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| A Bronx cheer from the New York press |
If you bought Facebook at $38 a share, I’ll offer you some hope for the future.
But if your eyes glaze over when hearing about audience measurement, then skip today’s post.
Facebook went public, then publicly flopped
The two topics are linked. This past week Facebook went public and then publicly flopped. You may have gathered from news reports the following causes:
(a) CEO Mark Zuckerberg pushed up the price too high
(b) Morgan Stanley mishandled the transaction
(c) Nasdaq’s technology failed
All three to some extent are true.
What really started the entire affair was audience measurement.
Audience Measurement flummoxed Facebook
Facebook dominates the online advertising marketplace. Over the past few years it’s grown to be about 60% of the market. For the most part this advertising is measureable because Facebook controls the inventory, distribution and analytics. If you spend money to advertise on Facebook, you generally know who you’re reaching and how they’re responding.
The audience data for mobile usage, however, isn’t so certain. The technology just hasn’t developed yet. Reuters noticed this fact and wrote about it, calling into question the projections of Facebook’s future advertising revenue. Since their source was Facebook’s own SEC filing, this wasn’t exactly an exposé but it was a total buzz kill.
This week’s events don’t necessarily put Facebook on the same path as MySpace and Friendster. It still makes billions on the ads it sells.
Facebook and the Conundrum of Mobile
Still, Facebook symbolizes the Conundrum of Mobile: Consumers have adopted, embraced and depended on it, but advertisers haven’t yet found their role.
The answer to the conundrum is: Advertisers’ role will increase as measurement becomes more certain. And it will.
So, hang on to your Facebook stock. When they figure out mobile, the share price will go back up.*
* Obviously, I'm not an investment advisor, and this post isn't investment advice. I didn't buy any Facebook stock, so it's easy for me to opine. That said, my opinion is less about Facebook's future than the future of mobile audience measurement, which can only get better.