Facebook: Dangerous For Your Kids--and Your Business
I’m seeing a disturbing trend online. Stores are not sharing news and events on their websites. Instead, they are relying on Facebook (and Instagram, which it also owns) to perform this task. That’s like a customer coming into the physical store and the store manager saying: "Want our news and events? We don’t have it here. Go to the coffee shop next door—which will be filled with our competitors pitching to you."
I believe this is bad for most businesses. I believe that stores should not promote Facebook and encourage a customer to leave a store's site. Think about it: a customer goes to Facebook to see a store’s news, and what happens? They get served ads by competitors. On top of that, they get all these distracting alerts about what their friends are doing. That’s the perfect recipe to lose customers.
I recommend that a store seek to only attract customers from Facebook; one shouldn’t be directing them to Facebook once on the retailer’s site.
If one says, “but Facebook is where my news is, my site doesn't have my store’s news,” then one needs to stop what one is doing and fix that. Add a news feature to one's site. Stop sending traffic to Facebook. It’s even possible that one shouldn’t have a link to Facebook on their site. Sending customers to Facebook may lose ten or more customers for every one that it helps.
Facebook generated $84.2 billion in advertising revenue in 2020. One reason Facebook's adverting revenue is so big is those advertising clicks are customers that visited an indie store's website and then bought from the advertiser's site. The customer left store X, landed on its Facebook page, and clicked competitor Y’s ad. Facebook's massive advertising revenue wouldn’t exist if it wasn’t for this customer poaching operation. While we have heard about Facebook's impact on kids and it helping spread fake news, we can add to this list of grievances what its advertising business is doing to indie shops.
Now, one can say, "but that’s what advertising has always done." My response is simple: but not on Facebook's $84b scale. There has never been a larger or more powerful advertising company than Facebook. There is a proverb that 'behind every great fortune there is a great crime,' and this proverb rings true here. Few companies have ever achieved advertising dominance in such an underhanded, deceptive way. In the analog, print world, newspapers couldn’t track a customer's click-through. But in the digital work, Facebook created the world's leading spying operation. Customers have agreed to it because we want to see our friends’ Ice Bucket Challenge videos. Facebook's growth often comes at the cost of small and indie businesses. They don’t have the budget or know-how to compete with the big retailers and brands using Facebook's advanced advertising tools. Notably, brands are often the biggest winners here. Brands, which traditionally partner with stores, can sell direct and spend much more to track and target customers online since their margins are twice as big in a direct-to-consumer sale. They are the ones most likely waiting in the ‘coffee shop’ next to the store. A store should ask its brands if they are advertising on Facebook. Most will say they are. In other words, the brands are admitting they are standing in the coffee shop next to your store. Due to Facebook and its website tracking technology, they can do this much more easily--and on a global scale--than before the rise of e-commerce.
To test my theory about Facebook, we'd need to measure the impact of sending customers off one's site and away to Facebook. How many people that leave a site to visit the store's Facebook page return? How many prospective customers view an item on a store’s website and afterward buy it on another website? Did Facebook's ad network play a role? What is the 'leakage' of customers to Facebook? Is there an inverse relationship between indie stores' sales and Facebook's ad growth?
I've been in the web business since 2000. Before Facebook was created in 2004, stores often shared news and events on their sites. While it may cost more than Facebook's 'free' service, it's money well spent. Stores sharing news on their sites is the best way to short circuit Facebook and its advertising network from poaching customers. The goal: don’t send customers to the coffee shop next door. Do send people from the coffee shop to your store.
The coffee shop analogy is even a bit generous. Reason: most people visit Facebook to see news from family and friends. Really the store is saying: "go to the family picnic next door where my competitors are soliciting." Stores are sending customers already on their site to a family picnic with competitors seeking to poach their business. We'd not do that in the analog world. Let's keep customers in our digital stores and help them while they're with us.