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Gini Dietrich

Five Things Facebook Must Do Now that They’re Public

By: Gini Dietrich | May 21, 2012 | 
61

It’s been an interesting few days in the social media/tech world.

Facebook went public, began trading at $42.05 (and then dropped to it’s original $38) per share, and it’s founder, Mark Zuckerberg got married in a surprise wedding that was supposed to be a celebration of his now wife’s graduation from medical school.

Named the 29th richest man in America, Zuckerberg now shares that fortune with the woman who has been by his side since college.

But both his personal and work lives have simultaneously gotten harder (remember your first year of marriage??). While maintaining majority ownership in the social network, the 28-year-old (and I thought I was hot stuff at 28!) must now answer to Wall Street, which means the $1 billion they made in profit last year must increase.

Just a few days after GM announced they’ve dropped their Facebook advertising (and Super Bowl advertising too, it seems), the social network must pull itself together and begin offering even more to users and advertisers (which means more changes…don’t freak out) or it will end up going the way of AOL, Netscape, and MySpace.

  1. Mobile. My own speculation on the Instagram purchase last month is not because Zuckerberg thinks the app cool (it is), but because the team there has figured out mobile; something that has escaped Facebook developers. Rather than invest a bunch of time and money into creating a mobile app that works well for its users, why not buy one that already has 25 million users? It gets them closer to the one billion user mark they’re striving toward and it allows them to incorporate the picture-sharing mobile app.
  2. Search. I’m not talking about competing with Google. Let Google own search; it’s the one thing they do really well. I’m talking about social search. When Facebook introduced search in the groups, I was singing hallelujah because it is now easier to find conversations for blog writing, content creation, or even just proving someone wrong. What would be really great is if they create a search for our own pages, to start. And then move it to making it possible to search, based on your own personal network. Google and Bing already do this with your online experience. Let’s hope Facebook catches on, too.
  3. Sponsored Stories. This is one of Martin Waxman’s favorite Facebook money-making tools. While we all intuitively know sponsored stories are highlighted by our friends because a company has paid us to do so, he believes we’ll make purchase decisions if we see multiple friends talking about the same product or service. I agree.
  4. Big Data. With nearly a billion users around the globe, think about the insights they have regarding what we like, how long we watch videos, what TV programs are popular, and how long we stay on certain sites. If they package those insights into something more valuable than what they provide now, marketers will feel like they hit the jackpot. It’s a huge growth opportunity for them, without a lot of effort.
  5. Impulse Buying. Right now you can buy more fruit for your Farmville farm with Facebook credits, but we can expect this will expand to include pretty much anything we want to buy. Many big brands opened Facebook stores and then quickly shuttered them because no one was buying, but I expect this will change. We’ll soon be buying music, shows, books, gifts, and even consumables with the click of a Facebook like. A more powerful version of iTunes, if you will.

Where else do you think Facebook must grow in order to make money, keep users happy, and satisfy Wall Street?

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, a Chicago-based integrated marketing communications firm. She is the lead blogger here at Spin Sucks and is the founder of Spin Sucks Pro. She is the co-author of Marketing in the Round and co-host of Inside PR. Her second book, Spin Sucks, is available now.

57 comments
Andrea T.H.W.
Andrea T.H.W.

It seems, at least for now, that I wasn't that wrong about FaceBook IPO being a bubble. I mean it worked for the original shareholders who got rich at the expense of investors but I really wonder if they'll ever see their money back. And with the investigations being run I'm sure something else will come out. Do you imagine how much money and time will be thrown away if FaceBook closes or goes the MySpace way? Well, probably Google would be pretty happy even if this doesn't mean that its ghost town G+ will begin to be populated. Oh well, there is still Twitter. :)

 

Happy weekend!

ExtremelyAvg
ExtremelyAvg

I just thought I'd pop back and mention that FB may be in a small measure of trouble. Their stock, on day two, closed 18% below its launch price of $38.00. It also seems that the regulators are looking into the IPO.

 

I don't really care one way or the other, but it is interesting. Who knows, maybe it is a bargain, now? (Note: I am not now, nor have I ever been a stock picking guru. Taking stock advice from me, if I had given some, which I didn't, is about as wise as covering your torso in honey and running past a bear who has awoken from a long winter slumber and is considering his lunch choice.)

Andrea T.H.W.
Andrea T.H.W.

Sorry Gini but Google does searches well? If with well you mean relevant then you're probably talking about Bing these days.Google lives on what it did years ago and because across the world people still think that it provides reliable results but actually Google provides a little more of paid results, if you're able to find them between ads. :)

 

FaceBook, well, we'll see if it's not another bubble as it takes just a legal action toward their privacy opinion and the use of users' data and it will crash. Also it's not making real money yet right? I think sooner or later Zuck will be forced to move to a paid subscription and we'll see what happens.

 

It can do well with social people who are interested in social networks and would care about social search results and play Farmville but transforming this into real money is another matter. For searches those who are not into social will stick with normal search engines as the opinion of my dentist isn't that relevant if I want to buy a car unless he owns one and still then it's just his opinion. Also because like with Google how many are into FaceBook because everyone is there and how many are because they like it is still to be known. Like Google + accounts I mean.

 

But what I think Zuck has deeply underestimated is how much decisional power he has lost in the hands of investors and shareholders. FaceBook is not Apple and Zuckerberg is not Steve Jobs. And if I remeber well even Jobs has been fired.

 

Well this things is going to be pretty interesting. :)

bdorman264
bdorman264

Maybe Zuck could go on Saturday Night Live again? Just sayin'.......

Howie Goldfarb
Howie Goldfarb

I agree with your basic premise here Ms @ginidietrich They already lost $12 bil in market cap today so Mark is now the 34th richest at the moment. Revenues have decelerated. This has a lot of people nervous. And with user growth in the US only 4% last 12 months they will be adding people with much less $$ to spend. I would think a user in the US is worth as much as 10 in India. Something to think about.

 

I have one issue with Search. Twitter is better for search. The reason is Twitter is a public platform. Facebook is 70% private. So curious how they will work out social search with so much 'protected data'. And when I go to any platform for help I get none because no one sees my cries for help in their cluttered feeds LOL

 

My biggest red flag for all this is that today in an AdAge article bashing G+ they stated we spend 405mins per month on facebook. per user vs 3 mins for G+. That is down to 13mins per day from 55mins per day in 2010. Maybe it is due to mobile usage not being recorded? I bet on mobile people spend much less time. The problem with mobile is pages suck on mobile and it becomes more of a mini comm system. I don't find the mobile app as mobile friendly vs what the web version gives me compared to how the twitter apps do.

TheJackB
TheJackB

 @ginidietrich @jasonkonopinski Some sort of combination of impulse buying, mobile and Apps is where I see a sweet spot there.

People will spend a buck or two without a second thought on things like Apps, charities, coffee. Make it simple to point, click, spend and move on.

 

My friends and I often kid around about developing an app and then selling 50 million copies of it for a .99 cents a pop. We aren't the only ones. There is a lot of money and a lot of smart people thinking about that too.

 

If FB opened that up and took a percentage off of each purchase it might offer an opportunity to make shareholders smile.

Latest blog post: The Coolest Father Ever

martinwaxman
martinwaxman

Thanks for the shout-out @ginidietrich. Mobile is a big one for me, too.  And it's getting better.  I also think FB could let people organize the companies they like into a virtual mall - and that's where #5 comes in. In some ways, this is like Pinterest boards, but it would populate with your favourite stores and businesses - under one roof,so to speak. You could interact with them, see what's new, hear about specials, virtually meet friends, buy things or just share.  But hey, I've always been drawn to malls... 

Todd Lyden
Todd Lyden

I dunno about number five- gimme some justification for this...

jasonkonopinski
jasonkonopinski

Related to #3 is what Facebook is testing in NZ - individual users paying $2 to boost exposure on individual posts. I suspect it may fall flat, but then again, human beings are a vain lot. ;) 

TonyBennett
TonyBennett

I'm of the opinion that #3 and #5 have the most potential to become profitable. If you're like me, you've already come to grips that online privacy is non existent, so I wouldn't be all too surprised if they started to slang more of our "insights" to others. And to the fifth bullet, make things easy to buy and we'll usually find a way to justify clicking that order button!

blfarris
blfarris

If you can measure brilliance based on the money someone has made Zuck is a genius. But I also think he's selling near the top. I'm not saying that FB usage is about to plumet (it's not) but I'm not seeing that people are as compelled to be there as they once were. (I closed my account a few months ago -- so maybe I have a warped perspective.)

 

I may be wrong, and FB finds a way to improve their relevance to users and advertisers alike. But for now I see them as one of those things people will talk about at their HS reunion in 20 years.

ginidietrich
ginidietrich moderator

 @HowieSPM I agree Twitter is better for search, but I'm not talking about search of the web. Let's leave that to Google. I'm talking about search inside Facebook. It sure would be nice to be able to search for our Facebook questions of the week without my having to scroll and scroll and scroll.

ginidietrich
ginidietrich moderator

 @faybiz Let's say I read a book and I loved it (not Fifty Shades of Grey). I post about it on Facebook and I automatically am given an affiliate link so I get credit for any of my friends who buy (or download) the book. You can do this for almost any product: Toothpaste, detergent, books, movies, flowers... 

ginidietrich
ginidietrich moderator

 @jasonkonopinski I think it'll fall flat in the U.S. anyway. We're so accustomed to not paying for anything. But where we should watch what's happening is in places like Jakarta, where Facebook is used by something crazy like 99% of the population.

ginidietrich
ginidietrich moderator

 @SociallyGenius Right? Think about it this way. I go to see The Avengers (which was great!) and I post about it on Facebook. You think, "I really want to see that, but it's always sold out." There is a link right there, on my page, for the theater nearest you. You can buy tickets and surprise Mrs. B for a movie date night out.

ginidietrich
ginidietrich moderator

 @blfarris I see it differently, but perhaps it's because I still use Facebook multiple times a day. I think it's one of the few social networks that continues to find relevance, simply because they keeping growing and adjusting. 

Andrea T.H.W.
Andrea T.H.W.

 @ginidietrich Well surely it hasn't been a flop for Zuckerberg and his friends but it would be interesting to know if Warren Buffet bought any share, this should give an idea if the IPO was a bargain only for its original owners.

 

And now it will be very interesting to see the fight between shareholders and Zuckerberg on FB management as I guess shareholders want earnings. Well I guess all those bucks will repay Zuck of having lost control of his creature and at the end he's been the one who sold it for money. Interesting times ahead. :)

Andrea T.H.W.
Andrea T.H.W.

Yes but you haven't answered about Google and searches. ;) Net profit? And divided by its users are more or less one dollar per user per year right? Considering also all those information it solds to third parties. As for now your little business is probably doing better, with the right proprtions. ;)@ginidietrich 

Howie Goldfarb
Howie Goldfarb

 @ginidietrich how would that work and sorry about my rant above I was in the midst of monday morning multitasking frazzledness.

 

You would go into facebook and search for the question of the week and a list would show up? Because yes having to scroll like you say is not very user friendly. In fact that would solve the VW case study I sent you. Instead of VW having to comb through comment threads with 100's or 1000's just to find the 25 angry customers they could do a search.

Howie Goldfarb
Howie Goldfarb

 @ginidietrich  @martinwaxman thus my twitter list for brands. I actually have to go in an remove half the fan pages I belong too. I spend so little time on the site I really want just to see my friends and anything by Arment Dietrich.

 

But I bet removing brands from the feed completely might actually increase traffic to the brand pages. I would love a flipboard style location with say 3 x 3 or 5 x 5 and each box shows the lasted post or three so I can browse them all at once. That would be uber. Better than the web or bookmarks etc.

Todd Lyden
Todd Lyden

 @ginidietrich still dont see it and i just read about a company doing what you are suggesting... completely different from the "store" model to just getting something for promoting the product online "getglue" is a good example for TV/movies etc-

jasonkonopinski
jasonkonopinski

 @ginidietrich Probably, yes, but think about how frequently we buy apps at the $.99 - $1.99 price point. They're low risk purchases so people tend to spend indiscriminately. App sucks? You're out $2.  I can't see FB throwing a lot of $$ into promoting it, but vanity is a powerful driver of behavior. 

 

One practical application I can see: individual fundraising campaigns. Lisa and I are active with Relay for Life. If throwing $10/week at promoting events via a status update gets us over the line with fundraising goals, I'd call that a success.  

TonyBennett
TonyBennett

@ginidietrich exactly! But are you babysitting for us?

Andrea T.H.W.
Andrea T.H.W.

 @ExtremelyAvg  @ginidietrich Well, not everyone is interested in using the best tool available. :) I use either Bing or DuckDuckGo even if they will never catch Google and I'm not either a friend of Microsoft. I jumped on Open Office as soon as it was created. I'm not interested in what everyone does but in finding the best answer to my question which is also why I'll probably never use social search.

 

If I had the chance I would have used the other keyboard and not QWERTY, but that's me and I've always found the alternative way of doing things more interesting. If all the world uses Google but @duckduckgo  is better I will use it whatever the world thinks about it. :)

 

The last post of @TheSalesLion addresses Google and DuckDuckGo in a very interesting way.

 

Thanks for the interesting reply. :)

ExtremelyAvg
ExtremelyAvg

 @Andrea T. H. W.  @ginidietrich I did a test of Bing. I Googled several things using the Bing search engine. When I did my blog handle, Extremely Average, almost all of the results were related to my writings. I then did "Bulgarian Ratapult", which is a phrase I've used a couple of times and it found them again. The last, and most crucial test, I typed in "Howler Monkey Angst", which I use all the time (Often here on Spin Sucks) and three of the top six were posts I've written.

 

It was very impressive, Andrea. That being said, I'll probably never use it again.

 

Everyone uses the QWERTY keyboard and yet there was another keyboard created that outperformed QWERTY every time it was tested. Bing will not catch Google, nor will it ever be a verb.

Howie Goldfarb
Howie Goldfarb

 @KenMueller  @ginidietrich  @martinwaxman no I meant my own feed. I am a passive Facebook user. When I do log in I check most recent stories and will view the first 20 or so. Then I am done. So any friends or brands who post if they aren't in those 20 never get read.

 

Before I left facebook for the most part each day I would log in and see 300+ updates waiting for me. This is no different than twitter, That feed is flying by with tweets I will never see. So all those tweets from you Ken and Gini praising me non-stop I don't often see. Kind of sad I know.

KenMueller
KenMueller

 @HowieSPM  @ginidietrich  @martinwaxman Well, I'm talking about subscribing not to the brand, but to brand created lists. 

 

I honestly have no feed issues. I just checked the analytics for five clients and they all have had increases in engagement since the switch to timeline. There is a shift in how that engagement happens, but it is an increase. They've also seen a higher regular rate of new likes, with one exception.

Howie Goldfarb
Howie Goldfarb

 @KenMueller  @ginidietrich  @martinwaxman Gini I actually posted photos of vermont this weekend or friday or something like that.

 

Ken I knew about the subscribe feature, but not in the way you mentioned for brand pages. The curation/feed volume issues are still big issues.I blogged about how hard it is to get through (you really have to condition people to come to you vs being passive). A friend said he gave away stuff like dinners and gift certificates and would have almost no entrants and was afraid to post again so he wasn't spamming. I said 'You are kidding right? You couldn't spam anymore if you tried'. But I bet his fans would subscribe just to see these giveaways.

 

We just have way too much content coming in from all sources and platforms and so little time. I barely keep up with Gini's pinterest activity as it is.

KenMueller
KenMueller

 @HowieSPM  @ginidietrich  @martinwaxman This is exactly what I do with Facebook lists. I have one that is just my clients. Click. I see all of their updates easily. I have one for local businesses I like and want to support. And I have a few others that makes it really easy for me to see what they are doing. And as a result, I share a lot more of their content as well. 

 

One untapped resource that Facebook has is that businesses can create their own lists that people can subscribe to or follow. I haven't found a business yet that uses this feature well, mostly because they don't know it exists. but it would be a great way to provide a service to customers by promoting a variety of local businesses.

ExtremelyAvg
ExtremelyAvg

 @rustyspeidel The other day I bought something from an ad on a blog. I don't do it often, but when I do, I like knowing that the blogger earned something.  I don't mind being recommended stuff by Gini at all.

Latest blog post: Voices in My Head

ginidietrich
ginidietrich moderator

 @rustyspeidel If you're an Amazon affiliate, you're already shilling. It's illegal in IL or I'd totally do it, as many books as I recommend.

KenMueller
KenMueller

 @HowieSPM  @rustyspeidel  @jasonkonopinski  @ginidietrich  @geoffliving See, I never would have paid that. Not then, not now. Not for Facebook. I'll pay for Netflix, but not Facebook. And I won't pay that for Apple either. 

 

And very few of my clients will use the ads. My goal is to steer them away from that and create a better experience on their pages and overall online presence so that they don't need the ads. The combo of making them money, while also saving them money is enough to keep them coming back. 

Howie Goldfarb
Howie Goldfarb

 @KenMueller  @rustyspeidel  @jasonkonopinski  @ginidietrich  @geoffliving I blogged in late 2009 when facebook has 400m users and people spent hours a day on the site that they should charge $3 a month, eliminate ads and brands and at that time I would of paid for sure. If only 200mil paid up that was $7.2bil and a 314th ranking in the fortune 500. I thought the ad model was crazy. I felt reinvest that money in the user experience vs the brand and marketing experience. Apple does this. We pay $100 a month for phone/data service. What is $3 if the comm platform was amazing.

 

Fred Wilson told me 'Won't work people won't pay'. Sorry but I was right back then and still am. Though it is too late. The experience to me degraded vs improved by letting the brands in the way they did and the forced sharing they have worked on. They could of sold the listening data to brands on top of that revenue. And today they don't have $7bil in revenue yet (last time I checked or are they there now?)

rustyspeidel
rustyspeidel

 @jasonkonopinski @ginidietrich Kickstarter already does this with music and arts projects, but I can TOTALLY see Facebook taking it on as part of their events area. Maybe they keep 5% for fees. It's easy, transparent to the contributors, costs Facebook nothing to develop/deliver. I also see events becoming threshold driven--"if 50 sign up by x date, it's a go. 48, no-go." The social pressure will work like Groupon.

TonyBennett
TonyBennett

@ginidietrich I'm pretty sure you're in the wrong biz then, Gini. I bet desperate parents would pay more than your current clients do!

ginidietrich
ginidietrich moderator

 @SociallyGenius  I totally am. I can get any baby to sleep within minutes. Just did it yesterday, in fact. Keep that in mind if you ever need my services.

TonyBennett
TonyBennett

@ginidietrich OMG! Did you just refer to yourself as the baby whisperer?!? That just made my day, and potentially my week!

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