Tuesday, May 15, 2012
Facebook’s Public Party
Having reached the age of maturity, it is time for Facebook to go through that rite of passage reserved for those who count their wealth not only by pocketed assets, but in the promise of the one-percent’s bright future. Yes, reader, it is time for the big business equivalent of the cotillion ball: the IPO road show, where white ball gowns are replaced by Armani suits, and slightly stronger alcohol.
On May 18th, Facebook makes an initial public offering—IPO, to those of us who actually read the Wall Street Journal—and seeks a staggering valuation of $100 billion dollars. That’s about 33 times its advertising revenue. As a point of comparison, Google’s worth is $200 billion, which is 5.5 times its ad revenue. This is where one begins to see the promise part of this debutante’s pedigree, as ad revenue is kind of an important number when it comes to valuing a company.
However, just as with any social function that involves strapless gowns and up-do’s, pretty goes a long way to blunt thinking of the past and turn thoughts to the possible delights found in a future dancing with the girl with the most friends at the party. Such is the hope of Facebook as it fills its dance card with investors. But it didn’t help Facebook’s popularity when Martin Sorrell, CEO of WPP, the world’s largest advertising company, and “da man” to many who are trying to manage a fracturing marketing paradigm, came out to question the measurement of social media.
We asked that same question, and did something about it, connecting consumer engagement with a category with consumer engagement with Facebook within the context of that category, to measure exactly what was in the cross-hairs of where they meet. In short, helping advertisers measure exactly what they should be doing on Facebook, as well as what they are getting from being there.
We were not invited to the recent IPO ball. But we will be happy to attend the many after parties where advertisers take off those tux jackets and slip off the heels, getting down to the real work of figuring out the dynamics of this new brand and Facebook hook-up.