GM’s facebook ad brawl – sociability vs. visibility

So, after a couple of weeks, the truth has come out about GM’s sudden Facebook ad maneuver. Or at least some of the story. It appears that there was something of a power struggle between Mark Zuckerberg and GM. And for once, kudos to Mr. Zuckerberg for standing his ground. He seems to remember what his social media baby is all about. And it’s not necessarily just about social media marketing.

It seems that GM wanted to place full page ads on Facebook, an idea which was rejected. So like a spoiled child, GM took their ball and went home. GM’s maneuver forces a number of issues into the limelight regarding the future of Facebook, not just their advertising strategy but the actual future of Facebook itself. GM’s tactics were being at least partially blamed for the relative failure of the vaunted Facebook IPO.

Give credit to Facebook for not knuckling under to GM’s demands. Zuckerberg probably realized what many have already realized: if you give in to one person on this, you’ll have to give in to everyone and suddenly Facebook becomes Adbook. The user’s experience would likely significantly decline and the users would disappear from Facebook like rats deserting a sinking ship. Experience is everything, whether it ranges from Facebook site to a company’s Facebook page.

Facebook’s revenue is ad driven. Everyone knows and accepts this. It’s part of the reason why they launched a multi-billion dollar IPO less than two weeks ago. They made over $3 billion in ads alone last year. There are ads all over the site, and some follow the user around. They are well targeted and placed as deftly as chess pieces. Now that Facebook is a public company, it’s going to be undergoing a huge identity crisis with a very careful balance needing to be achieved very quickly.

How does Mark Zuckerberg balance his new investors’ needs versus the Facebook users’ experience? Advertising is a fact of life. There are times when CNN’s homepage looks like a gigantic Capital One advertisement and the login for Yahoo! E-mail is brought to you by a major corporate sponsor. Facebook needs to keep their investors happy, but those investors are now both shareholders and those who invest in Facebook ads. Facebook also needs to keep the users happy, and full page ads aren’t the way to accomplish that.

This is a massively complicated and delicate situation. If the companies that are investing with Facebook don’t see a return, there is a chance that they too could leave Facebook behind. If Mr. Zuckerberg gives in to the corporate side, he is taking a huge risk that his users will abandon Facebook entirely. One of the proposed solutions, large ads on the log out page, may only be a stop gap maneuver for right now. It’s highly doubtful that advertisers will continue to be happy about this option, particularly those who pay money to advertise on the mobile site.  Between the Facebook ad issues and the rapidly accumulating lawsuits, it’s easy to see that the honeymoon for Mark Zuckerberg is over.