In the run-up to its ballyhooed IPO (Incredibly Publicized Offering), social media giant Facebook is getting DPNed (Defined Pretty Negatively) in terms of its advertising – read: revenue – potential.
Once around the news media park, James, and don’t spare the horses.
GM Says Facebook Ads Don’t Pay Off
Lack of trust in Facebook may hold back ad sales
Facebook Needs To Take Marketing Seriously
Facebook Ads: What Works, What Doesn’t
And finally, the WSJ again:
The Zuckerberg Challenge
Nobody values Facebook on the scalability of the ad business that generated $3.2 billion in sales last year. The road show before the road show was a Facebook presentation to advertisers in March promoting “sponsored stories” as a new way to shove ads into users’ news feeds. It was, ahem, unconvincing if the idea was to show how Facebook might generate sufficient ad revenue to justify a $100 billion market cap when the company goes public Friday.
The bold approach would be to buy a bunch of media properties as an outlet for the targeted ads that the Facebook engine makes possible. Allayed would be the fear that Facebook, eventually desperate for profits, might pollute its own user pages with ads, driving its customers back to MySpace.
Or Facebook could just start striking lots of deals with media companies, creating Facebook-friendly versions of their products and peppering them with targeted ads using Facebook member data. Facebook would invest its own money in, say, joint ventures with TV studios or newspapers or cable operators, enticing Facebook members to disclose their Facebook log-ins in return for various kinds of ad-supported content.
Whatever the problem, Facebook needs to come up with a solution.
Or wind up Without-a-Tracebook.