MENU

Kicking Facebook while it’s up

Facebook  (NASDAQ: FB )  is gearing up for what should be another strong quarter tomorrow, but not everyone is impressed by the current state of the leading social networking website operator. In a scathing report, market specialist Forrester Research argues that the best marketing strategy could be to just lean on it as a free resource.

“Facebook is failing marketers,” begins Forrester’s open letter to Facebook CEO Mark Zuckerberg.

It’s not merely a knee-jerk opinion. Forrester “surveyed 395 marketers and eBusiness executives at large companies,” and Facebook came in dead last in satisfaction when it comes to creating business value against other digital marketing opportunities.

It’s easy to see why LinkedIn  (NYSE: LNKD )  would rank ahead of Facebook. The social networking hub for professionals attracts the hiring and the hired. It’s a place for head hunters. It’s a place to make industry contacts. It’s not just teens swapping Bitstrips or trendy memes. On a scale of 1 to 5, with higher ratings indicating greater business value satisfaction, LinkedIn wound up in the middle of the pack at 3.7. Facebook is at the bottom with 3.54. It’s a pretty tight range with on-site ratings and reviews topping the list at 3.84. Google (NASDAQ: GOOG)  should be happy to see search marketing at a close second with a 3.83 rating.

However, Facebook has to be shaking its head to see Google’s own Google Plus and its tricky-to-monetise YouTube ranking ahead of Facebook. Even Twitter (NYSE: TWTR)  — believe it or not — has a higher rating with marketers and eBusiness execs when it comes to paying up for promotion.

“I know this statement sounds remarkable, perhaps even unbelievable,” Forrester’s Nate Elliott continues. “After all, you offer marketers access to the largest audience in media history and you know a remarkable amount about each of your users.”

Yes, it is surprising. Forrester doesn’t believe that Facebook is doomed. Elliott concludes that Facebook still has time to correct the two things that it doesn’t seem to be getting right at the moment. He believes that the magnetic site needs to drive genuine engagement between companies and their customers. He also feels that Facebook needs to do a better job of using its growing social data to serve more relevant ads. Forrester estimates that just 15% of the ads on the site are leveraging Facebook’s social insight.

Forrester may be right, but it’s hard to imagine a company that doesn’t have a paying relationship with Facebook — settling for viral victories and being sought out by site users — faring better than advertisers that can get their brands featured prominently on Facebook to their fans (and perhaps, more important, the friends of their fans). This report can’t be ignored, though naturally it may not hold as much weight if Facebook serves up another winning quarter tomorrow.

Analysts see revenue climbing 51% and earnings soaring even higher for the quarter. Marketers certainly seem to be flocking to Facebook. As long as Facebook can find a way to tame the contagion of humorless Bitstrips that have taken over the site in recent weeks, it should be just fine.

Wait a minute. You don’t think that Google or Twitter is behind Bitstrips in a devilish plot to shake out Facebook regulars, do you?

The Australian Financial Review says "good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit." Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

A version of this article, written by Rick Munarriz, originally appeared on fool.com.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.