Facebook (FB) executives have been stumping for their company the last few days.
It's not a surprise to me. I wrote last week you should expect lots of positive news out of the company in the next few weeks leading up to the tsunami of shares coming on to the market through IPO lockups this month and next.
I am expecting after November we are going to hear some disappointing traffic numbers out of Facebook.
However, let's discuss what's good about the company.
- It's still got a ton of users and traffic. The bears like to point to a deceleration of growth and a drop in ad page impressions last quarter. But Facebook is still a monster of traffic and advertisers like to reach people.
- Brand pages are very appealing to advertisers and unique compared to the competition. One of the best things about Facebook for advertisers is that they get to have their own pages on Facebook. Not only does this mean they get to control its look and feel, but that the can have a conservation"with their users. This is much more intimate than any other site out their today. Google (GOOG) can't give them that conversation. Neither can Yahoo! (YHOO). And Twitter isn't able to do that. So, brands love this chance to interact with people interested in their products. A long time ago, AOL pushed keywords for advertisers. They got behind it then for the same reasons they're getting behind it now with Facebook. Same discussion point. Eventually there will be a better way for advertisers to talk to their users. For now, Facebook pages are it.
- Users like the Facebook pages of advertisers. There was a study out yesterday saying that a majority of users preferred advertisers' Facebook pages to their websites.
- Digital ad spend is going to keep going up.
So, all this is the good.
What's the big risk for Facebook?
What if the traffic and users just hit an inflection point? If users are truly starting to get bored with Facebook, they'll leave and the conversation brands will be having their users will go down. So, there is no bigger threat to Facebook than relevance.
Of coruse, that means that they have to still be important in mobile. They have to remain cool. They can't be seen as yesterday's news. Even if they launch social search and gifts and other e-commerce stuff, it won't mean a thing if they aren't cool anymore.
One other note. Sheryl Sandberg pushed the idea in S-1 document for Facebook that it was going to benefit from the closing of the gap between offline and online spending. She urged advertisers to make this switch happen sooner as it will benefit Facebook. She pointed out that the audience of an average day on Facebook was like triple the size of the audience for the finale of "American Idol."
That logic applied when we still lived in the desktop world of the PC where Facebook was king.
Now that the world has shifted to mobile in the last three months, Sandberg wants everyone to be patient. Social ads on mobile will take time. Brands need to lower their expectations for Facebook and just experiment.
If I was her, I'd probably say the same thing. It just speaks to how much Facebook management has been caught off guard by the sudden shift to mobile since their IPO.