Tag Archives: landlord

Facebook is Your Volatile Nightmare Landlord

14 Oct

For a while now you’ll have seen TV commercials, magazine or online ads sign off with a Facebook link. If your business is using Facebook as its website you may already have invested a lot of time nurturing people one by one through the stages of engagement; interest, trial, customer and then friend. They may visit your Facebook page regularly and get your business notifications via their Liking you. All is wonderful in the land of Zuckerberg.

This is all fine as long as it’s understood that your business status on Facebook is that of a tenant. You have few rights, do not own your content and your landlord can change the rules whenever they like; even if that means torpedoing your business. Fantasy surely, but you only have to look to the moves Zynga announced last week.

Zynga is the social gaming giant of Facebook and its biggest app-maker. They provide free-to-play games, enhanced with micro-payments and with titles you may have heard of – Farmville, Cityville, Mafia Wars – they have been very successful. Their revenue in 2010 was $597 million of which $58 million was profit. In July of this year their profits plummeted. The main reason? Facebook.

Facebook Credits take a cut from your e-commerceIn July 2011 Facebook introduced Facebook credits and dictated that all transactions had to be conducted with their credits. Their cut is 30% and this slashed Zynga’s profits by 90% for the quarter.

I don’t see a 30% cut as particularly onerous by the way, it’s a lot better than Groupon’s 50% – 100%, but if your business’ online presence relies on Facebook, then I’d suggest you consider what you might do if they change the rules overnight. At  the very least check if your current page flouts any of the existing rules. This is especially important if you’re using Facebook’s native functionality to promote your business. For example, running a competition on your wall isn’t permitted by Facebook. Contravene it and they can just shut you down without warning. No more business page. And yes, they do check and they do enforce it.

Returning to Zynga. In their case they announced the launch of Zynga Direct. An effort to break their reliance on Facebook and get customers onto their platform without going through Facebook. Not an easy undertaking considering their business was built from the ground up on Facebook.

It’s vital to consider Facebook as one engagement channel and not your only channel. You need to spread your message across different channels, each tailored to the users and expectations of those channels. It’s harder to do and you may need an agency to strategise, co-ordinate, or set this up for you, but it allows you to be flexible and mitigates platform fatigue or failure.

You should also determine where your hub is; The place that your online visitors will end up at. Perhaps it starts with Facebook, ending at your own website where you control your content.

Let’s go a step further. What if your Facebook landlord decides to sell up and disappear? If there’s a constant in the digital world it’s that everything changes.

The biggest search engine in the world in 2000? Yahoo; the crumbling father of the internet, leaking CEO’s and market share like a North Korean submarine, exited search entirely in 2009, replaced by a company no-one had heard of 11 years ago… Google

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