Facebook Sets Its Sights on Advertisers: The World's Largest Social Networking Site Ups the Ante on Its Offerings
Aquino, Judith, CRM Magazine
With more than 900 million active users who produce at least 3 billion comments daily, it is difficult to ignore Facebook as a marketing platform. Despite a disappointing debut as a public company, the behemoth social network has dusted itself off and is now accelerating its attempt to woo advertisers. On May 17, the day before its stock imploded, Facebook announced it had raised $16 billion in an initial public offering, valuing the company at $104 billion. It is the largest Internet IPO in the United States to date and the third largest in the world, after Visa and Italian utility firm Enel SPA.
The next day proved to be even more dramatic. Due to a technical delay at Nasdaq, Facebook's stock, under the symbol FB, hit the stock market a half hour later than expected. Concern that Facebook was overvalued also pushed its stock down by as much as 32 percent from its IPO price of $38 the day before.
The following week, investors sued Facebook, along with Morgan Stanley, Goldman Sachs, JPMorgan Chase, and other underwriters, claiming that Mark Zuckerberg's company and its underwriters did not publicly disclose lower revenue estimates before the share sale.
Even though the IPO debacle has been a huge headache for the world's largest social networking site, Rohit Bhargava, senior vice president ofglobal marketing strategy at communications agency Ogilvy, thinks Facebook is more concerned with finding additional ways to monetize its site.
"I think the broader question is, will marketers really see the need to spend money on Facebook when so much of what they can already do and the engagement they can have is done for free?" Bhargava says.
Part of the social network's strategy should be to make its platform more appealing to large brands, Bhargava adds. "Simply doing home or logout screen takeovers isn't going to cut it," he says. "[Facebook] needs to get better at describing and quantifying the options that they have available for larger advertisers."
General Motors, the third largest advertiser in the U.S., created some buzz when it revealed that it would discontinue its paid advertising on Facebook--translating to a loss of about $10 million for the social network--but would continue to engage followers via its fan page. …