The Digital Anthropologist: The Facebook Status Trap

This post originally appeared in The Advertising Technology Review in 2014.

Like a high school nerd—rich, brilliant and adept only at higher math and inviting ridicule—Facebook is painfully aware of its social status. Much of its perceived value within the digital ecosystem depends on correcting the industry’s algorithm homework or buying— with ad format makeovers and technical partnerships- its friends.

Yet some analysts claim that the increasingly frequent portrayal of Facebook as a pretender to the throne—a gangly, at times unworkable, tool for marketers powerful only through its wealth rather than its usefulness—is hasty. Such assertions are not merely the product of incomplete research, say some industry veterans, but rather are born of a fundamental and nearly universal misunderstanding of the changing nature of the digital ecosystem and advertising itself.

“Facebook is a force of change that just keeps coming and coming- and there are plenty of people who don’t want to accept it because their (companies) have 50 or 60 years invested in traditional media,” said LiveWorld CEO and Founder Peter Friedman, a tech entrepreneur and digital marketer with more than 29 years of experience in the industry. “Consumers’ eyes and minds are on their laptops, however, not on the (TV) screen.”

Unlike a socially awkward heir, public opinion of Facebook—in particular that of Big Media’s Old Guard- matters enormously to its fortune in the long run. Facebook’s popularity—from its ability to engender long-term consumer affinity to its willingness to earn marketers’ trust continuously—comprises its present and future wealth- irrespective of the positive supporting data behind many of its products.

Should the platform become too unwieldy for CMO’s to justify, or if consumers, now showing mounting restlessness, abandon it for other means of connection—taking their data and real-time content with them- Facebook may become MySpace- without the music.

Facebook— ecosystem-vulnerable and dependent on user-generated content— is an emblem of the kind of digital economics that makes traditional economists with hearts for bricks-and-mortar retail direct responses ROI quite nervous. Can, asks media theorist John Battelle, marketers truly win in an ecosystem which purports to be open, and yet is dominated by players so engorged with consumer data that they seem virtually invulnerable to the will of the market itself?

The answer might not matter as the ecosystem, at least as many marketers know it, may soon be no more.

“Facebook recently went from being ‘another channel that we should start paying attention to’ to becoming a main part of the marketing strategy execution” for many brands said, Friedman. The “newness” of social media, according to Friedman, coupled with the industry’s patchwork of confused terms and muddled definitions of what marketing success looks like online, means that many marketers see failure in social media where they ought to envision incremental or embryonic growth.

Ranging from confusing engagement with clicks to a stubborn reliance on old media models, marketers are in many cases, Friedman believes, navigating social media with invalid points of reference. “Because Facebook has become very big and very powerful, everyone is saying ‘OK how do we manage this, how do we make sure we are getting the results that we want out of this?'” said Friedman. The problem is that the old rules for traditional media—and even online media—no longer apply. The ecosystem has yet to develop a new, widely accepted norm of branding and marketing success- beyond CTRs- and this puts Facebook in the hot seat.

“(CMOs) are realizing that this has become 10 or 15 percent of their budgets- which represents millions of dollars- and they are also finding that the old vanity metrics don’t really measure what they are trying to view.” Those “vanity metrics” include likes and clicks and other measurements which don’t directly relate to engagement. Friedman believes that as the industry matures and marketers become aware of the core differences between a “click” and an engaged consumer they will be able to use the platform as it was, in his view, meant to be- as a “tool” to enhance consumer engagement.

“I think if Facebook is ‘failing marketers’ now, it is only because of what Facebook is capable of doing in the future,” stated Chris O’Hara, CRO and Co-Founder of Bionic Advertising Systems, referencing several recent reports. “The math is simple and compelling: cookies crumbling, plus Facebook’s mobile dominance, plus Facebook’s ability to connect users across devices, equals a win. Datalogix’s offline purchase data has already shown sales lift in CPG, and brands are dying to port loads of TV money into programmatic digital channels.” O’Hara believes that Facebook’s potential can’t be denied, even if some marketers find the platform inscrutable. “Imagine if Facebook actually builds a compelling native ad unit or two? Sorry, I just don’t see how Facebook is doing anything other than continuing to disrupt traditional marketing and providing value for marketers who understand how to play in their ecosystem.”

That knowledge—of how to capitalize on the benefits of the Facebook ecosystem— is relatively rare among marketers, according to many of the publicists, social marketing analysts and CEOs interviewed for this article. Some attribute it to a lack of education about the shift of power in the ecosystem. Others feel that it is a by-product of an Old Media culture which has not yet become conversant with social media as a viable marketing tool.

“I don’t think most marketers know how to use it- you can’t just throw up a page and assume that this is equal to a social media strategy,” said one New York social media strategist who asked to remain off the record. “This is not an issue of something not working- Facebook is a platform, it is not meant to create your marketing strategy- marketers are failing to take advantage of it.”

Nonetheless, there is indeed evidence of rampant failure within the Facebook ecosystem.

Facebook still drives the most visits to retailers, but its referrals dropped by 20 percent from a rate of 77 percent of referrals last year. Facebook CTRs are up over last year but still lag significantly behind paid search. Consumer engagement rates- although growing- are erratic.

According to recent research, CMOs and ad buyers are confused about the relevance and applications of Big Data in general and even more unaware of how to use Facebook with Big Data appropriately, avoiding privacy and targeting disasters. Marketers have for years voiced concerns about the transparency of the ad buying process and social media’s future. Facebook has pushed for ad buying transparency but has yet to deliver a full-throated explanation of the benefits of multi-touch attribution, which promotes a new model of the sales funnel to the industry.

“The question with Facebook and many of the social media sites is, ‘What are we getting for our dollars?'” Michael Sprague, Kia Motors Corp.’s North American division VP told the Wall Street Journal before Facebook’s disastrous IPO in 2012.

Users—including choice demographics such as teenagers—are also leaving the platform by the millions. This phenomenon is most salient in mobile where a non-Facebook mobile app WhatsApp has already dethroned Facebook as the most popular mobile app in the UK.

Facebook, with more than one billion members, won’t bleed to death from a comparative trickle of unhappy users, but the platform desperately needs a more impactful strategy for communicating and demonstrating its value to the ecosystem- including its users.

Can the bulk of the blame for an increasingly complex ecosystem be laid at the feet of Facebook, as it has built its wealth chiefly on data and the potential of its platform creating consumer-to-brand interactions? Those on the front lines don’t think so—pointing the finger at the industry itself.

“Facebook has not failed marketers,” states Molly McCarty, a Social Account Associate, 3Q Digital. “Yes, there are kinks in the system, and there are updates that would make the platform even more effective, but we must keep in mind that this is a relatively new platform.” McCarty believes that the company is undergoing a major change in priorities. “If we look at the improvements made in the last few months, it becomes clear that Facebook is focusing more than ever on the advertiser. Facebook’s improved reporting helps marketers gauge performance on the account, campaign, and ad levels more accurately. Lookalike audiences, for example, allow advertisers to target people that are similar to their key audiences.”

Scott Bain, VP of Media Strategy for Spruce Media concurs, stating that Facebook “has invested heavily in evolving their marketing products, increasing partnerships with 3rd party data and measurement providers” and believes that the company has now shifted its business model towards providing more user-friendly solutions for marketers.

Mark Zuckerberg, regardless of how many open letters that he receives, won’t be shouted into laying bare his company’s complicated menagerie of data, content and communications technology for the pleasure of analysts.

Like GM, marketers may be left wondering if they will eventually get their money’s worth by investing in and learning Facebook’s ever-evolving playbook.

“I’d say the jury is still out on (Facebook),” said Dr. Jon Morris, a contributor to the Journal of Advertising Research and professor of marketing at The University of Florida who began his career in the advertising industry in 1968.” The trouble is that Facebook is not being used in the best way—people seem to want to use it in very traditional ways—driving clicks on ads or counting likes.” Facebook’s future, Morris believes, depends on how well marketers learn to adapt to the new digital ecosystem which, Morris says, is still defining itself.

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