Facebook's Open Letter to Forrester

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Facebook (NASDAQ: FB  ) seems to be having the last laugh after posting blowout quarterly results yesterday. Earlier in the week, tech research and advisory firm Forrester Research had called out the world's largest social networking website in an open letter to Facebook CEO Mark Zuckerberg.

"Facebook is failing marketers," it begins, leaning on a survey conducted of nearly 400 marketers and eBusiness execs at major corporations that showed the social giant dead last in perceived value creation of budgeted marketing campaigns.

"I hope our research convinces you and your team to change course," it concludes.

Well, Zuckerberg didn't really craft a response to the report, but since it is Halloween -- and we all have poetic license to become someone else this one day of the year -- I imagine that if I were Zuckerberg, I would counter with a little something like this...

Dear Forrester:

Thanks for the generous offer, but I think we'll stick to the course that we're on. If you didn't catch last night's financial report, we're in pretty good shape. Online advertising revenue soared 66% this past quarter, and that's better than the public companies behind the digital tools that are -- according to your report -- more effective for marketers.

Earlier this week, LinkedIn (NYSE: LNKD  ) mustered a mere 38% year-over-year pop in marketing solutions revenue. LinkedIn did grow its membership base by 38% to 295 million users, but that only tells you that marketers are paying as much per user as they were a year ago. While our monthly active users only inched 18% higher to 1.19 billion, our advertisers are apparently willing to spend a lot more on our platform per user than they were a year ago. Oh, and don't think the fact that we're four times as popular in terms of users than LinkedIn is lost on us. We know that we could take on LinkedIn if we really wanted to offer that layer of career-minded networking.

A week before that, it was Google (NASDAQ: GOOGL  ) checking in with a 22% advance on the top line of Google-owned sites. We grew our online advertising revenue three times the rate of Google and it's my team that needs to change course? You may want to recheck your compass before offering us navigation tips.

It's easy to see why LinkedIn ranked ahead of us among the white-collared pros that responded to your survey. There's real power in LinkedIn to reach out to like-minded professionals for job openings and other high-value opportunities. Google's flagship search engine is also the global leader. We think we'll eventually be able to raise the bar on search -- Graph Search is a work in progress -- and give Google a run for its money, but for now I don't have a beef with Google.com and LinkedIn earning higher marks. However, how does Twitter, Google+, or Google's YouTube beat us out? Seriously. I thought Google+ was a type of gasoline.

The results of your survey were also in a pretty tight range. On a scale from 1 to 5, where higher scores indicate higher satisfaction with marketers, the range only ran from us at the bottom with 3.54 and the top digital tool at 3.84. Either we're not that bad, or the best isn't that good.

I get it. We're not as awesome as we should be. Your suggestions of getting better at driving genuine engagement between companies and their customers as well as the lack of display ad effectiveness aren't lost on us. But you know we're going to get this right. We know too much about our 1.19 billion active users -- 1,189,999,605 more people than you surveyed for your report -- to get this wrong. This just isn't the right time to flex our marketing muscle based on how much we know about our users. Folks are too leery of cookies, open-ended privacy policies, and the NSA at the moment for us to show the marketing world what we've got. When the time is right, we'll knock your socks off. We'll also tell you where your friends like to buy their socks if you need new ones.

So, thanks again for the kind offer to fix Facebook, but -- hey -- we got this.  

Your friend,

Mark

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  • Report this Comment On October 31, 2013, at 10:37 PM, boulterjosh wrote:

    Elite

  • Report this Comment On November 01, 2013, at 12:51 AM, secularinvestor wrote:

    Nice .....LOL

    This Forrester "survey" (if we can call it such) flies in the face of all other research that I have seen about Facebook. It has rightly been widely criticised and ridiculed.

    Here is a devastating critique by a former analyst for Jupiter (later acquired by Forrester)

    "Forrester Is Failing Marketers With BS Data About Facebook"

    finance.yahoo(DOT)com/news/forrester-failing-marketers-bs-data-125442423.html

    Was it coincidental that Forrester's rogue report came out just before Facebook earnings?

    Was it linked to the incredible volatility in the after market as Facebook's stellar results beating analysts EPS consensus by more than 30%?

    Were they planning a bear raid thwarted by Facebook's unexpectedly good results?.

    The share price rocketed by around 15% and then pulled all the way back to negative territory on spurious grounds that some young teens were using Facebook less in favor of Twitter and Instagram (which belongs to Facebook, so a win/win for them).

    This was despite Facebook explaining that overall teen numbers remained the same, which must mean older teens were using it more, and total total daily users (DAUs) climbed 61% and Mobile DAUs climbed 55% YonY.

    Another excuse for the attempted sell off was that Facebook announced that they were going stop increasing the frequency of adverts. Facebook results show that there is huge demand for adverts. So what happens when demand exceed supply?

    The fact is that despite billions spent trying to force down Facebook's share price it ended up on the day, because most investors recognise the company is still in its infancy, is growing very fast and has huge headroom to grow.

    There is one data point which indicates just how much potential growth there is. They have over 20 million businesses with pages, of which only 1 million have started to pay for advertising. On a recent shopping trip I noticed that most business were on Facebook. I asked many if Facebook was helpful? Every one replied extremely positively about just how much new business Facebook was generating. I asked them if they paid for advertising? Only one said yes. I asked the others if they were prepared to pay for advertising? Every single one replied YES.

    I know this is only anecdotal evidence, but it coincides with all the data showing the extremely strong growth Facebook is enjoying.

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