What’s On

All that happens at Facebook

Facebook had its much awaited IPO at a valuation of $104 billion and lot of media attention, Mark Zuckerberg tied the knot, and now the market seems not so attentive towards the social network giant, for the shares have fallen 13.7 percent below the initial share price of $38.While shareholders may not all ‘Like’ everything about Facebook, but it doesn’t change the fact that for brands and marketers it remains the leading social network to look into when targeting the young adults and large mass of consumers.

Actually, many industry watchers and marketers say that ‘Like’ on a Facebook page has no real value. In fact a study by eMarketer shows that 47 percent of people see no value at all in a ‘like’. It does not really translate into a real purchase or transaction. So is Facebook doing anything to make itself more attractive to brands (potential advertisers) and old and new users? Yes, it has been on a quiet acquisition spree for about a month before it announced its IPO.

The biggest to make news was Instagram acquisition at one billion dollars. But Zuckerberg also bought companies like Tagtile and Glancee. The Facebook watchers in the industry felt that the acquisition has been made to beef up its talent pool as well as to strengthen its business against Google, which is a clear leader in the digital advertising space. Explaining this, Arun Kumar, president MAP G14, IPG Media Brands Worldwide says, “We see a lot of duality of play in this deal. If you look at the market split, then there is Google on one side and Microsoft, Facebook and Yahoo! on the other. The three together is trying to ward off Google from becoming this all in all in the digital space, which everyone agrees is where the money is going to come from in the future.”

Kumar further stresses that on a closer look it is Microsoft that is leading the trio to take the money away from Google. “That is one of the reasons why Microsoft has transferred some of its patents to Facebook to make it a strong contender in the digital advertising market,” he adds.

It seems possible since most brands get a faster return on their investments from Google, while investments in Facebook still works on a sort of fuzzy logic. So will this small basket of acquisitions help Facebook in anyway? Taking example of how integration of Instagram can impact Natasha Zhao, lead consultant at Blugrapes, a marketing company with special focus on Facebook marketing, mobile marketing, and media tracking, says, “With the fairly recent implementation of the Timeline layout across user and brand pages, Facebook’s look and feel has started to give more prominence to images and visuals. Although Mark Zuckerberg has said that Facebook is “committed to building and growing Instagram independently”, the acquisition of Instagram, an app heavily dependent on photo content, suggests that any further changes to Facebook’s look, feel and features would likely continue to give prominence to photos and visual content.” Giving a similar viewpoint, IPG MBWW’s Kumar explains, “While it is still unclear as to how brands can leverage upon this acquisition, but one thing we can be sure is that in future Facebook’s photo capabilities and services (heavily criticised for its lack of quality) will be better enhanced. We expect to see Facebook bringing in capabilities from Instagram that will let users to play with and share visuals in a more creative way.”

So will this impact brands and marketers in any way when they now look at Facebook as part of their social media strategy? “As long as Instagram and Facebook remain independent (as they are now), there will be no change. If Instagram is integrated into Facebook, brands and marketers may have to adjust their strategies depending on the nature and the level of the integration,” Zhao adds. According to Nick Seckold, Head of Digital, Mindshare, this will allow Facebook to play on its social image. “If integrated, it will allow the brand user base of Facebook to make most of Timeline, and visuals. The brands will be able to tell their story in a more visual way. It is obviously a great advertising opportunity for brands and Facebook,” he tells.

However Kumar feels that it will be sometime before brands can actually get any value from Facebook’s various acquisitions. “How Facebook can look at monetising Instagram? It enables brands to get more data. Campaigns can become more interesting and pictures can be used in interesting way. Now Facebook has a set of tools which make pictures more interesting,” he explains.

Once the IPO buzz quietens, can we expect Facebook to pin down the rapidly growing Pinterest? According to Kumar, it is definitely in the radar, if not Facebook directly, then Microsoft. In fact he expects both Google and Facebook to lunge for Pinterest. Giving another point of view Zhao says, “Instagram has seen significant and exponential growth especially with its recent release on the mobile Android platform that had 5 million downloads in a mere 6 days (reported in The Los Angeles Times). This acquisition can also be seen as buying immediate growth with Facebook immediately inheriting 30 million (rather active) mobile users of Instagram.  While there will be overlap of users, this is growth in active mobile users, giving Facebook entry to the mobile application market. Also from a content & intellectual property standpoint, Instagram is a cleaner acquisition as most of its content is user taken photographs, as opposed to Pinterest. While Pinterest includes user-generated content, it also contains images clipped from webpages whose origins and copyright may not be so clear.”

But then Facebook wants to own every aspect of social, we are told by Kumar. This idea is seems very likely when the other digital expert Mindshare’s Seckold, says, “Most of the acquisitions that Facebook is making is a way to ensure that it remains in the top of its game. It is a way for Facebook to watch out for the next guy. It is acquiring competition.”

 

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