NEW YORK, NY -- (Marketwire) -- 01/10/13 -- Advertising is something that everyone is familiar with, according to Richard Gorman; whether an individual works in marketing or is simply a consumer, ads are everywhere, and they are critically important to the way business works. Ads are especially important for businesses that make their products and services free; without ad revenues, there is simply no way for these businesses to stay afloat. Facebook is a company that falls into this category. Signing up for a Facebook account has always been free, but, according to a recent article from Tech Crunch, the social networking giant is facing an uncertain future, as it considers ways in which it might better integrate ads into its service. The article has won the attention of online marketing pioneer Gorman, who has weighed in on the issue of Facebook ads with a new statement to the press.
"The Facebook business model puts the company in a difficult place," opines Gorman, in his new press statement. "The reality is that Facebook has existed for so long as a free service that the company now faces difficulties in figuring out how to monetize its services, and keep shareholders happy. Advertising revenue is the answer, but for a service that thrives on a seamless user experience, effectively integrating ads is tough."
As Tech Crunch notes, Facebook has found itself caught between a rock and a hard place. The social network thrives on people, who contribute content that is, in turn, public, private, or personal. Facebook can seek to monetize some of this content, but not necessarily all of it. At the same time, the company has shareholders to think about, and its services remain free, even as other, alternatives to Facebook grow increasingly common. "Facebook does not necessarily need to worry about users jumping ship for other social networks, because there is nothing truly comparable with Facebook at this point in time," offers Gorman. "With that said, they do need to ensure that their service loses none of its luster or its attractiveness to users, or else Facebook really could see its daily active user statistics begin to slip."
The Tech Crunch article says that Facebook's efforts to introduce ads are practically destined for failure, because they will almost certainly fall into one of two categories -- either these ads will rub users the wrong way, or they will be so unobtrusive as to be altogether ignored. "This is the conundrum that Facebook must deal with if it wishes to really get serious about ads," says Gorman. "Introducing ads may prove necessary to keep the shareholders happy, but it is equally necessary to keep the Facebook service appealing to users -- something that the introduction of ads could ultimately ruin."
Current models of Facebook advertising, Gorman says, leave something to be desired. "What many of us are seeing is the incorporation of 'sponsored' or 'suggested' posts into our Facebook news feeds," Gorman says. "The problem is that these ads are not necessarily related to our interests or our industries, and because Facebook is a place where we go to get content that is customized to our personalities and our desires, these irrelevant ads, embedded between posts from friends and family members, only serve to disrupt and distract."
The direct response marketing pioneer says that the answer may lie in Facebook taking a few pages out of the content marketing playbook. "For Facebook ads to be both effective for the advertisers and non-irritating to users, they are going to have to be more carefully targeted to the interests of users," he explains. "Additionally, they are going to need to take the form of enriching, engaging content -- as in, compelling articles, how-tos, or entertaining videos. Straightforward product promos are going to have a very limited effect in a Facebook newsfeed."
The only alternative to content marketing, Gorman concludes, is the introduction of a "premium" Facebook membership, wherein users can pay to have ads removed. "This model works alright for service like Spotify, but it is doubtful that it would work for Facebook," Gorman says. "It is the kind of move that could damage Facebook's brand, which has for so long been built on the notion that the service is totally free for everyone."
Richard Gorman tweets regularly about topics related to online marketing, @RichGorman101.
Richard Gorman is a marketing innovator, a serial entrepreneur, and a major name in the direct response marketing field. His brand, Direct Response, is one of the leading named in affiliate marketing; through Direct Response, Gorman gives away millions of dollars in trade secrets and insider expertise, all as a part of his passion for delivering value to other companies and industry professionals.
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