to. Is it a portal? A media company? A tech company? A search engine (hmm.. almost no)?

With each CEO, the company’s vision appeared differently – from advertising to data to content to commerce to media. Yeah, that’s some great morale!

But a company with great visions, which I believe Yahoo! still is, needs to define itself. Of course, it is perhaps the most careful step for Marissa to take (which requires time), given the present state of mess Y! is at. But the brand does need a definition – if not now, pretty soon down the line.

David Filo, a co-founder of Yahoo!, spells this out:

“In the last few years, given the turnover, there has been a lack of attention on the user experience. We need to get back to basics.”

Marissa’s Y! Challenges

Some think she is a good fit, and some not. But Marc Andreessen has a point on this. Yahoo! probably needs a product leader now more than ever.

One important concern her critics put forward is her lack of experience leading a giant, essentially when she has had two contrasting reputations at Google. But, all that is not going to matter anymore. The question now is whether she will resemble Steve Jobs or her former colleague Tim Armstrong.

The Charges

As for the Y! board, it apparently has had its ‘Brahmastra’ shot at its top job. Eyes on the results now.

Employees – well, they have their own expectaions, like here. But finally they’ve got someone they would want to work with, perhaps. Yes, they’re tired with new CEOs. But this one seems to have brought a hint of hope to them. Nevertheless, they would love to hear the company ‘defined’.

May be it doesn’t matter to the end users. They probably liked how Yahoo! was ‘all things’ to them. May be they just want their awesome flickr back, as with its many other products.

Of course, I’m no aggressive Yahoo! fan or a loyal user. I don’t live in the US and have no economical impact whatsoever. But I’m one who has been on the internet for over 11 years and whose one of the first known brands on the web is Yahoo! And I am certainly interested to watch whether and what Marissa has to save the Internet Dinosaur.