Before we go any further I have to disclose that not only am I on Facebook...but I AM ON FACEBOOK 24 hours a day, or at least it seems. Out of all the social networks I love the fact that everyone I know is on there. I have all my friends, (and some people who are sort of friends, and some I just used to go to high school with and I haven't seen in 25 years), all in one place and I like seeing what they are up to and being able to communicate with them. I am organizing a school reunion off Facebook. I get it, I like it, I think it works. The last sentence though might be the first sign of Facebook's demise.
Remember when MySpace was cool, and everyone you knew was on MySpace? Then suddenly people started trying to friend you that you didn't know are really didn't want to know. It became the preying ground for hookers and strippers trying to get "dates". I used to have at least 5 "friend" request on MySpace from people looking like Barbi and called "Trixie" who were going to be in my area for the night and, "wouldn't it be fun to get together"? This ruined the experience and I stopped going and eventually changed over to Facebook.
The interesting thing though was, so did everyone else. It seemed that it was within a couple of months, no one used MySpace and everyone jumped to Facebook. In the past couple of weeks Facebook has made some huge mistakes which has taken the shine off it's moniker. Is everyone going to jump?
What I want from my social network is to connect with my friends. I don't mind you selling advertising, or if I opt into a sales promotion using my data from that promotion to sell targeted advertising...what I do hold closely though is my privacy, and so do a lot of people. On sunday Mark Zuckerberg, Facebook's clever young CEO, announced that they would be changing their privacy settings to make it easier for people to understand. The problem is, trust is a fickle thing, a little bit like "Trixie" on MySpace, once you lose trust it's hard to gain back, (not sure what happens when you lose "Trixie", I suppose she friends another 1,000 people), my point being, just as "Trixie" pissed me off and made me switch from MySpace to Facebook, Facebook's seemingly total openness to offering up our likes, dislikes, friends, shopping habits, inside leg measurements to any group or advertiser could be their "Trixie"! In his announcement Zuckerberg didn't apologize nor did he say he would ask permission to use our information, only that they would change the privacy settings.
This is a dangerous move. Make it clear, and be humble to the people who are your customers...apologize, make it clear that without opting into anything non of your information is going to be shared, why he didn't do this is beyond me. Five of my friends have discussed jumping ship on Facebook. The movement might have started...
Unlike some people blogging on Facebook I don't see Zuckerberg as an evil tyrant willing to sell any of his members down the river, I think they're hit the wall. Facebook is closing in on half a billion people... let's just think on that, more people than the population of America! An average TV network will have a reach of around 60 million households. With an average of three people in a household that's only 180 million, and there's no guarantee that just because your TV channel comes into their living room, that they will watch. Facebook has over 400 million active users! Let's play naive and do some quick math. The average cable channel, with minimum targeting gets a $20 CPM. On a one impression basis Facebook is worth $8 million a month, but we all know that a visit to Facebook will probably garner an average of about 10 impressions, so let's bump that to $80 million a month. But the $20 CPM blended on Facebook is probably $15, so that puts us at $60,000,000 or $720,000,000 a year, not far off what they're actually making. Facebook has hit it's first wall. The only way to build you business is:
1: Attract more people, (well they might be hitting a wall there).
2: Charge a higher premium price for your inventory, (hitting the wall here on standard no targeted information).
3: Create new inventory options previously not available.
4: Have "Trixie" offer a free lap dance to every person breaking 1,000 impressions a month!
What Facebook is left with is option three, (although I hear option four was a close second). They have to offer advertisers something they hadn't been offered before. I don't see video pre-roll insertion yet, not seeing much in the way of standard banner, not seeing "buy outs" for movies, screenings, but I am seeing Facebook giving away my personal information. It's the wrong way to go in this business. In my opinion it's the easiest way to loose your customers. Is Facebook jumping the shark...we'll see!
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