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How Facebook Community Pages Hurt Brands

by Erik Sass, Friday, May 21, 2010, 3:28 PM

Amid widespread criticism of Facebook's recent changes and their impacts on user privacy, one of the most damning analyses comes from Jeremiah Owyang, a partner specializing in customer strategy with the Altimeter Group who outlined potential damage to brands in a recent post on his blog, "Web Strategy." Bowing to Owyang's expertise, here's a quick outline of his analysis and critique.

Owyang focuses on one troublesome aspect of the recent Facebook overhaul -- the introduction of new "community pages" which draw together content from Facebook members' wall posts and outside sources, including Wikipedia, around certain popular subjects which appear as interests, locations, or affiliations in member profiles. These include general things like "cooking" or "learning foreign languages," institutions and places like "Stanford" or "Lima, OH" -- but also many well-known brands, like, say "XBox."

Noting Facebook's tendency to do whatever it pleases with member data and "ask forgiveness later," Owyang takes the company to task for violating trust with members and advertisers with the new community pages. From the member perspective, Facebook doesn't seek permission from members to re-use their wall posts in a different context. This seems quite bad enough -- but Owyang notes that the community pages constitute a big breach of trust with brands as well (it seems brand advertisers weren't advised about the plans for community pages ahead of time).

One of the main problems is that community pages for brands create separate, redundant Facebook destinations which duplicate and compete with the official pages created by the brands themselves. Owyang expects this to create a good amount of confusion among users, and a good amount of irritation among brand advertisers who don't have any direct control over the community pages, and can't even respond to inaccurate or hostile content, as the community pages don't allow comments. Facebook may open the community pages to communal editing at some point, a la Wikipedia, which would give the brands a modicum of control -- but also potentially force them into conflict with Facebook users.

Meanwhile social media strategists face the prospect of community pages for their brands (using the same logos, to maximize confusion) with more "fans" than the official pages. The backlash will be especially pronounced among brands which have already invested substantially in their official presence on the site, as they feel the original terms of the investment have been abrogated by Facebook.

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by Mark Walsh, 1 hour ago

Branded content sites outperformed ad networks or Web portals across key ad metrics including awareness, message association, brand favorability and driving purchase intent, according to new research from the Online Publishers Association.

The report is the fourth in a series of studies by the OPA finding member sites like USAToday.com and Discovery.com outpace Internet industry norms (based on Dynamic Logic's MarketNorms) as well as ad networks and portals in ad effectiveness and brand impact.

Within the key 18- to 34-year-old demographic, the study showed ad networks had a negative impact on purchase intent and failed improve brand favorability.

"Ad network performance has declined to a point where they provide no significant increase in purchase intent to advertisers, said OPA President Pam Horan. "As a result of this insignificance, the average brand campaign may not achieve greater brand lift by advertising on an ad network."

The most popular ad sizes -- medium rectangles, leaderboards and wide skyscrapers -- performed significantly better on branded content sites across most ad metrics. Video ads also showed better results on OPA sites, especially in purchase intent, ad awareness and message association.

Consumers are also more likely to be involved with interactive ads on content sites, with a higher impact on awareness, message association, brand favorability and purchase intent.

In terms of industry categories, CPG, entertainment and telecom ads on premium sites surpassed industry norms, especially in more metrics like brand favorability and purchase intent. By contrast, telecom and travel ads on portals, and technology ads run across ad networks, led to statistically negligible purchase intent.

A separate study by research firm Advertiser Perceptions recently found 52% of agencies and marketers plan to spend more on content sites this year this year, while only 35% were likely to increase budgets for ad networks. To help lure more ad dollars to branded content sites, the OPA last year introduced three oversized ad units, including the widespread push-down format.

However, spending on performance-based advertising -- more closely associated with ad networks -- continued to increase last year. The category accounted for 60% of online ad revenue in 2009, up from 57% the prior year. CPM-based buys decreased from 39% to 37% of buys and hybrid-pricing models fell from 4% to 3% of ad sales, according to the Interactive Advertising Bureau.