Facebook is one of those companies that’s captured the imagination of everyone. Marketers, technologists, privacy advocates and "regular people" have all talked about, written about and been on TV talking about the company.
The things they’ve written about have ebbed and flowed over time. Sometimes they were talking about the unethical beginnings of the platform. Sometimes they were talking about how it completely ate the lunch of the previous network, MySpace. Other times there were conversations about privacy or about making it easier to communicate with old friends or do business.
Recently, the buildup to Facebook’s initial public offering, followed by its stock fizzle, has been the primary narrative.
The stories that are told about companies — and all of the various subplots and twists — are important. These stories are important to customers who want to feel good about the services that consume their time and their memories.
These stories are important to advertisers who want to simultaneously stay "ahead of the curve" but also not waste any money and maintain a strong return on investment, or "ROI."
For a company as large, multifaceted and dynamic as Facebook, there are often many little stories running all at the same time. Like many technology companies, Facebook is notoriously poor at managing how these stories manifest or weave together to form a cohesive narrative.
For example, many of Facebook’s advertising format announcements have been met with dim enthusiasm by their customers — advertisers — and outrage by the people who advertisers want to "engage" with.
Another example would be how financial investors, in regards to the company CEO dressing in a way they perceive as disrespectful, felt during the pre-IPO roadshow.
It’s important to consider that Facebook isn’t simply ignoring the press, or what other people want the company to do. Apple is a case study itself on how to ignore the press and the advice of others. Apple is, of course, doing fine.
But one thing Apple absolutely does with a maniacal fanaticism is this: maintain control of the company narrative.
Through control of narrative (and executing on a far-reaching vision) Apple changed the narrative of its company. In the mid-’90s it was a foregone conclusion that the "beleaguered" company was going to go out of business. It was on the ropes.
Facebook is, of course, not quite on the ropes the way Apple was. It won’t, for example, need a $150 million cash infusion from Google Plus to keep going.
But the narrative of Facebook is on a definite trend that is mirroring its stock value. Not only has the stock price gone down about half (or as some say in reference to Facebook’s pre-IPO acquisition, "They’ve lost about 50 Instagrams of value"), but other events are adding to the narrative.
A number of key executives have left in the past few months. People who were in charge of things that are important for Facebook’s stated strategic future.
While it’s to be expected to some extent that people will leave now that the "golden" handcuffs of stock options have revealed themselves, it is no simple thing to lose important managers with titles that includes words like "director" or "VP" or "CTO" because these people have a depth of organizational knowledge and a working style that has an influence on many aspects of the business.
Then there’s the consistent worry that perhaps the advertising done on Facebook isn’t working. This has always been spoken of sometimes loudly and sometimes hushed. While few disagree that using Facebook as a platform is beneficial, many are not so sure whether spending money to do so is beneficial. This is a problem for a company that makes money from advertising.
The latest twist in the "Facebook advertising doesn’t work" subplot is click fraud. This is something that Google had to deal with in its turn as well. However the problem for Facebook is a bit deeper than it is for Google. Here’s why:
Fake clicks on Facebook come from registered Facebook accounts. Eliminating those fake accounts decreases the number of accounts for Facebook to brag about. Facebook needs to have a high number of accounts to attract advertisers.
This is a classic misalignment: Facebook can lower its account rate and risk appearing to lose relevance and perhaps follow the growth curve of previous social networks like MySpace or Friendster. Or Facebook can continue to take chances and eventually advertisers will start measuring Facebook performance using sane metrics, and the game will change.
In addition, should Facebook choose to clamp down on fake accounts it thereby increases the risk of a false positive — of removing an account that was a real user. The outcry in that circumstance would also be quite far-reaching.
Facebook’s interests are misaligned with its advertising model because it needs to both have a large user account to attract advertisers but also protect its advertisers from click fraud (click fraud that financially benefits Facebook, by the way).
Google, when it began dealing with click fraud, had no such burden to keep all of the Web happy. If it determines that a user is perpetrating click fraud, then it simply doesn’t count the click — it doesn’t ban the perpetrator from the entire Internet. Google also had to develop a useful grievance policy for advertisers who feel they are the victim of click fraud.
So the narrative, of late, for Facebook involves three major subplots:
- Financial: Its stock is on a firm downward trend and people feel ripped off.
- Human: Company leaders are exiting from key departments at a swift pace.
- Customers: Its customers are wondering whether they’re being ripped off.
These three subplots are each complex on their own and have an influence inside the company in terms of morale and outside the company in terms of public and customer perception. Together these subplots can be braided into a damaging narrative about the company and its future capabilities.
OK, so what does all that have to do with you, the real estate businessperson (besides the fact that the real estate business absolutely loves using free tools on Facebook)?
Your company has a narrative too. Your company has financial subplots, human subplots and customer subplots. If we were to make a slight alteration to that bullet list above, would it still be true? Let’s see:
So the narrative, of late, for the real estate industry involves three major subplots:
- Financial: Its stock is on a firm downward trend and people feel ripped off.
- Human: Company leaders are exiting from key departments at a swift pace.
- Customers: Its customers are wondering whether they’re being ripped off.
Are you handling the narrative of your company or the parts of the industry over which you have control like Facebook?
