Facebook IPO and What it Means (For You)
Everyone has heard about Facebook’s formal IPO by now, and if not… then that’s why you’re probably here. Long story short, Facebook wants to sell its shares to the public. They want to raise $5 billion, which in time could be worth a whopping $100 billion. That’s a whole lot of Facebook Ads. To put it in perspective, the search engine king, GOOGLE, only raised about $1.2 billion and is now worth more than $190 billion. Now, the question you’re probably asking yourself is: What does it mean for me?
That’s a good question, and I’ve compiled a few thoughts about the matter. First and foremost, let’s start where you’re more likely to see the first biggest impact.
Boost in Ads
For users: Facebook’s S-1 filing revealed that 425 MILLION active members access their Facebook profiles through their smartphones. Currently, users don’t receive ads on their mobile devices, and with Sponsored Stories being rolled out again, users are going to begin to get a few more posts in their newsfeeds from brands they like.
For brands: Brands have “mobile” imprinted in their marketing plans for 2012, so having Facebook rollout a mobile marketing capability falls nicely within marketer’s overall strategies. Not to mention, there are more than 350 million active monthly mobile users across 475 wireless operators worldwide (44% of total active users), where 300 million are using Facebook’s mobile app. People who engage with Facebook on mobile devices are TWICE as active as people who only use it on their computers. With 91% of US citizens have their mobile phone within reach 24/7, it goes without saying that being able to market on mobile will allow brands the opportunity to connect with their fans anytime and anywhere, eliminating geographic limitations. Keep in mind, marketers will now be challenged to deliver highly engaging and relevant copy, as these ads will be shown mostly to people who already “Like” their pages, so if messages seem intrusive or irrelevant, they may opt-out of your messaging by un-liking brand pages.
Virtual Currency/E-Commerce
For users: Nearly a sixth of the world is active on Facebook and they expect to reach the 1bn user mark by the end of this year. As Facebook’s active members grows ever nearer to the billion users mark, Facebook is becoming a social staple in people’s every day schedule. So much in fact, that users have become more comfortable sharing their personal information with the service, and have even begun to make purchases through the site. Users have already started to use Facebook’s Credits for social gaming, accounting for 15% of Facebook’s revenue in 2011. It will be no surprise that brands and Facebook will become more integrated and combine debit/credit transactions into Facebook credits, which will be a lot more convenient and portable throughout the Facebook site.
For brands: Having Virtual Currency may have the potential to enhance e-commerce solutions for some businesses, and will help create a marketing hub that will not only be used to share news and market products, but will lead to direct purchases within the same environment. Additionally, leveraging the social aspect of Facebook newsfeeds and “Like” button will actually help add monetization to the technology, including the new Social Apps.
These Social Apps will continue to build on the hundreds of thousands of businesses and their social products within the platform. These products will help contribute to Facebooks’s revenue, and with this new investment opportunity, expect Facebook to continue developing ways to better enhance the technologies and user experience. This not only helps build Facebook’s revenue, but also helps breathe life into great commercial potential for brands around the world.
Power Influencers
Users: As power users and bloggers become mini celebrities within the social space, they can expect to be targeted for their social power. Brands will become less reliant on traditional media, and rely a lot more on social discovery. This goes without saying, that practically any user with the commitment and talent can become a potential power user. This is the driving principle that helps power Pinterest, Twitter, and Youtube.
For brands: We’re already seeing instances of companies build products around big influencers , such as Nikon, ShoeDazzle, and BeachMint. Targeted key influencers will prove to be a cheaper alternative than traditional media, and may prove to gain more authentic organic growth for communities, as well as a great way to drive awareness for new products.
In Conclusion
With Facebook’s IPO, the social network giant is going to experience the pressure to increase revenue for investors, so expect to see a few of these changes:
- An increase in Facebook Ad spending and costs, so be sure to allow a budget for these.
- Increased focus on their Social Applications platform, so look into getting a good development team that will best utilize Facebook apps for your brand using the new technologies like the latest Open Graph to help get your brand’s name and applications on your fan’s timelines for their networks to see.
- An expansion in Facebook e-commerce with a focus on Facebook Credits to become the official currency within the platform. Early adopers should look into migrating parts of their sites to see if Facebook ecommerce would work for their brands. If you don’t have the budget for a custin application build, you might look into a storefront application solution such as Payvement and/or Highwire.
In the long run, Facebook will put a lot more emphasis on engagement within Facebook, which will have to benefit users’ experiences, as well as make it worthwhile for marketers to continue to invest time and money into the platform. Do not get too caught up on building the quantity of fans, but more building on the quality of the relationships between your consumers by providing them useful, relevant, and engaging content.













