The Facebook Massacre

Since its IPO, Facebook has been in a world of pain. The AdContrarian predicted as much on the day of the IPO and this week explained the house of cards that not only the IPO hysteria was based on, but also Facebook’s revenue model. Something else to pay attention to: the cascade effect of the dismal Facebook IPO on other social networks and tech companies, as its overvaluation could have tempered expectations from sites like Twitter or Kayak, who may think to go public. It’s quite possible that Facebook single handedly — and simultaneously — popped and prevented a bubble. Maybe.

The amazing thing about the Facebook IPO hysteria is that the whole foundation was built on — as my dear mother used to say — shit and glue. Facebook’s revenue model is dependent on selling advertising space, and there is compelling evidence that paid advertising on Facebook has thus far been uniquely ineffective. But we live in an age in which the marketing and advertising industries trust unreliable and foolhardy pundits and experts more than we trust facts or the evidence of our own eyes… Could it be that the Facebook face plant will serve the purpose of injecting some reality into the fantasy world of advertising and marketing? Not a freakin’ chance.

Click to read the article at the AdContrarian and follow him on Twitter @adcontrarian.

https://digiday.com/?p=14350

More in Media

Media Briefing: Publishers search for new ways to grow (and authenticate) audiences, overheard at the Digiday Publishing Summit

“[Advertisers] already pay data providers for data. So why not pay the publisher?”

Research Briefing: Publishers’ revenue sources are top of mind at Digiday Publishing Summit

In this week’s Digiday+ Research Briefing, we examine which revenue streams were top of mind for publishers at the Digiday Publishing Summit, how TikTok is getting even more marketing spend from brands and retailers despite facing a potential U.S. ban, and how Disney is rolling out DRAX Direct, a direct integration with the industry’s largest DSPs, as seen in recent data from Digiday+ Research.

How Forbes is testing its SSPs to improve programmatic ad revenue

Forbes has been running tests with its SSPs to improve the ad tech firms’ contributions to the publisher’s revenue.