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Hi Gini,
You'll get no argument from me over the "promoted post", but I might quibble over a couple other items from your otherwise excellent article.
First, I don't think it's accurate to say, "Google's been successful because they keep introducing free features." Why not? Let's do a quick thought experiment: if Google charged users directly (say $0.99/month) while Bing and Yahoo remained free (ie ad-supported), how long do you think folks would stick around? Fact is, it's competition that keeps Google free (ie ad-supported), they have no other choice. (If you want to know why they've become a world-dominator, look to copyright-violation and a look-the-other-way attitude toward piracy... but that's a story for another blog).
Second, in your example of the business with 63,000 "likes" who chose not to use "promoted posts", I suspect (although you may know better) that one of their reasons for eschewing the paid posts was inside knowledge that many of those inflated likes were gamed (ie fakes). Why pay to reach fake customers? Unless that's a major, national brand, that's an awful lot of likes...("likes", we've learned, are indicative of almost nothing.)
I'm not surprised Facebook has turned to "promoted posts" as a way of raising revenue-- its targeted ads have been under assault almost since the beginning. Ever since its Instagram purchase I've argued that the site is basically nothing more than a photo-sharing and music-oriented site for teens-- NOT a serious place to conduct business. That's why I continue to remain skeptical about investing our resources there.
Best,
Stephen
@ltcassociates Hey Stephen! Thanks for the thoughtful response.
I don't entirely agree with your assessment of Google. If they started charging us and Bing and Yahoo remained free, I don't think everyone would move simply because they've become more than search for us. They've become email and documents and storage and calendar and analytics and payment processing and more. And it's all free. They know, in order to keep charging advertisers out the wazoo, they need to keep offering us (the product) more things for free so we're so entwined in how we use them, we'll never leave. Of course, saying never is a generalization as any technology could go away, but I don't think we'd leave for Bing or Yahoo because neither offer the other suite of things we've become accustomed to using in our business and personal lives.
On the Facebook page, it is a major national brand and it's one most of probably "like." My point is that some of those likes probably are spam or robots, which Facebook is being proactive in deleting, but also that it's absurdly expensive to reach those people who have actively said, "I want to read your updates."
Take my business as an example. We have nearly 4,000 likes on our page. We did not pay for any of those. We have done nothing to promote the page (other than have it in the sidebar here). It has grown organically. If we were to pay to promote our posts, it could cost us upwards of $30,000.
My point was that I could either pay an entry level person to join our team with that money or I could use it to promote our Facebook page to people who have already liked our page. I think you know which choice I'd make.
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@ginidietrich Hi Gini,
You'd already won me over with your Facebook math-- it just doesn't add up.
Back to Google: you make a sound case that by this point, the entirety of what they offer amounts to a "suite" with which we've become quite fond of, reliant upon, or plain used-to. Other competitors may offer *better* products, but we'd have to acquire them scattershot, a la carte. That's a competitive advantage right there.
However, allow me to throw one more thought-experiment your way, just for kicks. Pandora and Spotify have both faced uphill battles in the "freemium" world getting free (ad-supported) customers to buy-up to the paid, subscription model where those companies can actually turn a profit. So let's ask of Google: would *they* be able to transition their users from the free (ad-supported) model to an ad-free, subscription model?
Would you pay to use an ad-free version of Google?
I suppose the answer is "no" for two reasons 1) we actually derive value from those ads and expect to find some of our search results in them, and 2) unlike Pandora and Spotify, Google is actually making a bloody mint on ad revenue (cause it doesn't have to pay royalties).
Well, that's how thought-experiments go.
But what about Twitter or Facebook? Would you pay to use an ad-free version of those properties?
@ginidietrich Hi Gini,
All right, let's think about a Twitter or a Facebook for a moment... I feel like you're getting my mind charged up, and I like it : ) If I think of your comment as a Customer Feedback Form, here's what I've just learned:
1) My reticence to bombard you with ads and instead to keep them unobtrusive may backfire as a strategy. Why? Because the easier they are for you to tune out, the less likely you are to ever pay (Twitter or Facebook or whomever) to make them disappear.
2) My customer would pay for business tools which help her grow and expand... and I can create and develop these, but as soon as one of my competitors drops the price to FREE, I'm screwed.
(This phenomenon occurred in the music industry, and was followed by publishing, and decimated the ability of most artists to make a living wage.)
In other words, although you're willing to pay for valuable Hootsuite-like tools, it is also true that many similar tools exist for FREE which depress the ability of the market to invest R&D, then charge enough to recoup and profit. It takes just one to lower the cost to FREE to undermine the entire endeavor (after all, there's a not-insignificant minority online who don't believe in paying for anything...)
What were we talking about...? Ah yes, in my case, I would pay for Twitter, because I'm that kind of guy (I reward companies I use and like whenever there's a "pay as you wish" option), but given the choice, I'd leave Facebook in a heartbeat, since the Catfish comes for all of us in the end.
@ltcassociates OK...on Google. No, I probably wouldn't pay for an ad-free model because the ads don't interrupt my experience. I know not to click on the links in the light orange box at the top of search results or the ones in the right-hand sidebar. I barely see those anymore.
The reason I pay for Spotify is the ads interrupted my experience. I'd be listening to my music and then I'd have to listen to an ad. That drove me nuts. So yeah, totally willing to pay for it to get rid of that interruption.
Same thing on Twitter and Facebook...the ads don't interrupt my experience (yet) so I'm not willing to pay for an ad-free model. BUT I would be willing to pay for some sort of subscription if they could help me filter and grow and create different and new conversations without my having to hustle on my own. We pay for Hootsuite because they give us data we wouldn't otherwise have.
What about you on Twitter and Facebook?
This is fun! You can come by and debate me any time.
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