Leading up to their potential $5 billion IPO, Facebook noted to the Securities and Exchange Commission the importance of Facebook-driven word-of-mouth marketing. The social media behemoth seems to believe that its relevance as a tool for brands to connect with their audiences will inevitably translate into advertising revenue. But will it?
While Facebook commerce is still in the exploratory stage, the company claims social commerce — friends directing friends to various products through the site — will become a force to be reckoned with going forward. While that could certainly be the case, does that mean retailers will actually spend ad money on Facebook? After all, though brands like Nike and Walmart successfully experimented with paid-for social advertising, retailers don’t have to pay to reach out to fans through Facebook.
Or, as fashion and retail increasingly explore other (free) forms of social media to connect to consumers, could Facebook become the platform where they move away from creative engagement and simply invest in paid-for marketing? If that scenario plays out on a large scale, it could make Facebook seem pretty staid compared to more niche, flexible, and appealing social media (like Pinterest), which ultimately could devalue those ads, no matter the reach. We’re pretty interested to see how fashion brands shift into paid Facebook advertising, and if they shift at all — it could deeply impact the way their fans engage with them through this particular social media channel.