Facebook’s Advertisers -We Have a Problem Houston

Facebook’s Advertisers We Have a Problem Houston

Within less than a few weeks, Facebook goes public on May 18, 2012, with it’s Initial Public Offering -IPO to preferred investors. 

The clout for this IPO is 900 plus million users, but who are these users. Well most of them live outside of the USA and Canada markets, but we don’t know much else about them.

Apparently Facebook’s clout or claim to fame is worrying advertisers and they are asking those same questions, who are these people?

Are they 13 year old users, are they mostly living in India, what are the demographics of Facebook users? No one knows except for Facebook. Will advertisers get their money’s worth buying ads on Facebook or is Facebook making all the money?

Facebook Has No Metrics – We Have a Problem Houston

Facebook has not divulged it’s own metrics which is the website’s conversion rates, or the evaluation the performance of advertising. Did anyone check Conversions for Dummies yet?  This pie and the sky discussion of how much money Facebook is worth begs the question where are the figures to back it up?  The “Likes” and “Sponsored Post Ads” means very little when advertisers are laying down big cash for ads on Facebook.

If for instance an advertisers pays $20,000 and only gets 5,000 visitors to their ad link, which produces 25 sales, is Facebook good for their business? There is no measurement that Facebook provides on conversions, or key performance indicators for their traffic. As a business owner, you’d have to work on blind faith to advertise on Facebook. 

What Frustrates Facebook’s Advertisers

“Facebook relies on a “trust me” mentality, luring advertisers with its big, addicted audience. But, these companies have started getting antsy. The more money they pump into this murky “money-maker” the more they want to know what its getting them. “Clients, for the very first time, are starting to question the measurement issue” Martin Sorrell, CEO of WPP, an advertising and marketing firm said at a conference, note Raice and Vranica.  “[They] are increasingly starting to look at the value of those investments,” he continued. That’s a very hard something for Facebook to provide. Ad clicks don’t necessarily translate into direct sales.” Yahoo News

Measuring Your Audience – Measuring Facebook

Facebook is actually keeping that information private from advertisers, your supposed to “Trust” Facebook. Facebook does not allow advertisers third party cookies for advertisers to track their clicks.

Recently, the company has been charged with selling private user information to the US government in the name of cyber security, trust has become an issue for users as well.

Currently, Facebook has no ads in it’s news feed accessed by Smartphone apps however they are planning on changing this with featured local based ads and stories.

Facebook’s revenues in the last quarter dropped 7.5 percent to start off 2012.

Curated News

The Atlantic Wire

Facebook Pre-IPO Rush to Make Money Off Of You

Business Insider

4 Problems with Facebook’s Business Model that Would Kill Any Start-Up

Facebook’s Sad IPO Offering

The time is here and Facebook shares will be the most highly sought after stock on the market, creating such demand took a few years of planning.

Facebook’s IPO Will Only Be Sold to “Preferred Investors”

But for the public to get excited about cashing in on Facebook’s IPO we have bad news.

Only the largest Preferred Investors will have a crack at shares, that would be large mutual funds, pension funds all directed by Goldman Sachs and Morgan Stanley only to their preferred high net worth clients.

Too bad the little investor or user, will have to wait until after the IPO until the shares trade at a much higher price than there were initially offered on May 18th on the stock market.

Facebook's Sad IPO Offering

While the preferred investors are buying up stock on May 18, they can turn around and sell to the secondary market thereby making a quick profit.

The reports issued by the Associated Press indicate the value of the first offering will raise billions, as much as over 100 billion to the company. When the day of trading is done the company is expected to be failed at 75 to 100 billion and join Google in the web’s monster investments booms.

The IPO kickoff will start on May 7th and will involve the CEO Mark Zuckerberg who will take part in some of the meetings where the media giant will be on the road to present their offering to investors. This phase will last approximately two weeks leading up to the May 18th, 2012 IPO when the company’s shares will be on the market.

Facebook’s Growing Profits over the Years

Making money is the name of the game, and Facebook’s ability to generate revenue is unprecedented in recent years:

2009 777 million in profits
2010 1.974 billion in profits
2011 3.71 billion in profits

Facebook’s revenues doubles every year for the past three years.

Facebook’s Users

The market is very keen on this large stepping stone into making Facebook public with 901 million users, it represents the largest social network in the world.

However, the statistics on Facebook’s users, demographics, time on site and other reports are not audited by independent verifications and only come from the company itself. A set of stats on the demographics would clear up exactly who is using Facebook from 13 year old to 60 year old and all age groups in between.

Recently, Facebook acquired Instagram for one billion dollars indicating their interest in the mobile marketing industry.

Over “50% of Facebook users access by mobile devices (smartphones and tablets) and 80 % of users are outside the US and Canada.” This indicates the larger markets are foreigners namely EU, and India.

China’s market seems to be a mystery and a recent trip to China by Zuckerberg did not allay any certainty on entering that market which remains relatively closed to Western media.

Google learned a painful lesson two years ago over censorship laws in China, and a mess of the same regulations on content prevents Facebook from tacking into China’s firewall.

Facebook’s ticket symbol will be FB on the Nasdaq.

Curated News

Daily Mail Online

Facebook Will Float on the Stockmarket on May 18 Valued at 100 Billion

USA Today

Facebook IPO Filings Puts High Value on Social Network