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Why we want Facebook to make brands pay for promotion

The Facebook profile of founder Mark Zuckerberg on a mobile phone is seen in this photo illustration taken in Lavigny May 16, 2012. Facebook Inc increased the size of its initial public offering by almost 25 percent, and could raise as much as $16 billion as strong investor demand for a share of the No.1 social network trumps debate about its long-term potential to make money. Facebook, founded eight years ago by Mark Zuckerberg in a Harvard dorm room, said on Wednesday it will add about 84 million shares to its IPO, floating about 421 million shares in an offering expected to be priced on Thursday. REUTERS/Valentin Flauraud (SWITZERLAND - Tags: BUSINESS SCIENCE TECHNOLOGY SOCIETY)


I've been a Facebook bull since shortly after the IPO. The dust settled and, despite certifiably inane bear cases, such as Barrons' $15 call, FB continues to build a base that will take it higher. While there's no question Apple Inc. CEO Tim Cook has it worse, Mark Zuckerberg receives almost as raw of a deal.

Outside of IPO-related gripes, which have all but blown over, the biggest material moan people had about Zuck was that he needed to ease up on the social mission and run Facebook like a business. Generate revenue. Make massive profits.

With a flawlessness Cook could only dream of, Zuck appears to have maintained Facebook's startup culture while transforming the company into a mobile monetization powerhouse with its best days still ahead of it.

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I have seen the present and the future of social media advertising and its name is Facebook. (You can, by the way, go to and "Like" TheStreet's Facebook page here.)

I never bought the notion that it's an ineffective or somehow unfair place to advertise. Mark Cuban got it all wrong. And, now, we're making way too much of Nick Bilton's contention that Facebook must be gaming its newsfeed to get users to promote posts.

Roughly five months into my job as TheStreet's director of social media, I can tell you – firsthand – that, as a brand/multimedia organization, Facebook advertising works incredibly well for us. In fact, I argue that if Facebook's platform doesn't work for you, you're simply not doing it right.

Without giving away TMI and upsetting our CEO, I will hit several points in defense of Facebook, starting with common criticisms of the platform and finishing with details of TheStreet's performance. As we consider the company's long-term vision and potential, I consider this information incredibly useful, even if anecdotal, for investors.

  • I don’t see why it’s a problem that a) Facebook requires brands to pay more money to reach a larger audience (Cuban’s beef and it is true; that’s how FB advertising works) and b) Facebook allegedly, according to Bilton’s experiment, prioritizes shared content with advertising dollars behind it over shared content posted without the financial push. (For the record, I actually believe Bilton here).
  • Isn’t this the type of thing we wanted to see from Zuckerberg? Wasn’t this the main criticism of Facebook, that it wasn’t doing enough to monetize its massive user base? Now, it’s doing just that – going for revenue at the same as it attempts to realize its righteous social mission – yet we’re still on Zuck’s case. The guy can’t win.
  • It’s important to point out that there’s likely a distinction between user-generated content (stuff you post from your personal Facebook page) and content brands such as TheStreet post. In other words, I would suspect Facebook treats a Nick Bilton post differently than a New York Times post and a Rocco Pendola post differently than a TheStreet post from an advertising placement standpoint considering the difference between paying $7 to promote a post as a single user and spending hundreds or thousands of dollars per month as a brand.
  • In terms of results, again, I am not sure how a brand, in particular, could not see results. The ability to target specific audiences with tailored content and see immediate results makes it almost impossible to screw up a Facebook advertising campaign over the long term.
  • As we have scaled into a somewhat considerable Facebook advertising push, TheStreet has the seen the number of people who “Like” its page grow from about 30,000 at the end of 2012 to 45,038, as of this writing. That’s an increase of roughly 50 per cent. And the pace of this uptick continues to increase alongside our following with meaningful organic growth to boot.
  • Engagement on our Facebook page is through the roof. Sharing, comments and post, as well as the above-mentioned page “Likes” are all up exponentially.
  • Month-over-month (between January and February of this year), traffic from Facebook to increased by 85 per cent.

This is real data. Take it for what it's worth. It's one person's experience at one company and, no doubt, we're doing a lot right at TheStreet that paves the way for Facebook to be effective.

However, with that said, I maintain that if you know how to utilize the platform and relay strong content to your users, you'll see results from Facebook advertising. At day's end, my experience seeing results is what it is, but it absolutely makes up a significant portion of my bull case on the stock.

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