Are Advertisers “Consciously Uncoupling” with Facebook?
Any startup has a lot of questions to answer in the beginning stages and certainly one of the most important involves the revenue stream. I know the cool kids think that advertising on sites are the devil but a customer’s ROI cannot be an afterthought. Facebook tried to recover by quickly selling advertising which was little more than smoke and mirrors.
In fact, you could pay $600,000 to promote yourself, and be rewarded with thousands of new likes and follows from bots, spammers and scammers – and no ROI to show for it.
“Too bad.” Facebook says, “We’re a social network, not an ad platform.” (1)
Facebook’s attitude towards advertising will be their economic downfall. I realize that sounds ludicrous, since they are worth billions but a company cannot run on smoke and mirrors forever. The market is too unforgiving and there is too much competition to allow corporate arrogance to negate legitimate concerns. (Not recognizing the rights of others is a characteristic of The Sociopathic Business Model™) The projections will be unrealistic and reps selling the advertising will unfairly be blamed for loss of advertisers. The fact is Facebook was set up for advertising failure from the beginning.
I’ve seen this often when consulting, people think their company is one thing (a website) when it really needs to encompass more (what drives people to the website for POS?) Relying too much on one concept with tunnel vision can be too costly to a startup with limited resources. Facebook has unlimited resources in comparison to small startups, but I hope Mark Zuckerberg learned from his mistakes on Facebook before doing the same with WhatsApp.
A successful startup where the selling the Company was made on ‘projected’ income over ‘actual’ income is truly only successful when the company can transition from the in it to win it stage to the in it to sustain it stage and the projections turn into actual income.
And here is an actual letter from an unhappy advertiser “consciously uncoupling” from Facebook:
We should probably expect more of these uncouplings in the near future. Here’s a great article from KISSmetrics about the importance of ‘organic’growth, which is harder to achieve but creates sustainable business (1):