Kicking Facebook While It's Up

Facebook (NASDAQ: FB  ) is gearing up for what should be another strong quarter tomorrow, but not everyone is impressed by the current state of the leading social networking website operator. In a scathing report, market specialist Forrester Research argues that the best marketing strategy could be to just lean on it as a free resource.

"Facebook is failing marketers," begins Forrester's open letter to Facebook CEO Mark Zuckerberg.

It's not merely a knee-jerk opinion. Forrester "surveyed 395 marketers and eBusiness executives at large companies," and Facebook came in dead last in satisfaction when it comes to creating business value against other digital marketing opportunities.

It's easy to see why LinkedIn (NYSE: LNKD  ) would rank ahead of Facebook. The social networking hub for professionals attracts the hiring and the hired. It's a place for head hunters. It's a place to make industry contacts. It's not just teens swapping Bitstrips or trendy memes. On a scale of 1 to 5, with higher ratings indicating greater business value satisfaction, LinkedIn wound up in the middle of the pack at 3.7. Facebook is at the bottom with 3.54. It's a pretty tight range with on-site ratings and reviews topping the list at 3.84. Google (NASDAQ: GOOGL  ) should be happy to see search marketing at a close second with a 3.83 rating.

However, Facebook has to be shaking its head to see Google's own Google Plus and its tricky-to-monetize YouTube ranking ahead of Facebook. Even Twitter  (NYSE: TWTR  ) -- believe it or not -- has a higher rating with marketers and eBusiness execs when it comes to paying up for promotion. 

"I know this statement sounds remarkable, perhaps even unbelievable," Forrester's Nate Elliott continues. "After all, you offer marketers access to the largest audience in media history and you know a remarkable amount about each of your users."

Yes, it is surprising. Forrester doesn't believe that Facebook is doomed. Elliott concludes that Facebook still has time to correct the two things that it doesn't seem to be getting right at the moment. He believes that the magnetic site needs to drive genuine engagement between companies and their customers. He also feels that Facebook needs to do a better job of using its growing social data to serve more relevant ads. Forrester estimates that just 15% of the ads on the site are leveraging Facebook's social insight.

Forrester may be right, but it's hard to imagine a company that doesn't have a paying relationship with Facebook -- settling for viral victories and being sought out by site users -- faring better than advertisers that can get their brands featured prominently on Facebook to their fans (and perhaps, more important, the friends of their fans). This report can't be ignored, though naturally it may not hold as much weight if Facebook serves up another winning quarter tomorrow.

Analysts see revenue climbing 51% and earnings soaring even higher for the quarter. Marketers certainly seem to be flocking to Facebook. As long as Facebook can find a way to tame the contagion of humorless Bitstrips that have taken over the site in recent weeks, it should be just fine.

Wait a minute. You don't think that Google or Twitter is behind Bitstrips in a devilish plot to shake out Facebook regulars, do you?

Make excellent long-term investments
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

 


Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 29, 2013, at 9:01 PM, cameron12x wrote:

    The range of values between first and last place was so tight that nothing of value really could be gleaned from this report, other than Forrester spinning in the most negative way possible towards Facebook.

    Not exactly the best research conclusion.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2704286, ~/Articles/ArticleHandler.aspx, 12/19/2014 2:26:26 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement