Now that Facebook is public, will priority shift from pure innovation to a focus on investors? What impact will enhancements to their current revenue streams have on brands?
Now that Facebook is public, there is a big question of whether its top priority will shift from pure innovation to being a focus on keeping investors pleased. Bearing in mind that money is every investor’s core motive, Facebook will have to work on ways to further enhance its current revenue streams as well as design new/innovative approaches to enhance its business model.
Facebook’s first target for generating more revenue will naturally be advertising, but what will that mean for brands and their Facebook presence and strategy?
More ad categories and better targeting – We have already seen Facebook expand its categories of ads, such as the premium ads that are displayed on the logout page.
Below is an example of a recent ad for Titanic 3D.
Facebook will likely continue to develop new advertising formats as well as increase integration via other channels, such as mobile. Complementing better ads will be enhanced targeting capabilities, which is a plus and will allow marketers to focus their campaigns more effectively and ultimately improve conversion rates.
Engagement will become much more difficult in time – Although generating more revenue is a huge goal, the issue at hand is whether Facebook’s strategies/tactics will have negative or positive results. This will ultimately depend on the magnitude of added functionality/features as well as the rate in which they are released publicly. Plain and simply, if Facebook implements more ad formats, more features and so on in a short amount of time, there will certainly be undesirable effects such as creating clutter and hindering engagement. More clutter will overwhelm users, which in turn will affect the visibility of content that brands publish, as well as their level of engagement with followers.
Considering that the true value of having a Facebook/social media presence is tied directly to engagement, if it is hindered and becomes more difficult, where is the value?
Additional Fees – It is rumored that Facebook is considering charging brands for the use of certain features such as highlighting posts. Also, there is buzz about the testing of a new feature in New Zealand that makes comments more prominent on a user’s news-feed.
Although this still remains to be seen for sure, the probabilities are definitely high due to the recent IPO. In time, it’s entirely possible that brands may even be faced with premium subscriptions to have access to fully functional pages.
How do you think brands will react? What are the implications for small businesses?
Over-saturation – In many ways, Facebook’s IPO legitimized social media as a sustainable business model. But as more Facebook pages are created and more money is allocated toward social media marketing, a potential result is over-saturation. Combined with the likelihood of Facebook implementing various new features in the near future, the ability to engage and stand out from the crowd will become more challenging.
Though Facebook will surely not complain…are marketers going to have to rely on advertising much more in the future to gain the attention of followers? As we discussed recently about Twitter, variations on brand payment requirements are still evolving.
We understand that any social platform is an entity in a state of flux, which makes keeping on top of changes and developments more important than ever for brands. If you don’t know how to make strategic moves you can’t play the game. If you have questions, comments or concerns or would like to discuss this in further detail, because rest assured this is only scratching the surface, please feel free to post them here, on our Facebook page or via Twitter.