The Facebook initial public offering to raise 5 billion dollars.
Wow is the natural reaction. Is it worth it? Do you intend to be a Facebook shareholder?
Facebook has revolutionized how people spread information and communicate.
Isn’t that what marketing and advertising is…spreading and communicating information?
It is good to look at the Facebook model and core principles when devising your own marketing strategy. Up to this point, Facebook has been consumer focused. They have continually focused on the user experience which has led to growth like never before seen.
Consider these facts and why it matters for your business:
- Facebook has grown to over 845 million users. That is year over year growth of 39% for a network that was already massive.
- 100 billion friend connections as of the end of December 2011
- $1 Billion in profits in 2011
- Facebook’s profit at the time of the initial public offering is nearly 10 times Google’s profit when they went public.
These are all phenomenal statistics but the big question again is, how does this affect your business?
Facebook can’t be ignored. Your customers are on Facebook. Your customers are connecting on Facebook and they are talking about you. Are you going to join the conversation?
A bigger consideration for businesses that use Facebook Pay-Per-Click, is how the IPO will affect your advertising.
Several years ago before most people knew about it, Google Pay-Per-Click was almost like printing money for business owners that used it effectively. It is a live auction platform so with very little competitors and very few that knew how to use it effectively, it was great.
Clicks (visitors to your website after seeing your ad) that were 30 cents now cost $15. Everyone knows about it and the big stupid companies throw money at it. It raises the price for everyone.
The more people bidding on something the more it costs…makes sense.
The part that may bug you the most is the big dumb company that hires a marketing director and their job is to “spend the budget.” So they do. And it costs everyone more money. Of course Google is happy.
Facebook’s PPC platform has some great features and right now it is cost effective for most businesses. The majority of businesses that are not using Facebook PPC do not know about it, or they would use it too.
Now that Facebook is finally going public things are going to change.
Facebook has grown so dramatically because of the vision of the young leader, Mark Zuckerberg. Mark has focused on making the user experience, “cool and fun.”
With shareholders focused on making money there is a good chance that the advertising platfrom will quickly become more of a focus. This will attract more competition and of course, the big dumb companies, that will throw money at ads and dominate the ad space.
This will drive the price up because it is a bidding process.
If you are not using Facebook Pay-Per-Click now is the time. However, do not be like the big dumb companies and just throw money at it. Learn how to do it right from an expert or hire one while it is still affordable.