Facebook should begin charging brands for their fans
Namely, charge brands for the fans that they attract to their Facebook pages.
Facebook fans, of course, are free, but they be shouldn’t be the piece suggests. It would mean a fundamental change to how Facebook operates, but one that Facebook could make.
Is there anything to the idea? If you were Facebook and looking at brand behaviour on the social network you would clearly see that brands are increasingly investing a lot of money in their Facebook content.
At present, the brand pages they operate do not cost anything and nor do the fans they accumulate.
You also have brands like General Motors. Last year it famously pulled its Facebook $10m advertising budget and said it would instead focus on content.
If GM doesn’t advertise what does Facebook get out of it having a page? Obviously it is investing in the platform, publicising it in its marketing, but it receives no direct cash.
Facebook is simply not great for advertising
The piece argues that the switch in model is needed because “Facebook is simply not great for advertising” as it was created as a social utility that is “poorly suited to traditional advertising”.
The piece argues that while Facebook is attempting to get around this problem with initiatives like sponsored stories that might not be enough. Sponsored stories asks for brands to be more engaging and conversational in their ads, but there is a problem with this.
If brands get good at engaging with large fan bases on their pages, why bother paying to run ads? Coca Cola has 53 million fans does it need to advertise on Facebook on top of that?
GM is another example of that. It plans to invest $30m in content and Mark Zuckerberg and his shareholders won’t necessarily see a dime of that cash. Surely that is a problem?
That brings us neatly to why the Ad Age piece thinks brands should maybe pay for their fans:
“Imagine instead that brands paid for active fans instead of ads or sponsored stories. Now everyone’s incentives are aligned. As the number of fans grows, and the level of engagement grows, brands don’t mind paying because they are getting more engagement, Facebook gets more revenue, and fans get more value (or else they wouldn’t be participating).
In addition, the “pay for fan” model solves the mobile problem. Now Facebook doesn’t have to worry about how to deliver ads onto tiny screens.
Finally, “pay per fan” moves the discussion of measurement from “How many fans do you have?” to “How much is a fan worth?” This is a far more productive conversation.
It suggests a number of ways for this to work such as charging with additional fees based on level of engagement or a variable pricing model depending on the level of analytics you receive about your fans’ profiles and activity.
It’s an interesting idea but it would mean a huge change in the way that Facebook operates. A fundamental one that some brands are likely to balk at. That could prove yet more problems for Facebook at a time when it could do without them.
Besides there is something decidedly off about making people pay because they like your brand and it is early days for sponsored stories and social advertising. We don’t know how well this will work for brands and it is far too soon to try things like this.
It would likely put some brands off of Facebook altogether and drive them elsewhere.
It also supposes that there is a fundamental problem with social, that it doesn’t work, when we know it does.