e-marketing: facebook

I did a comprehensive study on facebook and wrote a thesis on it last year, so I collected quite of a lot of primary data from a group of facebook users. It’s interesting to look at the study again from an e-marketing prospective.

Facebook was initially marketed to students before opening up to the public and it’s also been marketed to businesses and investors. So there are currently three segments in their target market.

1. End users
2. Investors
3. Advertisers

Word of Mouth is the main way that facebook is marketed. This is mainly done online, like you can enter your friend’s email and invite them to join.

Facebook got a lot of free publicity due to it’s popularity. This applies to all groups.

A seldom known aspect of facebook’s marketing is its counter marketing practice, which I think is the most interesting one of all.

Counter Marketing

We all know that in marketing we must get the product, price, place and promotion (4p) right.

Facebook doesn’t charge users, so the price is right for most people, but not all. Some people would only use facebook if they are paid to do so, some others won’t even use it for money. So the price is not right for everybody.

Put the price issue aside, does Facebook want everybody? Interestingly, no, or at least that’s what appears to be the case.

Facebook has an surprisingly aggressive approach to retrieve its service with no meaningful explanation. That means, after getting everything right in marketing, facebook is happy to allow everything to drop dead just like that.

Imaging applying this to a real estate agent. After doing all the marketing to sell a house, you suddenly give up the sale and refund the customer with no meaningful reason. You also take one step further and decide this customer can never buy from you again.

A bit odd? That’s just what facebook does online. Facebook has a high rate of discontinued accounts, not because users left, but because the company has been systematically closing accounts as a way of manipulating the portfolio of their target users.

When you see a friend turned into a question mark, it’s often not because your friend removed his/her profile photos. The most likely scenario is facebook suddenly removed the account without even telling your friend. There are a large number of people I interviewed have question mark friends in their facebook. It’s reported that facebook did not give explanation to users affected. If there were any explanation at all, it would be the “The end justifies the means” policy that facebook has. What the company did was basically saying, look, your account is closed, so you much have done something wrong, just go to check our TOS (Terms of Services) to find out yourself. Occasionally, an affected user may not buy this, then facebook would make an effort to send out a copy of the TOS. But that’s about it.

When this were translated into real estate business, it would be like saying, well, since we are not selling you the house, you must have done something wrong, just go check the real estate journal and all the law and regulations, to find out what you did wrong. If the customer were foolish enough to do that, it’s very likely he/she would lose interests half way doing it.

This “The end justifies the means” policy offers the service provider or seller more flexibility in modifying their user portfolio with less possibility to be accused for being unfair. It’s reported that facebook has successfully used the policy to filter out some older folks and people with special interests, so they can create what they think is the ideal environment for facebook without being protested by users affected. Anyone read Facebook’s TOS would notice the company is making extraordinary efforts to internalise their ideology to their users: if we close your account, you must have done something wrong, end of the story.

This way of modifying user portfolio has a strong e-business imprint, partly because taking back service is a lot easier in the e-business environment than in the off-line environment. Take real estate business as an example again, it’s not always easy to take the product back as if you leave it too late, the buyer would have signed a bunch of legal documents and possibly already moved into the house. But on facebook, the service can be retrieved any time not matter how long you have been using the service. There is no law suggesting that you are more protected for being a loyal user.

So why companies do counter marketing?

1. Some companies are running on certain ideology which may at time override their financial objective.
2. Modifying customer portfolio is a way of maximizing market reach although there are fairness concerns.
3. A company in monopoly position can use it as a way to modify customer behaviours to better serve the company’s needs rather than the reverse way commonly seen in traditional business environment.

see also e-monopoly