Menu Close

Goodbye marketers: Facebook’s moment of truth

Marketing professionals are facing a moment of truth as reaching customers becomes easier than ever for non-professionals. Boston Public Library/Flickr

The effectiveness of Facebook advertising as a marketing tool for companies has come under intense scrutiny in recent weeks.

The first volley was fired by Nate Elliot, the principal analyst at Forrester, a global research and advisory firm. Elliot released a scathing open letter to Facebook CEO Mark Zuckerberg, accusing the company of “failing marketers”.

The letter was supported by research conducted for a Forrester report, coming only two days before Facebook’s earnings announcement. It claimed Facebook had abandoned social marketers, and advocated for companies not to dedicate a paid ad budget for the site.

It’s a report that has created plenty of conversations offline and online.

In a way this could be “el momento de la verded” for Nate Elliot and the marketing professionals. This moment of truth in the 1932 Hemingway novel “Death in the Afternoon” puts to the test the courage of the matador (Zuckerberg) at the point when the matador is about to kill the bull (Nate and marketing professionals).

In serving marketing professionals, Elliot has inadvertently let the cat out of the bag. Marketers have not taken the time to understand social media or Facebook’s advertising capability.


What Elliot said

Money Blog News/Flickr

First, your company focuses too little on the thing marketers want most: driving genuine engagement between companies and their customers. Your sales materials tease marketers with the promise that you’ll help them create such connections. But in reality, you rarely do.

Second, your company isn’t good enough at the pure advertising business onto which you’ve shifted your focus. We estimate your site now delivers tens of billions of display ads every day. But fewer than 15% of those ads leverage your ever-growing cache of social data to target relevant audiences.


Marshall McLuhan captured the essence of advertising in new media when, in 1964, he said “the medium is the message”. In the case of Facebook, the medium for co-ordinating 1.19 billion users or roughly 17% of humanity per month is the Facebook news feed of mobile phone and desktop users.

A staggering 500 million mobile Facebook users are active daily. According to its third quarter 2013 results Facebook earned over US$2 billion in revenue with average per user revenue of $1.72 from advertising and payments. In Australia, 56% of the population or 12,800,000 use Facebook.

So it seems the boot is on the other foot. In one survey taken in 2011, 600 CEOs felt the marketing executives lacked in ability to grow their business. A similar study this year found advertising agencies in the same situation as marketers, with CEOs losing any trust these organisations have an ability to help acquire customers.

Google is the world’s largest intentionality database in the world helping marketers understand purchasing intentions based on search results. But Facebook has begun providing ad-targeting capability second to none. You don’t need to be a marketing professional to target ads to people connected to your page or using Facebook.

Precise targeting using location, likes, interests, relationship status, age, gender, education and workplace is a tick box and one click operation. Where else is a marketer to understand who has travelled within the week, used a travel app or who is an Apple iPhone user with select interests from hundreds of categories?

Adobe’s Social Intelligence report was released on the same day as Nate Elliot’s letter. According to the study – which took in 131 billion Facebook ad impressions, 400 million unique visitors and more than 1 billion posts – the platform is driving retail sales with year-on-year return on investment up 58%. The report found Facebook is the platform of choice amongst the 5,000 companies using the Adobe analytics platform.

These findings are starkly different from the picture painted by Forrester.

Shall we perhaps give Elliot the benefit of the doubt and suggest his extreme comments are backward looking and superseded by the Facebook platform capabilities available for marketers and non-marketers alike without depending on ad agencies?

Marketing is transforming from the segmented and start/stop campaign driven activities of the last century to embrace the notion that “markets are conversations” through precise targeting and continuous conversations with mobile Facebook users via the news feed and other innovations or experiments.

Building the relationship first provides the opportunities to sell. Marketing orthodoxy would see large numbers targeted through segmentation, even if doing this is wasteful. “I know that half of my advertising dollars are wasted, I just don’t know which half”, according to John Wanamaker, sometimes regarded as the father of the modern advertising.

Facebook works on an entirely different model – advertising appears in newsfeeds, which serve communities of friends (including friends of friends). It makes it easier to control who you reach by targeting specific groups of people and their extended network, but trust is important, and trust requires relationships.

Any Facebook page administrator is capable of this new marketing, let alone the marketers polled by the Forrester survey. Perhaps for far too long we have regarded marketing as a functional group not a capability for driving business in conjunction with customer service.

Want to write?

Write an article and join a growing community of more than 181,000 academics and researchers from 4,921 institutions.

Register now