A new report from Forrester’s Nate Elliott reveals what many of us in social business have long suspected: Brands may be using Facebook for marketing, but they are not particularly happy with the success they are seeing.

Forrester surveyed 395 marketing executives from the US, UK and Canada about the business value derived from 13 different online marketing sites and tactics. The outcome was that, “Facebook offered less value than anything else on our list.” Just how dissatisfied are marketers with Facebook? Even Google+ marketing is rated higher!

The report, “Why Facebook is Failing Marketers” (free for Forrester subscribers), notes that more than seven in ten marketers already post updates to a branded Facebook page and approximately half buy paid ads on the social network. Despite this, marketers report Facebook is furnishing disappointing business value and that Facebook ads “generate less business value than display ads on other sites.”

Forrester notes that Facebook status updates are delivered to just 16% of a brand’s Facebook fans; by comparison, the average opt-in marketing email delivery rate exceeds 90%. In the footnotes, Elliott notes, “It’s safe to say that if your email service provider was only delivering messages to 16% of your mailing list, you wouldn’t think twice before firing them.”

The report concludes with recommendations for marketers and Facebook. I hope both parties are listening, because if big marketers yank their ad dollars and Facebook fails to evolve their ad products, Forrester predicts a further degrading user experience on Facebook.

What I really liked about this report is that it does not simply stop at what marketers are saying but also digs into how significantly Facebook’s potential to change advertising has been missed. As I noted in my post earlier this month, “Facebook's Missed Opportunity to Change Advertising As We Know It,” Facebook had promised to change the very nature of advertising with new forms of marketing based on social signals. Today, however, the social network offers advertising almost undifferentiated from that available on other highly trafficked websites. “Only approximately 10% to 15% of the ad impressions delivered on (Facebook) use social connections as a form of targeting,” according to a Facebook executive, leading Elliott to note that the social network “has become a Web 1.0-style ad seller.”

For more information on Forrester’s survey of marketing executives and what marketers and Facebook should do to improve marketing value on the social network, check out Nate Elliott’s blog post or buy or download the report at http://bit.ly/WhyFacebookIsFailingMarketers.

Ask the wrong question and you will get the wrong answer. That is the problem with so many of the studies we see in the digital and social space, particularly those done by vendors with a stake in the outcome.

A classic example of this was the announcement earlier this year that 70% of consumers "said mobile advertising is a welcomed personal invitation from brands, rather than an invasion." Of course, whether people think mobile advertising is a "personal invitation" or a "personal invasion" isn't the pertinent question; the appropriate question is whether people trust mobile ads and whether those ads convert mobile surfers into mobile shoppers and buyers. On those more vital questions, other studies tell a different story--Millward Brown recently found that consumer favorability toward mobile ads was so poor that it ranks with non-opt-in email, and Nielsen found that trust in mobile ads was lower than every other ad medium. Ask the wrong question and you will get the wrong answer.

Source: eMarketer

I had this same reaction today to reading eMarketer's review of SocialVibe's research into brand social media connections. The study found that the number one reason people unfollow a brand is "Too many updates." The second reason is "Brand's values and/or content differed from original perception." 

I would suggest that these two answers are one in the same. If people received what they expected to receive from the brands they follow, it would be difficult for the number of brands' posts to rise to the level of "too much." Follow Mashable on Facebook, for example, and you will get a couple dozen posts a day, but Mashable has a million fans and almost 50,000 people "talking about this," so clearly they are getting something right even though they break every "rule of thumb" for frequency of posts. They offer valuable content people welcome, and so long as they do that, it is hard for Mashable to fall on the wrong side of the "too much" perception barrier. And this isn't just the case for media brands, either--how often could Disney or Harley-Davidson post before people would cry "too much"?

Ask the wrong question and you will get the wrong answer. If you ask people whether they unfollow brands for posting too much, they will answer in the affirmative. But the psychology behind the decision to unfollow is not really about quantity of posts but their value. If consumers saw more value, they would welcome more posts.

This isn't to suggest your brand has carte blanche to post as often as it wishes but to advise you ignore studies that ask the wrong question and instead focus on the needs and expectations of your own audience. If you bring laser focus to how your brand can truly and selflessly serve those needs and expectations, you can pretty much ignore all those studies and "best practices."

No study can tell you how often your audience will accept your brand posting in social media, but your audience can. And that is the right question to ask!

On May 18 of this year, Facebook stock debuted on NASDAQ at $38 per share. Last week, three months later, it was selling for half that price. As the stock has plunged, questions about CEO Mark Zuckerberg's leadership have risen. Late last week, the LA Times asked "Is Mark Zuckerberg in over his hoodie as Facebook CEO?," a swipe at the attire Zuckerberg famously wore on the day the stock launched. CNET Columnist Ben Parr received an email from an attorney's PR firm promoting his drive to force Zuckerberg out. And even Perez Hilton got into the act, taking a break from scribbling on celebrity photos to ask, "Should Mark Zuckerberg Step Down As CEO Of Facebook?"

Should Zuckerberg step down? That is up to him to answer. Zuckerberg could certainly follow in the footsteps of Twitter's founders who stepped aside to allow a more seasoned leader to take the helm, not that the sailing has been that smooth over at Twitter since the transition. Under Dick Costolo, Twitter has alienated its developer community and violated its long-standing commitment to free speech by encouraging NBC to request the suspension of a critic's Twitter account. Although Twitter's revenues are rising, they reportedly lag Facebook's revenues considerably. It is difficult to evaluate Twitter's performance since it remains privately held, but the company's SecondMarket valuation was downward trending this year until rumors surfaced of Apple's interest in a share of the microblogging network. The point is that, while CEO leadership is important, CEOs are not miracle workers (no matter what you may have read about Marissa Mayer).

Whether or not Zuckerberg should step down is a question only he can answer. But need he step down or will he be forced to do so? If you think this, you have not been paying attention. Here are three reasons why Zuckerberg's position is secure:

1. It is his damn company: As noted on this blog six months ago, Facebook's S-1 IPO filing could not have been clearer about the control Zuckerberg wields at Facebook. After the IPO, Zuckerberg owned 56.9% of the voting shares, and the IPO took pains to warn investors what this meant. It noted Facebook would be a "controlled company" and that "Our CEO has control over key decision making as a result of his control of a majority of our voting stock." In case this was not clear enough, the IPO also included this comment: "Mr. Zuckerberg will be able to effectively control all matters submitted to our stockholders for a vote, as well as the overall management and direction of our company." Facebook's CEO, much like the social network itself, came with a "Like" button but no "Dislike" button, and there is virtually no chance Zuckerberg can be forced from his position running Facebook. If he steps aside, the decision will be entirely his own.
     
2. Investors' unreasonable expectations and mistakes are not Zuckerberg's responsibility. If you thought Facebook was going to be a safe or strong short-term stock, you were truly misguided. The stock debuted at a price that represented a PE ratio (price/earnings ratio) of 95. At the time, successful tech companies like Apple, eBay, Microsoft and IBM were trading at PE ratios of less than 16. In other words, Facebook was going to need to grow its net income 500% in short order to justify its price, much less create positive market momentum. (The first person who says, "Earnings don't matter" will be sentenced to go back in time to March 2000 to relive the dot-com bubble burst and learn what he or she should have the last time around.) If you are looking for someone to blame for the fact the shares were overvalued, then pick on analysts at firms like Sterne Agee, Needham & Co. and Wedbush Securities, all of whom rated Facebook a "buy" in May and suggested target prices in the $40s. As far as I'm concerned, there has been nothing surprising about Facebook's stock performance since its IPO, and if you think I am Monday morning quarterbacking, feel free to check out my blog post from December 2011 when I predicted the continuation of the "slow-motion social media valuation bubble burst." Or, heck, go back even earlier when in June 2011 I noted that Facebook or Twitter "could pull an Amazon, lose 90% of their market cap and spend another decade clawing their way back."
     
3. Facebook's financial performance under Zuckerberg has been exactly as expected. The sinking price of Facebook shares has far more to do with investor perception than with company or CEO performance. In July, Facebook's first quarterly filing as a public company "just squeaked in at analysts’ expectations." That included an almost one-third rise in quarterly revenue in a year, a 32% year-over-year increase in Daily Active Users and a 67% increase in Mobile Monthly Active Users. On a non-GAAP basis (the way the market evaluates Facebook), the Earnings Per Share were level with the year prior, which is not surprising given the company is still fueling worldwide growth with a 50% increase in headcount and a two-thirds increase in capital investments. Overall, while Facebook's lack of earnings growth may disappoint the street, the company's performance is on track for what market watchers expect. Compared to Zynga, which recently slashed its earnings estimates for 2012, Facebook looks like a solid, growing, successful, well-run, young company. 

In short, it is pretty darn tough to see how Zuckerberg would be forced out from his CEO position considering he controls the company and is delivering the financial results expected. This is not to say that I think Zuckerberg has been a good CEO in recent years. I have railed against Facebook's lack of revenue diversification and innovation, and its focus on advertising rather than facilitating new social business models has been, in my opinion, a serious blunder in long-term strategy. Moreover, as my former Forrester peer Nate Elliott noted, the company has not delivered the sorts of marketing metrics that marketers need to justify greater investment in Facebook advertising.

Even more concerning is that Facebook's desperation to quickly grow revenue and income seems to be pushing the company away from Zuckerberg's own core beliefs. As David Kirkpatrick, the author of The Facebook Effect, noted in the early years of Facebook, Zuckerberg "resisted pleas to turn Thefacebook into a highly commercialized ad platform, because he thought users would dislike it." Facebook's CEO continued to show ambivalence and concern about advertising years later when in 2010 he said, "There’s a big misperception that we’re making these changes for advertising. Anyone who knows me knows that that’s crazy.”

It is hard to square Zuckerberg's stated vision with the actions of the company this year. Facebook seems to be exploring some very dangerous and unpalatable waters, such as charging users to have their posts seen by more of their own friends and permitting advertisers to place ads in users' news feeds even if those users have not "liked" or given permission for those advertisers to do so. Moreover, Facebook's new Reach Generator threatens to push aside content users want to see in favor of content advertisers want them to see.

I do expect more out of CEO Zuckerberg, but that has more to do with my expectations around social business models and strategy than with the company's 2012 financial performance. In the end, however, what I or anyone else thinks is meaningless. The world can "poke" Mark Zuckerberg as much as it wants, but he and only he will make the decision when the time is right for a new CEO.

Let me be the first to welcome Facebook's 1 billionth user.

No, you haven't missed an announcement from Facebook, but it is coming very soon. Facebook's recent SEC filing indicated that Facebook had 955 million Monthly Active Users (MAUs) as of June 30, 2012, and the social network was adding MAUs at a pace of almost 600,000 per day. At that rate, Facebook will hit the 1 billion mark in mid September.

A billion is a big number. Really big. How big? Well, here's an infographic I hope you will find interesting...




Random Trivia: Facebook took eight years to reach 1 billion users, the same number of years it took Ray Kroc to sell his 1 billionth McDonald's hamburger. While Facebook undoubtedly has a few duplicate users, Kroc had a great deal more repeat customers. Whether or not Facebook will ever be able to claim "billions and billions served" as McDonald's does remains to be seen. The second billion will be much harder for the social network. At the current time, Facebook's growth curve is flattening in the U.S., Canada and Europe as the saturation point is approached, but Facebook still on an upward slope in Asia and the rest of the world. Facebook still has plenty of room for growth globally.

Source links for data in this infographic:

http://investor.fb.com/secfiling.cfm?filingID=1193125-12-325997

http://en.wikipedia.org/wiki/List_of_continents_by_population

http://en.wikipedia.org/wiki/List_of_countries_by_population

http://en.wikipedia.org/wiki/Internet_access#Growth_in_number_of_users

http://www.wan-ifra.org/articles/2012/04/17/world-press-trends-2011

http://www.comscoredatamine.com/2011/06/google-reaches-1-billion-global-visitors/

http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/b#mobilebroadband

http://www.winbeta.org/news/microsoft-1-billion-people-worldwide-now-use-microsoft-office

I'm puzzled, and perhaps you can help answer some of the questions that are bedeviling me lately:

• Why are there so many blog posts about how Facebook Timeline changes brand interactions when so few people actually visit brands' walls? (One recent study found that 75 percent of Millennials “liked” a brand but 69 percent rarely or never return to fan page.) Shouldn't we be more focused on how we break through to fans' newsfeeds and encourage interaction there?
    
• Who the heck cares what Mark Zuckerberg wore when he visited Wall Street? Why are we surprised that a young man whose empire is built on the ways power is shifting away from institutions and toward people demonstrated his indifference (or lack of recognition) to the old conventions of power? More importantly, why does it matter? Would a tie on Zuckerberg increase Facebook's number of users? Would a suit coat have added to the engagement on the Facebook platform?  Perhaps wingtips would have increased the number of sites that integrate Facebook plugins? The future of Facebook and Zuckerberg's wealth doesn't depend on his attire but on the way Facebook continues to bring value to users, advertisers and partners. (And, BTW, didn't we recently decry the way stereotypes about hoodies brought violence to one young man? Perhaps Zuck is to be applauded for demonstrating that the hoodie doesn't make the man.)
   
• If Klout is supposed to be about connecting brands with influencers, why are so many Klout perks made available to those with scores as low as the 30s? People with scores in that range have a social media profile and a pulse, not influence of any particular scale. Don't get me wrong, I'm glad that most folks interact in social media without regard for the influence they create and perks they can receive--that makes them authentic--but what is the point of using Klout to distribute swag to just anyone? A form on a web site could accomplish the same thing in much cheaper fashion.
   
• Why is there such obsession with the price and timing of Facebook's IPO on social media blogs and news sites? Few, if any, of us will be able to participate in it, and whether Facebook's market cap is $75 billion or $125 billion won't affect our social media strategies one iota. The number of likes on our brand pages is a far, far more important data point than the price of a share of Facebook stock.
   
• Why does it continue to amaze people that an individual's social media posts, broadcast freely to the world, may be used for unintended reasons? Some folks manage their social media profile to create the biggest footprint possible, yet gripe when influence-measurement services assign them a score. Others recognize their social media posts may help them land a job, yet complain when their employers listen to what they share. And others whine when law enforcement use their photos of violent events to do what we pay police to do--solve crimes and arrest perpetrators. How long until we recognize that a more open society means a more open society?
    
• Isn't it time for the Google+ hyper-fanboys to admit they were wrong (or, at the very least, wildly overoptimistic)?  You know who I'm talking about: The people who, just days after G+ launched into its private beta, predicted the death of Facebook, published blog posts with near-vertical lines of growth for G+ and insisted businesses needed a Google+ strategy, even though Google had yet to release a business offering for G+. I'm all for ballsy predictions that are occasionally incorrect, but I also think the folks who were so wrong owe an authentic accounting of what caused their predictions to be so wildly inaccurate. Are they hungrier than the average consumer for something new? Do they have biases that prevent an honest evaluation of Facebook? When they wrote their G+ raves, were they perhaps more interested in creating traffic-generating content than accurate insight?
   
• Closely related to the prior item, shouldn't we expect Google to play a little straighter with their Google+ facts and data? Perhaps the issue is one of semantics--as a social network, it is clear G+ is not setting the world on fire, but as a "social layer," well, the jury is out. What's the difference? A successful social network requires people to actively use it as a sharing and interaction network, while a "social layer" may passively collect (and make available to others) information about peoples' surfing or digital habits. As Google has announced ever more impressive numbers, those actually monitoring Google Plus accounts are left scratching their heads. Where is all this activity when so little seems to be happening on G+? (Example: On Facebook, Starbucks has 30 million fans and routinely gets 15,000 or more people interacting with posts, while on Google+, Starbucks has half a million fans and rarely exceeds 200 people interacting with its posts.) The answer is that Google has an awfully wide (some might say misleading) definition of an active user--it seems Google is counting every time a person logs into Gmail, YouTube, Google.com or Picasa as an active user of G+. Couldn't social media professionals make better decisions about social strategies if they knew how often people used, visited and shared on G+ versus merely interacted with a Google product? I cannot shake the feeling the way Google is reporting G+ usage is misleading and un-Google-like.
   
• Where are the business results delivered by social media? There is no doubt that smart social strategies carefully measured deliver real business value, but you'd have a hard time telling from the endless parade of blog posts and conference presentations in which social media pros crow about the number of new likes, retweets or pins. There is a huge difference between getting people talking and getting them engaged with your brand. (Case in point: The Simpsons is the most "liked" TV show on Facebook yet isn't even the most watched show in its time slot--the number of "live plus same day" viewers of the show is less than 10% of its Facebook fan count.) Every brand interaction is not created equal--a person who likes your brand because you gave them a free widget in a social game is not the same as the person who likes your brand because, you know, they like your brand. In the two years since I shared Forrester's balanced scorecard approach in the report, The ROI of Social Media Marketing, I've been disappointed with how little the conversation around measuring success has advanced. Where are the financial outcomes? The brand lift? The risks mitigated?  Who cares that your latest TV ad campaign garnered a half million views on YouTube if your brand hasn't gained new customers and you haven't shifted market share?  Is anyone else tired of engagement for engagement's sake?

I posted a new blog post over on the Forrester blog about Facebook and the feedback it received regarding a proposed loosening of its privacy policy.  Almost 1000 people have responded and virtually all have voiced disapproval.  Now that Facebook has asked, what will it do with this feedback?  Click here to read my blog post. 

This blog post was cross-posted with the Forrester blog for Interactive Marketing Professionals.

If you saw the headlines yesterday, you might be excused for thinking Twitter was in decline:  “Twitter's growth slows dramatically,” “Twitter popularity declines, growth slows down,” and “Is Twitter 'Traffic' Tanking?”

Twitter was the story of 2009, growing from less than 5 million monthly users to almost 30 million in the course of six months.  People joined, brands rushed in, and words like “Tweet” entered our common vocabulary. 



It was a heady year for Twitter, but has it had its day in the sun?  What do the headlines mean?

First of all, Twitter isn’t going anywhere any time soon.  It’s become ingrained into consumers’ and companies’ communication channels.   And it’s just getting started—under development are more tools to help enterprise customers manage and learn from the billions of tweets produced globally.

Secondly, who said Twitter is for everyone?  It serves a great purpose for many people, but it lacks Facebook’s wide range of applications (and thus wide appeal).  It also lacks a great deal of the noise that many find makes Facebook a less than ideal business networking, news, and sharing environment. 

Lastly (and most importantly) is what the headlines are not conveying.  Yes, overall growth is slowing—how could it not after posting 1,000%-plus growth in such a short time?--but the key for marketers is not the number of Twitterers but the habits, Technographics and psychographics of Twitterers.  As Sean Corcoran and Josh Bernoff demonstrated in their December 2009 report, “Who Flocks To Twitter?,” Twitters are the connected of the connected, overindexing at all Social Media habits.  For example, Twitterers are three times more likely to be Creators (people who create and share content via blog posts and YouTube) as the general US population. 

Twitter’s growth may slow (or perhaps it will see an @oprah-like bounce now that @billgates has joined and is generating PR), but its value to those who Twitter and to marketers is not in question into the very foreseeable future. 

Related articles by Zemanta

• A Third of Adults Now Post to Sites Like Facebook, Twitter Once a Week (blogs.wsj.com)
• Forrester Research's new Social Technographics ladder (stuartbruce.biz)
• Twitter's Growth Slows Dramatically (readwriteweb.com)
• Yesterday Was Twitter's Highest Usage Day Ever. Today Will Be Bigger. (techcrunch.com)