Marketing Technology for Growth

THIS JUST IN: Facebook's Still Got Its Mojo After IPO

facebook ridiculed for IPO

“It was the best of times, it was the worst of times.” All Dickens aside, this could be a quote from Zuckerberg reflecting on the events of last Friday. After presiding over a tumultuous but nonetheless historic IPO, the Facebook CEO rounded off the day by marrying his longtime girlfriend Priscilla Chan. In the days leading up to (and in the days since) Facebook’s public stock offering, the news media and blogosphere have been collectively writing Facebook’s obituary. Concerns over stock valuation, mobile strategy, user stickiness and monetization prospects have been legion, along with a healthy dose of skepticism over Zuckerberg’s ability to lead a $100 billion social enterprise.

In short, as far as historic IPO’s go, this one was a real downer.

If the tech pundits are right and Facebook is really a waste of time and money, you might as well sell off those newly-minted Facebook shares at any price you can get, rekindle your My Space account, and start trying to figure out Google Plus.

I would suggest otherwise.

With over 900 million users worldwide (half of whom are accessing the social media site via mobile), strong monthly user engagement figures (averaging 441 minutes, or over 7 hours), and flush with 16 billion in IPO capital (for you non-math majors, that’s 16,000 million), I’d say Facebook is just getting started.

If you need more convincing, read on as I attempt to debunk the principle arguments of the Facebook naysayer class.


The general argument here is that Facebook’s user base has reached a high-water mark, and will slowly recede as other social sites and technologies lure subscribers to greener pastures. A similar riff on this theme has Facebook overturned by a hipper, cooler social networking site that speaks to the Millennial generation and younger.

The numbers tell a different story.  According to the prospectus Facebook submitted for its IPO, the social network had 845 million monthly active users (MAUs) as of December 31, 2011, representing growth of 39% from 608 million a year earlier, and 135% from 360 million at the end of 2009. In addition, daily active users (DAUs) increased 48% from an average of 327 million in December 2010 to an average of 483 million December 2011.¹

Moreover, according to a Socialbakers’ analysis from January 2012, Facebook grew 7 users per second in 2011.¹

That’s 14 new users in the time it took you to read that last sentence.

As for the cool factor, it turns out that Facebook is appealing to the young and old alike. Data from Socialbakers’ shows that the amount of Facebook users aged 65 and older grew 52% in 2011 to reach 19 million, matched by 52% growth among users aged 16-17, who numbered 66 million. Adults aged 18-24 made up the largest demographic on Facebook, at 248 million, but grew a relatively smaller 32%.¹

Appealing to blue hairs, adolescents, and hipsters alike has its own cool factor, if you think about it.

In terms of stickiness, i.e. the tendency of users to keep coming back to a site on a regular basis, Facebook’s daily active users (DAUs) increased 48% from an average of 327 million in December 2010 to an average of 483 million December 2011.¹

Pretty sticky indeed.

And then there’s the point nobody likes to bring up. Who’s going to take them on, Google Plus? Twitter’s 140M-ish users are great and loyal (I’m one of them), but in my humble opinion, Facebook and Twitter are offering a sufficiently different user experience, and as such are not in direct competition. LinkedIn is awesome for business networking, but it isn’t structured for the after-hours experience. Pinterest is a great social-visual tool for personal and business use, but again, its very model is its limiting factor.

That leaves us with Google Plus (Insert cricket chirping here).

According to a new study released by RJ Metrics that culled public data from a random population of Google Plus users, the average G+ post has less than one “+1,” less than one reply, and less than one re-share. Moreover, 30% of users that make a public post never make a second one (ouch).

And let us not forget the infamous comscore findings from last February showing that the average Google Plusser was engaging with the network only 3 minutes per-month.

If Google, the most beloved tech company in America, can’t take Facebook on, I don’t see any immediate threat on the horizon.


Many would-be pundits, me included, have always pointed to Facebook’s lack of a search engine as a limiting factor to future staying power. Admittedly, they’ve done pretty good without one, but let’s entertain the idea for a moment.

Search Engine Watch recently cited a survey by Greenlight which found that 48 percent of respondents dislike the idea of Facebook launching its own search engine to directly compete with Google and Bing.

However, Greenlight’s survey also found that if Facebook launched its own search engine, it could potentially grab 22 percent of the global search market share and become the second most used search engine in every major market except for China, Japan, and Russia, where it would rank third.

"It wouldn't need to be a spectacular engine either, just well integrated into the Facebook experience and generally competent,” said Greenlight Chief Operating Officer Andreas Pouros.

By my calculations, 22% of the global search market would work out to roughly 1.5 billion searches on a Facebook search engine each day.

I wonder if that would positively impact its bottom line…


The generalized fear that Facebook’s ad monetization strategy will fail because fans do not want to be advertised to contains a grain of truth. In fact, most don’t. At least not in the traditional, here’s a banner ad next to your News Feed sort of way.

According to a May 2012 poll by the Associated Press (AP) and CNBC, 83% of Facebook users in the US hardly ever or never clicked on online ads or sponsored content when using Facebook.²

These fears were stoked when GM dumped its 10M in sponsored ads (they still spend 30M to Ad agencies for FB brand marketing).

This entire argument is a big media canard operating under an outdated push marketing premise.

Social media ad spend, especially for bigger brands, is most effective when it is used to build an online following and provide a context for deeper consumer engagement. This approach is especially effective when brands include a targeted, geo local focus to their ad campaigns. This is where Facebook’s ultra- fine-tuned ad targeting data machine can really benefit advertisers.

Put another way, for every GM, there’s a Pepsi.

Pepsi is a great example of an established brand that has created a cutting-edge social strategy, effectively utilizing five critical aspects of social media marketing: consumer engagement, user-generated content, data aggregation, geo-local, and inbound marketing.

Engagement models aside, many big media types are really teed off that Zuck and crew are not courting them. Facebook has been less than accommodating to big agencies ready to plop down millions to access its trove of user data. Why? It goes against Facebook’s strategy. They know the future is in social mobile local context-based, mobile-enabled marketing. This type of geo-local ad targeting is often best suited for small businesses.

The responses of more than 100,000 Facebook sellers surveyed by Payvment, which provides a Facebook ecommerce platform, confirm this point. The survey showed Facebook sellers are doing their part to fuel Facebook's projected $5 billion in ad revenue this year. More than a third of respondents (39%) reported having used Facebook Ads to drive traffic to stores. Nearly 70 percent of that group said they plan to use Facebook Ads again.³

Sellers cited effectiveness in fan and customer acquisition as their top reason (68%) for planning more Facebook Ad campaigns. Other reasons included the ability to start and stop campaigns (60%), Facebook's targeting capabilities (60%) and Facebook Ads' ease of use (55%).³

Put that in your pipe and smoke it, Madison Avenue.

Moreover, Facebook’s Groupon-like Offers platform provides small businesses a less invasive form of geo-local based small business advertising, and unlike Groupon’s services, it’s free.

Finally, Social Media Examiner’s comprehensive 2012 Social Media Marketing Industry Report of over 3,800 marketers confirms that more than 90% of marketers surveyed plan on using Facebook Ads in the future.


With 488 million active mobile users, to say Facebook’s future lies in mobile would be an understatement. However many experts have worried that Facebook has not clearly outlined a viable mobile strategy moving forward.

Happily for Facebook, it has a head start on the competition. As cited above, in March the average Facebook mobile user engaged with the social network for more than 7 hours, according to comScore. US social mobile users spent more time on Facebook on average than Twitter, LinkedIn, Pinterest, Foursquare, and Tumblr combined.

Social Media Mobile

Facebook is "just getting started" with its mobile app, said Zuckerberg, who explained last week at an investor event that as Facebook collects more specific data, such as which friends "like" certain products, mobile ads will be better targeted to users.

The social network is building a mobile empire one company at a time. Recent acquisitions of Instagram, Lightbox, Tagtile, Glancee, and now Karma confirm Facebook is serious about mobile.

With a huge capital injection, and a big head start, I wouldn’t bet against Mr. Zuckerberg on this one.


I’m no Wall Street insider, but for my money the data, and the future, favor Facebook. So why all the negative press? What gives?

Part of Facebook’s problem is that Mark Zuckerberg is the CEO you love to hate. His wearing of the hoodie when he was supposed to be glad-handing Wall Street bankers is emblematic of this point. Most of us were introduced to Zuckerberg the man from the movie The Social Network, where he was portrayed as a snarky, backstabbing, arrogant, nerd., a website that collects consumer opinions posted on social media, found that 69% of over 3,000 social media users polled “hate” Mark Zuckerberg. Many referenced his arrogance.

Of the 31% who “love” Zuck, the responses were often tepid at best. One such response: “he’s not as insanely greedy as he could be.”

Well, you’ve got to start somewhere.

If anything, the fact that Facebook has become so enmeshed in society and has remained as popular as it has with the anti-Steve Jobs at the helm suggests it’s here to stay. Imagine Facebook’s popularity with a charismatic Jobs-esque, i.e. god-like, leader at the helm?

After all, somehow even Google’s Larry Page and Eric Schmidt have managed to create the most well-liked tech brand in America (side note-to someone who reads about the shenanigans of big tech companies every day, Facebook seems to feel fairer and look fouler, while Google looks fairer but feels fouler, if that makes sense).

My advice to Zuck? Hire a good PR firm, and try not to laugh too hard on your way to the bank.


What do you think of Facebook's prospects for the future? Chime in!


¹ Marketing Charts, “Facebook Ad Revenue Grew 69% in ’11, Now over 3B

² eMarketer, “Is there a problem with Facebook Advertising?”

³ Business News Daily, “Facebook Ads Have Big Fans Among Small Businesses

Graphic Courtesy of PC World 

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Topics: Facebook, Marketing Technology Trends