Yesterday afternoon, developers all over began complaining that they couldn’t create FBML pages, the necessary elements of custom landing pages.  The new rule was that you had to either have 10,000 fans or have an account rep, which means that you’re spending money on advertising.  We have some clients that spend $200k on Facebook ads, so it’s not clear what the threshold is to qualify to have a rep– I believe it’s around $5k a day, but that changes and Facebook will not comment on the issue.

In short, you are either a major brand or you are willing to pony up money like a major brand.  If you’re not, then tough.  The catch-22 is that to have a fighting chance to grow to 10,000 fans, you need a custom landing page tab to allow you to ask users to fan you, insert videos, and perform e-commerce.  Overnight, Facebook has instantly zapped a number of businesses that were reliant upon their Facebook presence to promote themselves.  

At the same time, a number of agencies and software shops such as BlitzLocal that specialized in Facebook pages are also in trouble. Even those firms that specialize in Facebook ads will be massively hurt, since without custom landing pages, their conversion rates will suffer.  Those pages that were fortunate enough to have already made custom tabs– their default setting reverts back to the wall.

WHAT THIS MEANS

If you want to play, you have to pay.  That’s pretty clear— unless you’re spending money, and a LOT of money, you’re not important. For our big brand clients, not that big a deal. For local businesses, this just underscores the risk of building your business on someone else’s website. You’re at the whim of their policy changes.  Keep your regular website by all means as an insurance policy.

If you’re a household name, you have far less competition for traffic now– consider yourself lucky, but also know that privacy is a major hurdle that Facebook is struggling with– and the timing of this decision is quite poor.

Advertising can still save the day.  When Allah giveth, Allah also taketh away. Sure, we lost the best part of Facebook pages, but we do still have some insanely good targeting on Facebook ads, where you can target down to the individual person.  As a test, I ran an ad targeting folks who live in Alabama, work at BlitzLocal, and are of an certain age.  Only one person in the world meets that criteria– and I bombarded him with ads that have his name in all caps.  You can still run your ads to your regular website and get fans using global like.

WHAT YOU SHOULD DO

Make sure you are running multiple sources of traffic and maintaining at least your Facebook page and regular (WordPress) site.  You never know when one company stumbles and another arises. Don’t put all your eggs in one basket.  Facebook may reduce their 10,000 fan requirement– in the past, they had high minimums to choose a vanity url.  Who’s to say that they may change this rule once they realize how badly it hurts the local businesses who just can’t get to 10,000 fans.

Try out MySpace and Google Content to hedge your bets on Facebook.  The traffic is not as cheap, but these folks have been pouncing at Facebook’s missteps.  I’d say that this recent change is the most FRUSTRATING thing that I’ve seen from Facebook so far– far more than Beacon or even the recent privacy issues.  Facebook is a young company– some of the brighter folks there are probably lobbying to get this changed– and youngsters when they fall down, can often get right back up and learn from their mistakes.

Meanwhile, BlitzLocal is halting the small business page development efforts on Facebook and moving to other platforms such as WordPress.  Jason Calcanis and others are making a stink about Facebook’s recent moves and now deleting their profiles, gathering the masses to leave.  While normal for Jason to gather attention as such, he does have a valid point that when Facebook shifts their policies on pages and apps, as we have witnessed in the last 3 years, then your investment in Facebook is unstable.

How has this change affected you?

UPDATED NEWS:

Facebook has reversed their policy here, as we predicted.  The outcry was enormous.  One source told us that the move was to shut down spammers who were using landing pages to do malicious things. Thus, Facebook hadn’t considered who else would be impacted by that action.

Had Facebook not woken up, our plan of action would have been to continue making automated pages, just focusing on the profile pic for customization. As for advertising, this would have hurt us a bit, since sending users to just the wall versus the landing page tab would have decreased conversion rates. This disaster narrowly avoided points to the risk to sitting on only one platform. In our role as an agency, we have to be wherever the traffic is, so we have to consider organic search, maps, and other ways to get traffic for our clients. Some folks in the Facebook forum have called me ignorant and incorrect in what I’m saying.

If they read the notes carefully and understand the impact, even if we are allowed to still create a landing page tab but NOT specify the default tab, the effect is almost the same. Specifying your homepage tab is just like specifying what is the homepage of your regular site. You know how you can have many tabs on your page, including ones not in the first six that are in the >> on the right? Those are effectively invisible– and that’s the point here. Your default tab setting is critical, as your homepage get most of your traffic.

Facebook’s ad tool gives you demographic counts.  Here are the number of people 18+ in Singapore– 1.8 million:

We’ve left the setting on both genders and all relationship statuses.

Now we look at just the females.  There are 903,840 of them, which is about half the population.

Now let’s look at females who are seeking males– there are only 53,300 of them.

Now what one might erroneously conclude is that the difference (903,840 minus 53,300) are women seeking women.  Thus, 850,540 of these 903,840 are lesbians.

However, not everyone states their sexual preference.  So here are the females seeking females.  There are 102,980 of them, which is nearly double the number of females seeking males!

I ran the stats twice to make sure– and sure enough, these numbers check out.  By the way, if you add up the number of women who prefer either males or females, then you have a total of 156,280, which is only a sixth of the female population of about 900,000.  Thus, 5/6ths of people aren’t declaring their sexual preference. 

Why?  I believe that the gay people don’t want to be obstracized in certain countries, while the heterosexual folks are perhaps tired of being bombarded by dating ads. But there could be also a fraction of people who are bisexual, asexual or have other preferences.

Reminds of a friend who was filling out a form– and in the section marked sex, he said, “Yes, please!”

I set up Google Alerts to monitor a number of keywords– and increasingly I’ve noticed how updates to Facebook pages are now showing up.  Part of this is the fact that Google is increasingly using social signals to determine rankings, since what might have gotten hundreds of links a few years ago will today get a ton of “likes”.  And the concept of links between pages is now morphing into connections between people.  It’s not just PageRank, but FriendRank– or whatever term you prefer to measure influence.

A Facebook executive recently shared with me how getting more fans to your page was actually a great SEO strategy.  Think about that.  You’re generating more inbound links to your page (and yes, it’s accumulating juice) and with frequent/relevant postings, you’re generating more EdgeRank, too. Sometimes that’s enough juice to outrank your regular website, if it’s weak enough. They are probably top 3 for your name, if not already #1.  Here’s mine.

So I predict Facebook showing up in SERPS not just for people’s names, but increasingly for any type of entity.  Have you seen yourself show up more in Google News, Facebook’s own search, and just in general?  BlitzLocal believes that Facebook ads actually help your organic rankings, as you can drive more fans to your pages.

Is this just me or are you also seeing 3 ads on the Facebook homepage? This reminds me of the days when Yahoo! and Google would insert more ads on pages to increase revenue.  Could imagine what Facebook would look like if they inserted ads all over– leaderboards on the top and bottom, and regular ads on the side?  Then they’d collect a 30% fee on payments, plus sell you virtual gifts. Could be a money-making machine, especially if they help advertisers properly capitalize on social targeting options, enhanced by all the new data being made available via the Open Graph and the global like.

Are you scared, excited, disgusted, or indifferent? Seems silly to be spending so many dollars sending traffic to Facebook’s own page– yet there’s no denying the traffic and ROI that stems from doing that, versus sending to your own page.  But if someday your Facebook business page or applications are taken over with ads, then your investment may be less attractive– whether you’re Zynga or not.

A couple weeks ago, Facebook released community pages– an attempt to auto-tag the web and build a rival to Wikipedia.  Great SEO strategy, as these are in-text links coming from people’s profiles, allowing Facebook to extend their rankings from not just people’s names to businesses, but now to organizations, concepts, favorite foods, common complaints, or nearly entity on the web.  Executed right, it’s the most powerful SEO strategy the world has seen– to leverage links, trust, and real content– superior to the Demand Media strategy of farmed content placed under high PR sites.  This is real content by real users on existing powerful pages all at zero cost to Facebook.

But the downside is that some users might not like the content on their profile pages getting hijacked, parsed into chunks and linked to other pages without their permission.  Users complain that they are linked to schools they didn’t attend, products they don’t endorse, or concepts that they are not interested in, since the bot that is auto-generating these tags isn’t well refined yet.

Case in point– do a search on “blitzlocal” and you’ll see that instead of 2 pages, you’ll now find 24 pages– nearly all of them auto-generated Facebook Community Pages taken from profile tags.  Do the same on SEOmoz and you’ll see 21 pages, also with the same types of tags.  SEOmoz is treated separately from SeoMoz or seomoz– hence the confusion. Do a search on your company name and let us know how many copies you find, especially if the name is hard to spell.

We made a demo page for ClickEquations, one of the top PPC management software firms out there– and the algorithm re-categorized it from being a business to being a community page.  I filed a complaint and the Facebook rep said that after careful review, they’ve decided that Craig’s entity is not a business, but should be a community page– in the same vein as community pages such as “I hate people who talk on their cell phones while driving” or other such non-branded items.

Overall, I think Facebook Community Pages are a great concept– but as with any company that is a fierce innovator, they have to balance speed versus accuracy.

A Rice University study last week claims that Facebook is an effective marketing tool because of these stats, comparing the Facebook fans versus their general customer base:

• Made 36 percent more visits to DG’s stores each month.
• Spent 45 percent more of their eating-out dollars at DG.
• Spent 33 percent more at DG’s stores.
• Had 14 percent higher emotional attachment to the DG brand.
• Had 41 percent greater psychological loyalty toward DG.

At first, this sounds great– these Facebook users are more loyal and spend more money with this restaurant chain.  But as you learn in first semester college statistics– correlation is not causation.  The folks who fanned your page are likely already your strongest supporters– it wasn’t because they fanned your page that they all of a sudden started spending more money at your restaurants.  

Consider the fact that the percentage of people who visit the emergency room and die is higher than the percentage of random people who don’t go to hospitals, yet still die.  Clearly, there is a correlation between going to the hospital and dying, but that doesn’t mean if you’re sick or injured that you should avoid the hospital.   People who go to the hospital are already sick, so it’s not fair to compare them against the normal healthy population.

In the same way, of course the first fans to your Facebook page are not representative of your general customer base.  It’s your friends, coworkers, and folks closer to you.  OF COURSE these fans are strong supporters, especially since this particular study had a tiny sample size.

Does that mean you shouldn’t do Facebook or that fans are of low value?  Quite the opposite.  It means that after your initial wave of fans (which are your most loyal supporters), then you begin to attract the mainstream fans of your product or service.  These are the people who may have heard of you, but aren’t raving fans yet.  And it’s the viral loop of friends telling friends who then tell other friends– all the while spreading via the wall and word of mouth– that you get MASSIVE ROI.

Facebook is great for demand creation– to help spread word about your brand through folks who already love you.  Demand collection is showing ads to people who are about to buy.  That’s where social media and search work well together.  The AIDA funnel (Awareness, Interest, Desire, Action) shows that social media owns the first 3 phases and that search owns the last.  You have to generate awareness of your brand and also be there when they are ready to finally buy via Google.  

Thus, your Facebook ads are not “better” than paid search, nor is your Facebook Fan Page a better opportunity than your regular website.  You might as well argue that the steering wheel in a car is more important than the gas pedal.  You need both– it’s not an either or situation where they work together.

Stay tuned tomorrow for when we quantify the value of  your Facebook presence, starting first with determining “The Gap”– the difference between your offline brand strength and your online presence.

Internal documents propose that users can become a fan by just clicking “like”, as opposed to “become a fan”.  Their documents, read them here, note that saying “like” is a light-weight method of expressing interest.  BlitzLocal’s take is that this will cause several things to happen:

• Users (I was about to call them “fans”) will be confused as to whether they are liking something or actually joining a Fan page.  If  Facebook is going to change the language to like, then they should also call a Fan Page a “Like” Page, which would devolve Fan pages into the old Facebook Groups– for when people want to hit thumbs up on a clever slogan.  In effect, a fan page becomes more like a bumper sticker popularity contest than a real business presence or one of deeper engagement.
• In a “twitter-esque” move, Facebook is trading volume of interaction with depth of interaction.  This is the “light-weight” engagement they mention. We believe that this will increase traffic over the long run and reflect the aim of a social network to be casual conversation.  Increased interaction is great from a search engine and investor valuation standpoint– it allows Facebook to show greater numbers, since the bar is lower to become a fan. This is somewhat similar to Twitter announcing they have just crossed 10 billion tweets– who cares how many of these are real (by humans versus robots) or how many were even seen by a human.  The point is to show large numbers.  Remember the search engine wars on how many pages each had indexed?
• Facebook will be able to sell engagement more broadly: Albeit, the engagement is in the form of someone clicking on a button, as opposed to interacting at a deeper level.  Advertisers may not realize this change, which will allow an interim bump in earnings. From an optics standpoint– wouldn’t you want to increase your fan count, even if you have to change your language to say that “X number of people liked my page” instead of “X number of people are fans of my page”?

Hat tip to Nick O’Neill and curious to see what other Facebook advertisers think of this.  If a fan might have been worth 50 cents to you before, what’s it worth now?

Whoa, I just logged into my Google Analytics and see it in Korean.  I hadn’t changed my browser’s language settings, logged in as another user, or had dinner at my favorite Korean restaurant.

I have seen this kind of unexpected personalization from Facebook before, where sometimes they change your language settings based on where you’re coming from. It reminded me of a conversation I had with the CEO of PeekYou yesterday.  We were talking about how Facebook will often nudge you to reconnect with friends you haven’t spoken to in a while. 

Given the amount of data that Google and Facebook have about you, could you imagine walking out of the grocery store — then seeing Facebook send you a text message saying “Hey, you should have bought Miller Lite at Albertson’s, you idiot– it’s $5 cheaper per case there!”  

With applications (games, really) that combine mobile, social, and local– people are broadcasting what they’re doing, where they are, and what businesses they frequent, so it’s actually possible to do that now.  Do you have a rewards card via your favorite supermarket, airline, or hotel?  Now imagine you earn extra points by signing into that program’s Facebook application.  

Would you do it?

P.S.– while most of the words are in Korean, you can still mouse over the links to see the words in English.  Thank goodness that urls are in our alphabet.  And then notice that “Conversion University” is not spelled out in Korean– maybe there’s not a translation for that!

Read the MediaPost article, hot off the presses.  Omniture (now owned by Adobe) will have the ability to buy ads via SearchCenter, their PPC management tool, by the end of 2010.  That’s over 3 years behind BlitzLocal– an eternity in web advertising, so it will be interesting to see what product is in place by then.  I will want to know if Omniture has plans yet to integrate Facebook into SearchCenter such that it’s treated like another search engine or whether it operates orthogonally (since social media plays in the the AID of the AIDA funnel). 

It will be interesting to see how large agencies and brands adapt, given their penchant for wanting simple interfaces to manage campaigns, as opposed to performance marketing on Facebook.  The world of buying Facebook ads is significantly different than traditional keyword advertising– much closer to the content network, but still it’s own animal.

There is also the issue of attribution, since social media adds additional touchpoints earlier in the funnel.  On Facebook, people find out about brands and develop trust from seeing what their friends like and endorse.  To be able to now see those social touchpoints later convert on Google search will pose an interesting challenge to advertisers that have to now allocate budget between social and search.  This doesn’t even yet address the issue of brand bidding, which also messes up the perfect dream of automated bidding– to be able to hide behind the black box math that is actually just last click attribution.

Even when Facebook does introduce their own conversion pixel later this year, it doesn’t address the issue of how to allocate credit when a user has multiple clicks in their clickstream prior to a conversion.  Neither last click nor first click nor average click is the correct answer.

I believe in a multi-channel environment, the advertisers who rely upon having smart in-house strategists will win over those who decide to shell out cash to buy the most expensive software.  Online marketing, and marketing in general, is increasingly becoming multi-channel, which will scare some into hiding behind software, while motivating others into arbitraging out the profits amidst the confusion. 

We’ve been at this 3 years with brands large and small, having seen and experienced the problems that the big players have yet to even encounter.  What do you think will happen?

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