The trouble with Facebook, as we have said before, is that it is a social network that now has to become a commercial one. The only logical way it can make money is by exploiting its users in some way. That is inherently anti-social. Its users are its asset. The only sensible route is the advertising route. Now, with half their users accessing the site via their mobiles, mobile advertising is their nirvana. The question is how to do it.
As this excellent WSJ article points out:
The crux of advertisers’ doubts centers on whether Facebook ads actually sell goods and if they can be measured in a way that can be compared to other forms of advertising.
Facebook needs to keep experimenting until it finds its ‘thing’, its angle. ‘Likes’ are not the ‘thing.’ People ‘like’ fast cars, but most people do not go out and buy them. One new experiment which seems to be working is a model where Facebook gets app developers to pay it to drive traffic to their apps. This is good, but how Facebook persuades big brands that they have the ‘thing’ is going to be difficult. For big brands, ROI is the ‘thing’ and ‘likes’ do not produce measurable ROI.
They need to do it fast – a survey embedded in the WSJ article says that 85 percent of people do not believe that Facebook ads work. This, when combined with a BillingViews survey late last year that said that 85 percent of our survey group would not buy something on Facebook puts an extra gigabyte of urgency into the company’s search for the ‘thing.’