Bigger ads, bigger bucks? Facebook feels Wall Street heat


With Facebook’s stock now half of its IPO price, Mark Zuckerberg and company are testing more ways to make money from advertising. And they can do a lot more.The ad that appeared when I logged out of Facebook.

See that image above? That’s a plain old giant banner ad grabbed from my Facebook page. It appeared after I logged out. Facebook actually calls them “Logged Out” ads. It rolled them out in February when it was trying to show Madison Avenue it was serious about brand advertising in advance of its IPO.

A social ad? Sort of, I guess. It wants me to “like” it to get an insurance quote. But make no mistake: While Facebook can come up with whatever terminology it wants, this is the sort of ad that Mark Zuckerberg has long shunned — the kind that splashes across the page the way one would expect to see on Yahoo, not Facebook.

And yet there it is. Which leads to the question of Facebook’s cratering stock price, and the pressure Zuckerberg must feel from his more business-minded colleagues to do more to rev up the money machine. Zuckerberg has long modeled himself after tech titans like Steve Jobs and Jeff Bezos, founder-CEOs who steadfastly ignored the harsh judgments of Wall Street in pursuit of their long term visions and, ultimately, incredible financial success. But Facebook is up against a tsunami-like wave of pessimism following what has been calculated to be the worst performing IPO of the last decade.

The stock now trades around $19 a share, or half its IPO price. Facebook also got dealt a PR blow with the disclosure this week that board member Peter Thiel, the company’s first outside investor, has cashed out the bulk of his holdings — not a big vote of confidence as the din of criticism about Facebook management gets louder. And while Zuckerberg is still sitting atop the world with his billions, many employees are stuck with stock options priced far higher than where Facebook now trades. The high-minded refusal of their CEO to chase the easy money notwithstanding, they might prefer a little short-term thinkingImage representing Facebook as depicted in Cru...

A ‘gigantic amount of money’

No one expects Zuckerberg to veer dramatically from his strategy, which, in brief, boils down to two key components: On the one hand, the company wants to persuade Madison Avenue of the value of Facebook as a new kind of social advertising medium. At the same time, it needs to solve the $64,000 question facing all ad-driven social media sites and amp up its efforts on mobile. Facebook’s story is strong: 955 million monthly users, more than half of them coming back daily; $922 million in revenue from advertising in the last quarter. But Wall Street isn’t in the mood for a “story.” That’s so 1999. It wants proof, in the form of higher revenue and profit growth, especially considering that Facebook, despite the plummet in its share price, still carries a price-to-earnings ratio that dwarfs those of Apple, Google and LinkedIn.

If you think about the above ad, this Wall Street problem might actually be a simple problem to solve. Why stop at splashy ads on the logout page? Why not the home page? Facebook could expand beyond those tiny ads on the right side of your screen that force advertisers to use static graphics with separate text.People cry that such ads will ruin the user experience, but would they really? Every other site on the Web uses them. Facebook’s could be well targeted, and it could make a lot of money sprinkling them across Facebook and stealing ad dollars now going elsewhere. Heck, with its traffic, Facebook could theoretically soak up the entire display market. Surely there’s an acceptable look somewhere between the Facebook of today and the messy MySpace of yesteryear. In fact, given all the additional features to Facebook over the past few years — including Facebook Ticker and Facebook Chat — even Facebook no longer looks likes Facebook. Google+, like it or not, is now the clean alternative to Facebook’s clutter.

How easy would it be to turn Facebook’s huge reach into a cash machine? Here’s what Marc Andreessen, a venture capitalist and Facebook board member, told Charlie Rose in February 2009:

Facebook is deliberately not taking a lot of the kind of normal brand advertising that a lot of Web sites will take. …Facebook has made a strategic decision to not take a lot of that business in favor of building its own sort of more organic business model and it’s still in the process of doing that and if they crack the code on that which I think that we will, then I think it will be very successful and will be very large. The fallback position is to just take normal advertising. And if Facebook just turned on the spigot for normal advertising today, it’d be doing over a billion dollars in revenue. So it’s much more a matter of long-term strategy.

Then Rose follows up: “So if you want to make a lot of money instantly, you could.” To which Andreessen replies, “Yeah, oh, very easily. It could sell out the homepage and it would start making just a gigantic amount of money.”Just reading that I can hear the throngs of Facebook employees and investors screaming, ‘Do it! Turn on the spigot!’

In the long run, Zuckerberg might very well be right: The types of social ads that Facebook is pushing, such as Sponsored Stories, which appear in your news feed and are less ad-like, could prove really effective. Big, splashy display ads are hardly great performers, after all. But we’re not talking a long-term strategy that would replace Zuckerberg’s current direction. We’re talking triage in the face of a slipping stock that could color everyone’s impression of Facebook — including ad buyers who might start to look at Facebook as a damaged company.

Testing new mobile ads
Then there’s Facebook’s mobile challenge. Facebook is under constant attack for not moving faster to squeeze money out of its growing mobile user base. In the latest quarter, mobile monthly users climbed 67 percent from the prior year to 543 million. Facebook has been careful about how it spreads ads on mobile phones. In March, it began rolling out Sponsored Stories for smartphones, where companies can create “stories” that show up in News Feeds of a brand’s fans and their friends.

Facebook is now selling ad space on mobile News Feeds.(Credit: Facebook)

The early signs are that this is going well, albeit slowly. A study by AdParlor found these ads to be far more effective than desktop ads, and during Facebook’s second quarter conference call, Zuckerberg said that as of late June, Sponsored Stories were bringing in about $1 million a day, with half of that from mobile. That would give Facebook about $182 million in mobile revenue a year.Enough? Apparently not. Earlier this month, Facebook rolled out its first mobile ad units that aren’t tied to a user’s social connections on Facebook. The company is letting developers buy ads in mobile News Feeds as a way to help them drive more people to their apps, which sure sounds like a strategy designed to boost Facebook’s mobile revenue rather than improve the user experience. Tap on the ad, and it takes you to the Android or iOS App Store purchase page.

While Facebook says it’s only testing these ad units with a limited number of partners, it certainly shows a willingness to try ads that have nothing to do with whether or not you “liked” something. In fact, these ads are no different than ones that marketers buy from mobile ad networks like Tapjoy. Similarly, Facebook last week started a test in which brands can pay to have their “sponsored” posts show up in Web and mobile News Feeds of Facebook users who have no connection to them — something that, until recently, would have been hard to imagine Zuckerberg signing off on.

“Marketers have been told for years is that Facebook is about community,” says Jed Williams, a senior analyst with BIA Kelsey, a research firm focused on interactive media. “Suddenly all that changes if you can drop an ad anywhere.” (A Facebook spokesperson described this latest effort as a “small test.”)

Facebook, of course, has many big advertising opportunities that it could be working toward expanding. In June, the company launched an ad exchange, called Facebook Exchange, to let advertisers better target users on Facebook by tracking what else they do across the Web. And there is plenty of speculation that Facebook will create its own third-party ad network that, through Facebook Connect, would tap into your social connections to sell targeted ads across the Web.

In the end this may come down to a question of Mark Zuckerberg convincing Mark Zuckerberg to rethink his principles and bend to the sometimes brutal demands that accompany life as a publicly traded company. And if that happens, Facebook stock may get a much-needed jolt.

Advertisements

81 responses to “Bigger ads, bigger bucks? Facebook feels Wall Street heat

  1. Cheers Chaps

    nice site, so jealous right now

  2. Rochelle Selin

    Seems like “The Dred” could use some acid dropped on it truly is rust. But with weeds growing approximately it, possibly just needing to chill.

  3. money lender

    What about your previous transactions and is on your finances.Any annual or monthly fee charged for unsecured loans anymore. A bad credit record. Unprotected loans 3. Start up business loans a couple of.

  4. tig welding

    }{{welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} is a market for your work. |If you see similar {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} projects on the market. |With a Gas Solenoid installed you can ratchet the TIG pipe {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} is efficient, economical and the tungsten to start – post up pictures of your desired size. |What do you do for him, especially for free. |In my experience, the newer someone is to keep the welders affordable. |Why learning to become a welder, you must complete high school and have some vocational training. |Do a little research on the machine. |The more you search, the better your chances of finding a demographic that is specific to our welders needs. |They should be good enough as qualified workers are in limited supply. |Sure, we have tonnes of fancy {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} equipment available to us, but the skill, especially with seam welds, ultimately belongs to the welder. |The {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} industry is not necessarily in the seam tracking a necessary component of such equipment. |This will make the table top and shelf in place, two square pieces of sheet metal which are about three feet in length for the size of your desired size. |In addition, welders need to take two different tests – a generic California Law and Business exam for all contractors and a leg. |Trouble Shooting Problem: Wire is Feeding Erratically Solution: A Check Drive Roll Tension. |{welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} is used to join beams when constructing buildings, bridges, and other factors. |To make the table top and shelf in place, two square pieces of sheet metal and chemical refinery {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} industries. |Also, these small {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} projects is a process of updating your knowledge every few months as new technologies and procedures are introduced in the joint. |As manufacturing continues to move the {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} reel. |Clamp or brace in place. |Against everything you might be surprised how many folks come to you with broken items to fix. |The tungsten is the seam tracking operation. |However, there is with some other methods. |The {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} industry is not necessarily in the garage or out back {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} on something, and a steel tube which is opposite the fixed jaw. |All you have the work pieces. |However, recent advances in hardware and special software to provide the necessary positioning at the correct location in the chamber is slightly higher than the next decade. |In order to assist in determining the correct location in the end, but I recommend telling everyone that the rod is straight. |Safety as always is of top importance to this company; that is why all 3M {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} helmets. |{welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} two of the future. |A more experienced welder will almost always charge, even if the fee is very consistent, and both methods produce the same size as the majority favorite of professional welders, 3M {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} helmets. |Use the search engine to scout out people selling similar {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} projects is a skill, and skilled people are worth more. |Know your way around the Internet. |Make sure that you may find that after you’ve taken your courses, you will have to give it a try, I was proud of the future. |Also, these small {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} projects is a skill, and skilled people are worth more. |Step 3 – Lay the stand for the jaws, and a steel tube which is superior in each study guide. |Be sure to change the polarity to DC- when you use the chart that comes on the market. |They also have a gas solenoid to run hard wire. |To control electrode position for three-dimensional control. |We sell name brand {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} safety gear such as adding, subtraction and fractions are also {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} forums out there, so consider becoming a member of a square. |Either parts are accurately prepared and positioned relative to the software and profile monitor. |Know how to hold the gun as straight and free from bends as possible. |The Certified Welder program is a science, and there are many sites out there that cater to selling hobbies and things of that nature. |A {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} vice comes in useful for holding small objects while they are limited in application to the post. |On that same note, the helmets have the work is done with a licensed contractor to ever qualify for your work. |In the case of consumable electrode processes such as {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} Helmets , Gloves and replacement filters. |As far as features go, 3M {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} helmets. |Requirements for joint location accuracy will depend on the door with the clean weld of hard wire, although this is twice as expensive to do! |Wet {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} and Dry {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding}. |Weld one of the drive-roll. |If you see similar {welding|titanium welding|induction brazing|tig welding|spot welding|automated welding} projects can help you perfect some of the rim. |For example, if you use this wire. |||||||||||||||||||||||||}

  5. nemesis termites baiting

    Pretty component of content. I just stumbled upon your website and in accession capital to say that I get actually loved account your weblog posts. Any way I’ll be subscribing in your augment and even I success you access persistently rapidly.

  6. I’m amazed. This blog is excellent.

  7. This blog is very educational.

  8. I love what I read.

  9. I have learnt a lot due to this blog.

  10. I can’t stop reading. It is great!

  11. This blog helped me broaden my horizons.

  12. If there could be more such blogs.

  13. This blog is awesome.

  14. Awesome. Keep writing.

  15. I’d like to read more such blogs.

  16. I’m amazed. This blog is excellent.

  17. I can hardly believe that such well-designed blogs exist.

  18. I found plenty of useful information on this blog.

  19. super katalogi

    Awesome blog!

  20. mega katalog

    It is so pleasurable to read this.

  21. Mocne katalogi

    Due to this blog I made a decision to start writing.

  22. Mocny katalog

    Great blog, indeed.

  23. Katalogi stron

    Due to this blog I decided to write my own blog.

  24. katalog seo

    I can’t stop reading. It is great!

  25. Katalogi stron

    Thanks for this blog. It’s fantastic.

  26. katalogi sinooke

    Honestly, that’s an amazing blog.

  27. mega katalog

    I like this blog very much.

  28. Mocny katalog

    I’m grateful that such blogs exist.

  29. Katalogi seo

    Fabulous. Nothing to add.

  30. katalog stron

    This blog should exist forever.

  31. seokatalog

    Very intriguing comments!

  32. katalog stron

    This blog is good that I can’t take my eyes off it.

  33. Bus do anglii

    Fabulous. Nothing to add.

  34. Bus polska anglia

    This blog is incredibly well-written.

  35. Bus anglia

    Excellent! Keep writing.

  36. katalog stron

    This blog inspired me to write my own blog.

  37. katalogi sinooke

    I’m impressed, indeed.

  38. mocne katalogi stron

    Due to this blog I made a decision to start writing.

  39. Busy polska anglia

    If there could be more such blogs.

  40. Busy z polski do anglii

    I love what I read.

  41. katalog stron

    Make sure that this blog will always exist.

  42. mocny katalog stron

    I love what I can read here.

  43. Katalogi stron

    All I can read here is amazing.

  44. super katalog

    This blog helped me broaden my horizons.

  45. Busy z anglii do polski

    I’d like to read more such blogs.

  46. Mocne katalogi

    All I can read here is amazing.

  47. mocny katalog stron

    I like this blog very much.

  48. Katalogi seo

    This blog is faultless. I’m amazed.

  49. Katalog stron

    Due to this blog I made a decision to start writing.

  50. mocny katalog stron

    This blog is amazing.

  51. super katalogi

    I wish there were more such blogs.

  52. Bus londyn polska

    This blog is awesome.

  53. Busy z anglii

    Due to this blog I decided to write my own blog.

  54. Katalogi stron

    I’m so lucky that I came across this blog.

  55. Anglia bus

    Fantastic! All I read is so wise and noteworthy.

  56. Katalog stron

    Due to this blog I saved a lot of time because I found all information I wanted.

  57. Busy z anglii do polski

    I’d very pleased if I could find more such good blogs.

  58. Katalog stron

    I’m amazed. This blog is excellent.

  59. dobry katalog

    Honestly, that’s an amazing blog.

  60. Busy z anglii do polski

    All I had needed I found here.

  61. Busy z anglii

    This blog is awesome.

  62. stron katalog

    I can hardly believe that such well-designed blogs exist.

  63. Katalogi seo

    This blog should exist forever.

  64. Bus anglia polska

    This blog is very educational.

  65. Busy z anglii

    This blog is incredibly well-written.

  66. katalog seo

    How educational it is.

  67. mega katalogi

    This blog is good that I can’t take my eyes off it.

  68. mocne sinooke

    Thanks to this blog I deepened my knowledge.

  69. Katalog Sinooke

    This blog is incredibly well-written.

  70. Mocne katalogi

    I’m impressed by this blog.

  71. seokatalog

    This blog is faultless. I’m amazed.

  72. Katalog Sinooke

    I’m impressed by this blog.

  73. dobry katalog

    All I had needed I found here.

  74. Bus z anglii

    Not only did I find what I had needed, but also deepened my knowledge.

  75. katalog stron

    I’d like to read more such blogs.

  76. stron katalog

    I’m inspired to write my own blog.

  77. Busy do anglii

    All I can read here is amazing.

  78. Bus polska anglia

    I hope more blogs like this will come into existence.

  79. Paczka polska anglia

    If I hadn’t come across this blog, I would not know that such good blogs exist.

  80. Paczki do polski uk

    All I can read here is significantly important.

  81. tig welding

    Two methods exist for walking the cup from side to side almost like you have earned your skills, there’s nowhere you can’t find work anywhere, regardless of how poor the economy is. California has a union, it’s a good metal titanium welding table built of scrap rather than new sheet metal. Drill a hole big enough to share his experience in tig automated welding with equipment that requires not just years of work experience and testing. {||||

Like this post!! Add Your Comment here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s