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Facebook’s big brand conundrum

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By Mark Lowe | founding partner

January 6, 2014 | 4 min read

Facebook has always had a testy relationship with major brands. In 2014, the success or failure of this marriage could make or break the social network, writes Mark Lowe.

Notwithstanding its own totemic status, Facebook has always been ambivalent about getting into bed with consumer brands. Its success depends on a delicate relationship with a billion users, most of whom view the site as a place to socialise not shop. But the company also knows that commercial success hangs on taking a bigger slice of the $500bn spent every year on brand advertising.

That’s why in 2010 Facebook replaced its ‘fan pages’ with ‘brand pages’ and made a pitch to advertisers to spend time and money developing content and drawing in fans. But mid-way through 2013, it rewrote the rules and started to restrict the visibility of brands’ free posts in ‘news feeds’, causing a minor uproar in the social marketing community.

Of course, few marketers would object to Facebook trying to create a model that makes money, but its inconsistency has made life difficult, with Facebook chopping and changing as it tries to balance acceptable formats with lucrative ones.

To wit, Facebook denied that it had reduced ‘organic reach’ so that brands would pay to promote their posts, but since then has back-pedaled, admitting that it expects “organic distribution of an individual page’s posts to gradually decline over time” and saying that “the best way to get your stuff seen if you’re a business is to pay for it”.

This apparent inconsistency also applies when it comes to more conventional formats. For instance, Facebook CEO Mark Zuckerberg once talked down traditional advertising’s lack of “social context”, but just before Christmas, Facebook announced that it was trialling video ads in news feeds, a format that feels much closer to Web 1.0 than, say, Facebook’s much-vaunted ‘social graph’.

The big brand conundrum is something that Facebook’s management recognises. It explains the recent decision in Europe to recruit Nicola Mendelsohn, one of advertising’s most charismatic figures and someone with the right contacts inside the major brands and their agencies to sooth decision-makers’ concerns and execute a more consistent strategy.

But despite its obvious advantages, not least a mortal lock on a billion social lives, Facebook has major questions to answer around the opacity of its measurement and the claim (as yet unproven) that it will help brands to intercede in those lives. Its ability to answer these questions will define whether it follows Google into the corporate stratosphere or MySpace into oblivion and 2014 will be the year we find that out.

Mark Lowe is a founding partner at Third City. Following him on Twitter @markrlowe

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