Bo Peabody wrote a thought-provoking article for Business Insider called “Facebook And Twitter Will Always Be Crappy Businesses“. I had to respond to a few things:
- It is still too early to tell what brand managers are going to do, particularly on Facebook. You’re talking about a group of businesses (brands and agencies) with highly engrained habits and beliefs after decades of one-way, mass communication with customers. Social media and online advertising is simply new. Media buyers still don’t know how to get their arms around it, or how to efficiently buy it. But mental shifts are happening.
- Proctor & Gamble seems to be making quite an investment in Facebook. Yes, they have a large experimental budget (they’ve been my customers with that budget), but this doesn’t sound like experimenting anymore.
- I’m a big believer in virtual goods when tied to the right experience design. While I’ve attended events where Facebook execs dismiss virtual goods as niche compared to advertising, you know that they have studied the large Chinese web companies which make the bulk of their money from virtual goods of different sorts. Contrary to Bo Peabody’s statement that “[a]ny monetization efforts are going to drive some users away and that will in turn erode value for the users that remain” — one of the benefits of virtual goods is that each user can determine their own level of investment.
But more than anything, I had to raise my eyebrows when Bo Peabody wrote, “Through my experience building Tripod and Everyday Health I’ve concluded that individuals get on the Web for one of two reasons: to find people or to find information.”
Come on Bo, you can’t define the world through your own lense! The dominant activity on Facebook is playing games, and YouTube and Hulu ain’t no slouches either. Yes, I’m talking about entertainment. Furthermore, there is this wee little trend going on. I’ll just put it out there for consideration. It’s only hundreds of billions of dollars, and it’s called ecommerce.