I just watched the full 31-minute
Facebook IPO roadshow video. It’s an incredibly well-produced — even at times emotional — presentation that seeks to cast Facebook in the best light possible to investors or anyone watching it. It’s a kind of utopian vision of what Facebook is and aspires to be in the future.
However that glossy vision obscures many of the tensions between Facebook marketing and the consumer experience, as well as between personal sharing that is the heart of the culture of Facebook and the data mining and privacy confusion that Consumer Reports has complained about.
The stars of the video are CEO Mark Zuckerberg and Product VP Chris Cox who articulate the idealized vision of Facebook the company and the product. COO Sheryl Sandberg and CFO David Ebersman are the ones who sell the company’s commercial and revenue opportunity most directly to investors.
“Ads have always been really important”
“Ads have always been this really important part of what we do because we want to keep Facebook free for everyone,” says CEO Mark Zuckerberg as a segue into Sandberg’s portion of the show. She goes on to discuss how Facebook advertising works and why it’s got a bright future: “Word of marketing at scale for the first time.”
Three dollars in sales offline for every one spent at Facebook
There are testimonials and case studies from large and small companies. For example Ben & Jerry’s discusses in a testimonial how for every $1 spent on Facebook the company has seen $3 in offline sales.
Sandberg cites a local wedding photographer who targeted engaged (as in about to be married) women on Facebook and by spending $1,500 was able to generate $70,000 in offline sales. She adds that there are “3.2 million small businesses with actively managed Facebook Pages.”
Sandberg says that all of the global AdAge top 100 advertisers are “Facebook clients” and they all spend about $1 billion each on marketing and advertising annually (implying a multibillion dollar annual opportunity for Facebook). The problem for Facebook is that much of the value that the site has created for marketers — Facebook Pages and the Like button — doesn’t translate into direct revenue for the company.
Facebook “well positioned” at every level of the funnel
Sandberg says that Facebook is “well positioned to help businesses reach people at every part of the [purchase] funnel.” The suggestion is that Facebook could satisfy all a company’s marketing needs. However there are gaps in Facebook’s ability to satisfy consumers at each stage of the funnel. Notably the capacity to do research about products and services is almost totally absent on Facebook. The site is still mostly about push rather than pull.
Yes I can ask friends for recommendations, but that process is surprisingly inefficient on Facebook today. That’s partly why I believe Facebook will get more deeply into search; not just because of the revenue opportunity but because it’s a gap in the product capability.
“Mobile is a key growth area for Facebook”
Sandberg adds that “Mobile is a key area of growth for Facebook.” She doesn’t elaborate on what that might mean in terms of ads other than talking about the company’s limited rollout of Sponsored Stories in the mobile news feed. But it’s an area she calls out for future development.
CFO David Ebersman is left to discuss financial numbers and margins. This is the stuff that will be most interesting and arguably most important to investors.
His role is to manage investor expectations and reinforce that Facebook is trying to position itself for the long term. This may result in short term margin pressure he cautions. Ebersman adds that the company is currently in a “heavy investment phase” in an effort to ensure long-term user engagement and loyalty.
The most interesting thing that Ebersman says is that the company may extend Facebook Payments “to areas outside of games” (read: physical goods/e-commerce).
Every product experience you have will be social
The wrap-up and “Future” discussion is left to Zuckerberg. He returns to the grand vision of the early part of the video.
Zuckerberg says that in the future “every app you use will be integrated with Facebook in some way.” He says he believes that one day “every product experience you have [will be] social” and that those experiences will all be “powered by Facebook.”
That idea is at once amazing to consider and fairly frightening, for obvious reasons.
Comentarios