Forrester un-friends Facebook but faces backlash

Some take issue with research firm’s evidence, call report a “hatchet job” It’s a Facebook status update nobody saw coming. In a damning report entitled “Why Facebook is Failing Marketers,” research firm Forrester says that the social media giant has degenerated into a “Web 1.0-style ad seller,” focused almost entirely on advertising models marketers hoped […]

Some take issue with research firm’s evidence, call report a “hatchet job”

It’s a Facebook status update nobody saw coming. In a damning report entitled “Why Facebook is Failing Marketers,” research firm Forrester says that the social media giant has degenerated into a “Web 1.0-style ad seller,” focused almost entirely on advertising models marketers hoped it would replace.

Nate Elliott

With more than 1.1 billion users worldwide, all of them providing valuable insights into their preferences and affinities through their “likes” and status updates, Facebook offers the potential for genuine two-way communication between brands and their customers, writes report author Nate Elliott.

But he writes that Facebook has abandoned its early promise, leading marketers to increasingly treat it as “just another ad buy.” Evoking a name sure to cause gasps at Facebook headquarters in Menlo Park, CA, Elliott predicts that more and more big brands will walk away, making Facebook feel more like MySpace in the late 2000s: “A home for poorly targeted, low-CPM direct marketing.”

That advertiser defection might still be some ways off, however. A survey of 395 marketers in Canada, the United States and the United Kingdom found that nearly three quarters of polled companies use Facebook, with the most common use being posting updates to their branded page, followed by responding to customer comments and questions and promoting

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Facebook founder Mark Zuckerberg promoted his company as a way to better connect marketers with their customers; instead, says the report, “it rarely creates such connections.”

In an open letter to Zuckerberg on the Forrester blog, Elliott bluntly stated that Facebook is failing marketers by focusing too little on the thing they promise most: driving genuine engagement between companies and their customers.

Some, such as Optimal CEO Rob Leathern, have dismissed the report as a “hatchet job” using supporting evidence that is “bullshit.” DevBeat’s Jon Koetsier was similarly critical, saying the report, which dropped a day before Facebook’s earnings reports, erroneously arrives at its conclusions via anecdotal rather than data-driven evidence.

The report goes on to say that Facebook has become what Zuckerberg pledged it would not: a traditional ad seller delivering tens of billions of display ad impressions each day – up to one-third of all online display impressions. “It has quietly become almost entirely reliant upon the traditional advertising models it once lampooned,” writes Elliott.

Fewer than 15% of its ads leverage social data in order to reach relevant audiences, says Elliott, while its static-image ad units offer less impact per impression than marketers could achieve with other sites’ ad units.

Elliott writes that on average, Facebook shows each brand’s posts to only 16% of its fans, and has done little in the past 18 months to improve its branded page format or the tools marketers use to manage and measure those pages.

In fact, the report notes that Facebook ranks below other online marketing tactics such as search, branded blogs and even e-mail marketing in terms of overall marketer satisfaction with the business value they derive from the site.

The report predicted that Facebook would abandon its marketplace ads entirely, focusing instead on the ads its delivers into its news feed and building a network or exchange where marketers can run a higher volume of low-budget ads without degrading its own user experience.

Forrester said that by adding social tools such as branded communities, blogs and customer ratings and reviews, marketers will be able to use their own websites to create genuine social interaction with their customers.

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