Friday, February 1, 2013

facebook - the real business benefit

Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted - said Einstein.

This is so true for facebook.

Facebook advertising - impact is measurable and hence can be sold to businesses in exchange of revenue. Creating a Facebook page and offering promotions for customer engagement can be successful as well. But I believe very few people care to see a promoted post or banner adds and hence have much limited value than the real benefit Facebook offers in the actual sales process.

Demand Generation through show-off, word of mouth and peer pressure is the real value offered by Facebook to businesses. You see your friends cruising in Carnival and you get inspired to try Cruising. Your wife purchases a Diamond Ring and shows off to her friends. She feels excited when her colleagues like(or for that matter dislike!) or comment on that post. This show-off starts a chain reaction of peer pressure driven impulse buys - now her colleagues want a Platinum-Diamond set for a bigger show-off. And this chain reaction continues...

But can this effect be measured? Not perfectly. Models can be created and Big Data Scientists can try to measure it through shares, likes and actual purchases linked to it but I think it will be very difficult for Facebook to monetize this real benefit. 

The real benefit of social networks can only be felt if Social Networks cease to exist.

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