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June 1, 2010
Facebook Reminds Us to Put the Customer First

A recent McKinsey Quarterly article stated that marketers who make smart digital investments will spend significantly less on marketing as a percentage of sales. It went on to say that these same marketers will shift 20-30 percent of their budgets out of paid media and into content creation. The theory being, of course, that if you are a savvy digital marketer, you are using the channel to connect to your biggest fans and that these fans will distribute your message or experience to others (complementing your paid media efforts).

As I read this report, my thoughts quickly turned to Facebook, the poster child for the social Web and the social home of most of those fans with whom savvy digital marketers are trying to connect. Unfortunately, Facebook comes to mind not because of its success, but because of its recent misstep.

Nobody understands the social Web better than Facebook. With almost 500 million users, their ascent to the top of the digital media world is awe-inspiring. Perhaps even more impressive than their scale is the level of intimacy that their users share via their platform -- from high school graduation to wedding day to childbirth to the first day of school and back to high school graduation again. Facebook has woven itself into the fabric of our lives. It’s incredible to think that we share nearly 25 billion pieces of information with Facebook each month. Having spent time with their executives, I know they are a company that truly puts their customers at the center of their strategy. This is why I’m both incredibly impressed with them but also disappointed by their lack of awareness of the consumer’s perspective on the Open Graph launch.

Open Graph, the mechanism that enables consumers to bring their friends with them as they browse the Web, is brilliant for consumers, for marketers, and for Facebook. It adds value for all players. Consumers get a set of filters that enable the discovery of new ideas, products, and services. Marketers get a better understanding of what consumers like. Facebook, of course, transitions from a destination to a core building block of the Web. However, they missed the mark (pun intended) on execution.

Despite its user-centered nature, Facebook failed to recognize that from a consumer’s perspective there is a distinct difference between life inside the “walls” of Facebook and life outside of Facebook. Because of this, they applied the same privacy controls off the site as that person had set on the site. In the future, users may see Facebook as inseparable from the broader Internet, but that is not the case today. Facebook put itself at risk by not carefully considering how the user would react. This is Facebook’s second strike (Beacon being the first), and while they have significant momentum, they have created unnecessary risk for their brand. Further complicating things, Facebook’s privacy controls are confusing -- it’s nearly impossible to determine what information is public and what is for friends only.

The good news is that Facebook is now listening. In his letter to the public last week, CEO Mark Zuckerberg stated that in the coming weeks Facebook will release new privacy controls that are much easier to understand. While I’m disappointed that they missed on the first try with Open Graph, I’m hopeful that they’re now truly putting the customer first, which is good news for marketers and their agency partners looking to improve the return on marketing dollars. 

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Pete Stein is the president and general manager of Razorfish, one of the world's largest interactive agencies and one of the largest buyers of digital advertising space.

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