The Day Facebook Couldn’t Monetize

            A dark cloud has been looming over the social media phenomenon that has piqued the interest of young minds. The idea to take the entire social experience and put it online was a major transformation that has constantly increased its user activity, but like any good business it must be profitable.  When Facebook went public its price was set at $38.00 per share. Everyone remembers that day like it was Christmas, because even if you didn’t watch the price fall that day, you never heard it take off as expected. The problem: how much revenue are those advertisements really generating?

Advertising made up 98% of Facebook’s revenue in 2009 and 82% in the first quarter of 2012. Even though they are working towards developing other outlets, it’s clear that a lack of advertising revenue is the biggest factor holding shares of Facebook at such a low price. In the Facebook prospectus, their risk factors include time spent on Facebook and the increase in mobile usage of the Facebook app that does not currently show any advertising. Let’s think about who uses Facebook and when they are using it. Majority of users are high school and college students. Aside from when college students are in class or studying in the library, they are more than likely using the Facebook app on their IPhone. High school students are probably checking their Facebook news feed in between classes and probably even during class but since they aren’t typically allowed computers, they do this all on their IPhone.  So there’s a large piece of advertising real estate on the mobile phone that is not being developed. But how do you get people to look at advertisements without losing users?

                Here are two success stories with advertising. What’s something we use almost every day that has advertisements on it but we constantly use it to find that hilarious video of a cat chasing a laser pointer, or watch that brand new music video of Justin Bieber? Youtube has been at the heart of this debate simply because it has successfully integrated advertisements into its platform. After watching several videos it will eventually pop up with a 15 or 30 second advertisement. We don’t like them, but we deal with it. Hulu is another great example of successfully integrating advertisements. We watch a short ad before our TV show comes on, we watch a longer ad in the middle of the show, and we watch a short ad towards the end of the end of the show. In two minutes out of a thirty minute show we have all of our advertisements. This works because it’s better than the alternative. I’d rather give two minutes split up in the three segments than give 9 minutes split up four times throughout my show as typically seen on cable TV. But what’s the alternative to Facebook? The age of calling someone on the phone to see how they’re doing? Well that’s just ridiculous.

                So can Facebook increase revenue through advertisements or will users continually write them off as useless distractions? It’s possible if they use some of the aforementioned methods but it will take guinea pig trials and, so far, their attempts have failed.  It was said best in Aaron Sorkin’s screenplay for The Social Network when the character Mark Zuckerberg said, “TheFacebook is cool, that’s what it’s got going for it. You don’t want to ruin it with ads because ads aren’t cool.”

Google+: Social Media for Business

            Perhaps the biggest issue in small business startups is the underfunding of their marketing and advertising efforts. The creators are much more focused on their product than they are on the development of their market. It’s the problem of having a product, but no one to sell it too. It’s the starving artist syndrome. An artist may create the best piece of work possible, but if no one knows or appreciates the work then it becomes rendered useless and no profit is made. Small businesses can be like starving artists, but luckily there are ways to develop their market base without costing them thousands of dollars in advertising. Social media has provided a gateway for microenterprise to enter and compete in the business world today. Practically every small business develops a social media page, whether it’s on Facebook, Twitter, LinkedIn, and now Google+. Google+ has become another useful tool for small businesses because when a potential customer wants to learn more about a company what’s the first thing they do? They, “Google,” it. Google holds 80% of the search market online.[1] That means that if Google develops a social media aspect to its search engine capabilities you better believe there will be a lot of exposure for the companies that use it. However, like all social media marketing we have to know how to use these free sites effectively. Here are a few tips for using Google+ and how they will help your company.

1. The power of the +

Google+ created this interesting way of directly linking the business page of your company to the Google search engine. Whenever you’d like to see a company’s Google+ page you simply have to go to Google and search, “+Company’s name.” This will send you directly to the company’s profile on Google+. Try this for yourself.

2. Make use of the Hangout

Google+ added a feature to interact with customers on a face-to-face basis. This is called a hangout. Potential customers can see that you are online and open for conversation. It can be restricted to just your customer based Circle so they may interact with the owner and each other. Since small business relies very heavily on it’s customer’s comments and opinions it’s important to maintain a constant connection with them. This can all be achieved through Google+ Hangouts.

3. Be sure to post your videos to YouTube

On October 9, 2006 Google acquired YouTube for $1.65 billion. This means that the two sites are inherently linked to each other. So not only will your videos be posted on two of the biggest networking sites, the sites will direct the user to the other page. There’s even a convenient link on everyone’s Google+ page for YouTube. The more hits that the video gets, the more the company’s name is produced in the Google search and the further up the company goes as the first link customers will see when they Google it.

4. Don’t say the same thing twice

One of the most apparent mistakes companies make when they start using social media is they get onto every site and post the same thing. This is not what you should do! Simply adding the same thing to three different sites will not make people want to constantly be checking each site for new information. With all of its interactive capabilities Google+ should be used for videos and direct customer acquisition. It’s not Twitter so you shouldn’t treat it like Twitter. Your goal here is exposure on the Google search engine.

5. The +1 function

Another great thing that Google+ offers is the ability to search through Google and +1 anything you see in the Google search engine. As you’re developing your company people will see what you are interested in, following, and inspired by as long as you click +1. Remember how we said Google controls 80% of the search engine market? Well, the more often customers +1 your site, profile, or page the higher it will show when new customers search for your business.

            Small businesses need a lot of exposure and Google+ has provided that marketing tool. There is no reason not to be on Google+. Yes, it is another social media site that must be constantly updated. Yes, you will have to learn how to use it effectively. Yes, it is worth it. The amount of potential customers and exposure that Google+ provides will be endless. This is the 21^st Century marketing tool for microenterprise. Learn it, use it, and see the results for yourself.

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[1] Rogers, Kate. "Why and How Your Business Should Use Google+." Fox Small Business Center. Fox News, 2 Dec. 2011. Web. 5 Dec. 2011. <http://smallbusiness.foxbusiness.com/technology-web/2011/12/02/why-and-how-your-business-should-use-google/>.