2013: when all of Facebook’s dreams come true?

A story in the Wall Street Journal last week detailed the recent partnership between Facebook and Walmart. Both brands are big, formidable and have also been the victim of strong competitive pressure in recent years.

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In Facebook’s case it is Google that towers over it and limits its share price performance. In the case of Walmart it is the dreaded online rival Amazon that threatens the retailer’s dominance.

So, this past Thanksgiving the two brands joined forces for a major communications push around Black Friday - the busiest buying period in the American calendar. For 72 hours a crack team from Facebook’s strategic services group headed south to Walmart’s Bentonville headquarters to oversee a major strategic campaign. Walmart pre-purchased 50 million ads on mobile devices of Facebook members who fit the retailer’s target profile for toys, televisions and other discounted products.

The Facebook team were there to monitor the performance of Walmart’s ads and suggest improvements in real time to ensure maximum impact. Never the easiest people to impress, Walmart’s senior team were apparently won over by the service they received and the results.

There were obvious wins for both brands from the Black Friday campaign. Walmart has struggled in the past to drive consideration, especially for electrical items, despite a very large proportion of store space being assigned to these goods. The Facebook campaign provided access to millions of targeted consumers who would usually be more likely to head to Amazon rather than Walmart for their purchases on the busiest day of the year. Sales were apparently up this year on 2011 levels for the Thanksgiving weekend and the retailer added an additional 164,000 Facebook fans in the 72-hour period too.

For Facebook the partnership has even more important implications for 2013 and beyond. After numerous efforts to pitch its new and improved services and underpin its place as a key advertising medium, the company has potentially uncovered a way to attract big advertiser investment - behave like a B2B consulting firm rather than a one-stop media channel.

“Don’t walk in with a PowerPoint presentation talking about Facebook products,” was the advice Carolyn Everson, Facebook’s vice-president of global marketing, gave her troops, “go in and ask questions”. It’s a strategy that seems to be working. Everson’s group now counts more than 1,500 brands as clients and notable successes with big spenders like Samsung, which has pledged to spend 30 per cent of its 2013 budget on Facebook as a result.

Facebook has uncovered a way to attract big advertiser investment - behave like a B2B consulting firm rather than a one-stop media channel

But this doesn’t come without some tensions. Firstly, if Facebook continues to offer upfront pre-purchasing deals to big brands like Walmart the reaction from competing clients could hurt the social media brand as much as help it.

For digital agencies there is also the notable lack of role for them to play as Facebook removes the need for anyone else in the client/medium relationship. Where was the social media agency in all this? It seems Facebook is intent on going direct and clients appear to prefer the directness.

And finally, we should not forget the golden goose, or rather the 900 million golden geese, who give Facebook its clout - the members. Facebook apparently received plenty of complaints from irate users who were bombarded with ads for Walmart despite never liking the massive retailer directly. But balance that with the “incredible levels” of engagement that the campaign created and it’s clear that the membership can take a fair dose of good old fashioned targeted advertising like the rest of us.

The idea that Facebook would eventually, very logically, work its way out of the strategic hole of 2012 makes sense if you listen to Mark Zuckerberg. That’s what a class of Stanford University students were able to do last week when the founder made a surprise guest lecture to a class on campus. Tellingly, it was a programming and not a business class that Zuckerberg dropped into and his message was as logical as it was determined.

Zuckerberg emphasized that engineering thinking isn’t just about how to develop code in the first place but is also relevant to the broader issue of how to “program an organisation”.

“The lesson is not, ‘Don’t make mistakes’, but simply focus on building something awesome,” added Zuckerberg. “It might be expensive and painful to fix the mistakes but if you’re building something that people inherently want and that you think is awesome and have a passion for, then just power through it.”

So perhaps there is marketing hope for Facebook after all. Not just in its successful recent partnerships with Walmart and Samsung but in the more fundamental observation that this company is not afraid to fail and to learn from its mistakes in order to eventually succeed.

In the spirit of the season let us wish Facebook, and one and all engaged in the business of marketing a very merry Christmas and a joyous (and strategically sound) New Year.

Readers' comments (4)

  • Hear, hear!

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  • I can't help but feel that facebook may have jumped the shark.

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  • What a great way to pull forces to try and make some for on in roads against some of these monster businesses. It also shows that such giants are not infalable and also points to a great new potential revenue stream for facebook which is something they have been struggling to find. I hope that they progress this strategy, the only issue I see would be what if Amazon did the same then you are back to status quo - but then let the best campaign win I suppose, however great outside of the box thinking.

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  • I spent the last day of 2012 in a Walmart about 2 hours north of New York City - looking for chains for our family vehicle.

    I went into the store with a fellow post-MBA type (who doesn't actually have an MBA but does work on Wall Street, important to the story). Suffice it to say that we noted the significant difference between the typical Walmart shopper and the typical Manhattanite.

    And this is a theme about Facebook and an important point to make about advertising on Facebook. The alpha consumers (Manhattanites and similar) simply don't go into Walmart. And years ago the typical Walmart shopper WASN'T on Facebook. But that's changing and it says something about the relative value of Facebook advertising.

    As Facebook matures you can advertise for Sears or Walmart on Facebook. And surely there's a great business case for doing so. But it marks the End of Facebook as a cutting edge technolgy company. (if it ever was one)

    Perhaps the cutting edge tech cos will figure out a way to monetize Facebook's 500 million individual users or so, but it isn't likely to be Facebook who does it.

    I've implied it in my comment but best to state it here - I don't think that alpha consumers are clicking ads on Facebook, if they are even spending any time there at all.

    But maybe I've taken more paragraphs than Bertie did to say the same thing above!?

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