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Guest Post: Christian Finn: Is Facebook About to Become a Victim of its Own Success?

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He gave an intro to himself in an earlier post this morning but his post below is a great example of how customer engagement takes on a life of its own in our global online connected and social digital ecosystem. Is Facebook About to Become a Victim of its Own Success? What if I told you that your brand could advertise so successfully, you wouldn’t have to pay for the ads? A recent campaign by Ford Motor Company for the Ford Focus featuring Doug the spokespuppet (I am not making this up) did just that—and it raises some interesting issues for marketers and social media alike in the brave new world of customer engagement that is the Social Web. Allow me to elaborate. An article in the Wall Street Journal last week—“Big Brands Like Facebook, But They Don’t Like to Pay” tells the story of Ford’s recently concluded online campaign for the 2012 Ford Focus. (Ford, by the way, under the leadership of people such as Scott Monty, has been a pioneer of effective social campaigns.) The centerpiece of the campaign was the aforementioned Doug, who appeared as a character on Facebook in videos and via chat. (If you are not familiar with Doug, you can see him in action here, and read the WSJ story here.) You may be thinking puppet ads are a sign of Internet Bubble 2.0 and want to stop now, but bear with me. The Journal reported that Ford spent about $95M on its overall Ford Focus campaign, with TV accounting for over $60M of that spend. The Internet buy for the campaign was just over $10M, which included ad buys to drive traffic to Facebook for people to meet and ‘Like’ Doug and some amount on Facebook ads, too, to promote Doug and by extension, the Ford Focus. So far, a fairly straightforward consumer marketing story in the Internet Era. Yet here’s the curious thing: once Doug reached 10,000 fans on Facebook, Ford stopped paying for Facebook ads. Doug had gone viral with people sharing his videos with one another; once critical mass was reached there was no need to buy more ads on Facebook. Doug went on to be Liked by over 43,000 people, and 61% of his fans said they would be more likely to consider buying a Focus. According to the article, Ford says Focus sales are up this year—and increasing sales is every marketer’s goal. And so in effect, Ford found its Facebook campaign so successful that it could stop paying for it, instead letting its target consumers communicate its messages for fun—and for free. Not only did they get a 3X increase in fans beyond their paid campaign, they had thousands of customers sharing their messages in video form for months. Since free advertising is the Holy Grail of marketing both old and new-- and it appears social networks have an advantage in generating that buzz—it seems reasonable to ask: what would happen to brands’ advertising strategies—and the media they use to engage customers, if this success were repeated at scale? It seems logical to conclude that, at least initially, more ad dollars would be spent with social networks like Facebook as brands attempt to replicate Ford’s success. Certainly Facebook ad revenues are on the rise—eMarketer expects Facebook’s ad revenues to quintuple by 2012 compared with 2009 levels, to nearly 2.9B. That’s bad news for TV and the already battered print media and good news for Facebook. But perhaps not so over the longer run. With TV buys, you have to keep paying to generate impressions. If Doug the spokespuppet is any guide, however, that may not be true for social media campaigns. After an initial outlay, if a social campaign takes off, the audience will generate more impressions on its own. Thus a social medium like Facebook could be the victim of its own success when it comes to ad revenue. It may be there is an inherent limiting factor in the ad spend they can capture, as exemplified by Ford’s experience with Dough and the Focus. And brands may spend much less overall on advertising, with as good or better results, than they ever have in the past. How will these trends evolve? Can brands create social campaigns that repeat Ford’s formula for the Focus with effective results? Can social networks find ways to capture more spend and overcome their potential tendency to make further spend unnecessary? And will consumers become tired and insulated from social campaigns, much as they have to traditional advertising channels? These are the questions CMOs and Facebook execs alike will be asking themselves in the brave new world of customer engagement. As always, your thoughts and comments are most welcome.

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