Ed Cotton: Facebook’s Dangerous Game
What are the implications for advertising on the world's largest social network now that it has IPO status?
When Facebook becomes a public company-it’s obvious that it will be forced to generate ever increasing revenues from its user base. The only way the company can deliver these revenues is by selling more advertising and making more money through user transactions.
The advertising issue is key – currently Facebook is being use by brands to finely target messages to discrete audiences and with below average CTRs, it’s really all about branding. For most brands, it’s all about going where the eyeballs are, so it’s an imperative to be on Facebook, but questions remain around effectiveness and the real ROI on these efforts.