Facebook's 7 Biggest Advertising Problems ... - Business Insider

Gokul Rajaram

Facebook's Gokul Rajaram

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Gokul Rajaram is Facebook's director of product management for ads. He recently did a detailed, free-wheeling interview with AdExchanger, in which he described seven priorities for the advertising side of?Facebook's business (which is to say, virtually all of its $1 billion-per quarter business).

In doing so, however, he also hinted at Facebook's seven biggest problems. Here are Rajaram's priorities and the problems that come with them:

1. Data. Facebook has one of the biggest hoards of marketing data on the planet, and its members are targetable based on their demographics and interests. It's a potential marketing goldmine.

Problem: Facebook isn't doing anything with it. When asked if Facebook ever planned to switch on its data for ad targeting, Rajaram said only: "Not at this time."

2. Facebook Pages.? "Facebook Pages work really well to reach people at all parts of the funnel. The Page should be the hub of all your marketing, we believe, because Pages allow you to reach people in the news feed. Pages allow you to publish content. That initially starts out as organic content, and then you can sponsor or boost the content."

Problem: Pages are free, but Facebook needs to see sales dollars growth. But there's no such thing as a "free" page at Facebook. As Rajaram admits, most posts made by marketers are only seen by a small proportion of followers because users' news feeds are so crowded. So marketers are forced to pay to get the reach they need: "Organically, you get anywhere from 15 percent to 20 percent of your fans, that you reach organically. In order to reach the remaining 80 to 85 percent, sponsoring posts is important."

3. Mobile. "Our advertising strategy on mobile is all about making sure we are part of the organic content that people consume. It?s primarily News Feed. On mobile, it?s actually fairly easy for us."

Problem: Everyone knows Facebook's mobile app leaves a lot to be desired. Also, Rajaram says Facebook will NOT introduce banner ads, leaving it dependent on Sponsored Stories?which aren't as obvious or intrusive as display advertising. He says, "we don?t introduce content which would not be there otherwise?like a banner ad or something like that?in mobile, it?s a much easier transition for us from a pure product development point of view." That's fine ... except that advertisers LIKE obvious and intrusive media. The mobile screen is comparatively tiny and Facebook has turned its back on a major part of the real estate it offers.

4. Offers. "We intrinsically believe that advertising and marketing should enhance native?user behaviors. Things like Offers originated from this belief. When we survey users asking, 'What are the reasons you Like a page on Facebook?' one of the primary reasons was people want discounts, coupons, and deals. To build a compelling product it takes a coupon, which is an age-old thing."

Problem: When was the last time you redeemed a Facebook Offer?

5. Speed. "Our focus is to move fast ? have all teams that work together not encumbered by any constraints. They execute and launch something fast and learn something and move on."

Problem: Facebook is rolling out new products so fast it's confusing for clients. Here's? how Rajaram says Facebook communicates with its main ad partners, the so-called preferred marketing developers (PMD): "We have a number of communication channels with PMDs. All PMDs have access to a PMD-only community forum. We have several forums, groups on Facebook that they have access to. Then we have product and program update forums. Then we have PMD email support. We also have regular newsletters that we send out, and we have limited opportunities for select PMDs to test products in pre?launch status so they can test it and give us feedback." Phew!

6. Facebook Exchange: "There are obviously some differences in Facebook creative being different from [standardized display] and so on. We want to make sure the partners understand that just because they are integrated, it doesn?t mean the responsibility ends there. Their responsibility is to work with us to make sure the advertisers who are our common client have a great experience on Facebook Exchange."

Problem: Rajaram seems to be implying that Facebook's ad formats are a creative hurdle for some buyers. Facebook's ads come in different shapes and sizes than standard web format banner ads?which means that clients have to create separate campaigns just for Facebook, before they buy on Facebook.

7. Video. Facebook is one of the largest servers of video in the world, and video advertising is a lot more lucrative than display advertising. So it's a huge opportunity for video ads.

Problem: Facebook isn't doing anything about it. "Unlike everybody else It?s something we haven?t talked too much about. We probably need to focus and build a lot of stuff on the consumer side, if we want to do something. I think, so far, we haven?t talked much about the advertising side of video, at this point."

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Source: http://www.businessinsider.com/facebooks-7-biggest-advertising-problems-according-gokul-rajaram-2012-9

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