So, I’m not sure if you heard…not like you could miss it, but 2 things happened in the last 7 days:
1. GM announced it was no longer going to advertise on Facebook. They aren’t pulling out of Facebook. They will still spend nearly $30M with agencies and partners to create compelling content and experiences for Facebook. But, the $10M a year they spend on paid advertising is no more.
2. Facebook’s IPO finally launched on NASDAQ, but didn’t impress on the opening day and has dropped more than 11% since. I’m not a day trader, night trader or afternoon trader. I can’t pretend to speak about fair IPO pricing, Wall Street Expectations or market caps. But, I can say that I think Facebook’s lagging performance is about more than the over mentioned inability to understand mobile.
Here’s the thing, as Rishad famously once stated, the future cannot be held by the containers of the past. There’s so much truth in that statement. You can’t treat today’s consumer like the consumer from 5 year’s ago, let alone, 20 years ago. You can’t keep trying to make social media your FSI or treating it like radio, print or TV. Heck, you can’t even treat it like digital marketing from 10 years ago. I think the team at Ford really nailed it, when in response to GM’s announcement, they tweeted:
It’s all about the execution. Our Facebook ads are effective when strategically combined with engaging content & innovation.
— Ford Motor Company (@Ford) May 15, 2012
They are 100% correct. Their sentiment isn’t just about Facebook though…it’s about all marketing today. We want great content as consumers. That content manifests itself in commercials (have you seen the Google Chrome ads?), videos (you know, like the Coke Happiness Machine ones), tweet, pins, status updates, print ads (ever watch someone flip through Vogue or Real Simple) and so much more.
The wise marketer today…not just the digital marketer…the wise MARKETER…asks themselves, how can I create content that people can’t wait to consume and then share. And that to me, is engagement at a high-level. You can certainly measure engagement. We do at Campbell Soup and we did at Walgreens. You can create a formula for it and you should. But, you can’t just look at the 1s and 0s. You need to balance the algebra with the conceptual stuff. It’s art and science; not one or the other.
Up until today, I had no idea who Jonathan Salem Baskin was. But, after reading his GREAT article on AdAge titled, “There’s a Message to Marketers in Facebook’s IPO Slide” and more importantly, subtitled, We Must Rethink the Value to Brands of Engagement in Social Media; he’s on my list of people to connect with in real life. The entire article is great and I encourage you to read it. The one salient key nugget that’s so eloquently written and spot on was this:
Facebook’s sole function is engagement. It connects people with one another. Its $3 billion in revenue and $1 billion profit come from advertisers who believe that there must be ways for brands to profit from that engagement. They don’t know how to do it yet. The two hypotheses they’re testing are putting ads around it, and trying to actually host some of it via branded pages interspersed with people pages. There’s no evidence that either yields much beyond nice-to-have benefit, and some experimenters (most recently GM) have given up trying, for now. Again, since Facebook makes money either way, I’d take a small piece of such failure and consider my life’s work a success.
Like Rishad says, the future, or in this case, the PRESENT cannot be held by the containers of the past. If you treat TV like an FSI you won’t be happy with the results. And if you treat Facebook like direct mail, you’re really going to be disappointed. Engagement is a problem, because it’s unpredictable and we have a tough time, as marketers, being comfortable with things that aren’t predictable. We love the FSI, because we know with X circulation and offer of Y, we’ll see Z performance. We love things like TV, because even though TV has dramatically changed in the last 5, 10, 20 and 30 years, our marketing mix models that are based on historical data give us a way to predict success.
Ultimately, it’s our inability to be comfortable with ambiguity makes it so tough for us to accept that engagement is important. Remember this, you can’t have a sale without engagement. Even a direct response transaction…requires engagement. Don’t get mad at Facebook for selling engagement. Get mad at yourself for not putting some rigor around engagement…for not adding some science to the art and for having the wrong expectations for what Facebook can do for your business.