3 Things Facebook Must Do To Succeed
Mark Hughes is CEO and co-founder of C3 Metrics. Previously, Hughes served as vice president of marketing for eBay’s Half.com, where he grew the site to eight million online customers in less than three years. Follow C3 Metrics@C3Metrics.
Yes, we need to talk more about Facebook. That’s largely because if the company plans to do well in the post-IPO world it has to become more innovative about how it’s going to grow its ad revenue.
Facebook doesn’t guess if you’re a man or a woman. It knows. Facebook doesn’t guess your age. It knows. Facebook doesn’t guess your interests and psychographics. It knows. It has the ability to target and scale. But where’s the video? Facebook’s announcement that it will let advertisers bid on ads is interesting, but more banners is not what Facebook needs. One of the three keys to Facebook’s stock performance resides in video, and not merely the fifteen-second versions from Madison Ave.
Facebook has the scale to enable custom video content that Colgate, Chevrolet, and every top-100 advertiser is yearning for. This means pulling from other sources. In other words, it should do more of what it’s already done with Google employees: Persuade them to leave Google and work for Facebook. The same is true for video content creators on YouTube. Persuade those YouTube content creators to make Facebook the home for their videos, and give them incentives to do so.
The second key is location-based mobile. Imagine yourself shopping for a car. You have your smartphone with you, and stop by a car dealership to look. Without “checking into” the dealership or liking it, Facebook still knows you are at that specific dealership and could record the first step toward a purchase: You spent forty five minutes within 100 yards of a dealership. A week later, you and your smartphone are within 100 yards of two more car dealerships, where you also spend some time.
Through very simple behavioral analysis Facebook determines the obvious. You’re shopping for a car. Brands like BMW, Audi, and Mercedes are interested in this type of real-time, in-market data. In fact, this data is so valuable that Facebook could create an entirely new advertising exchange and advertisers could bid based on your intent.
In online advertising, we call this “pre-funnel” or “pre-search.” This is intent, and intent is the golden nugget that makes Google so valuable with advertisers.
Many advertisers like Facebook, but it’s time for deeper analytics. Facebook has been reticent to invite traditional online tracking onto the company’s advertising platform. Why? Because online ad tracking is fundamentally broken. View-through pixels are not a standard on Facebook, and measurability has often been limited to on-site Facebook activity.
Every other RTB and DSP is held to accountable standards, but the fact remains that current standards need to replace the lie of last click attribution tracking. GM measured everything with last click attribution. But because social and display are often upper-funnel activities — driving awareness more than conversions — GM had no clue what it was doing when it yanked $10 million in advertising from Facebook.
To be fair, Facebook had no idea how it was performing for GM either. It’s in Facebook’s best interest to go beyond current standards and adopt view-though pixels, viewable impression standards, attribution modeling and other measurement advancements. Without them, Facebook will continue to get screwed out of performance credit, and we’ll see more and more stories like GM’s.