That Sheryl Sandberg is One Smart Chick

By now you have probably read about the brouhaha over Facebook’s unbelievably lame efforts to get PR firm Burson-Marsteller to quietly place anti-Google stories of questionable import with some big media outlets, and Burson’s even lamer attempt to throw their client under the bus when the truth came out (Facebook Busted in Clumsy Smear on Google).  Bad form, Burson – bad form.  Isn’t the first rule of crisis PR to own up to your mistakes?

What you may not have read is the current Bloomberg Business Week cover story on Sheryl Sandberg, COO and reining adult at Facebook.  (Btw, I will never get used to calling it Bloomberg Business Week – it’s a ridiculous mouthful.  Of course, I still call the Met Life building the Pan Am building, but I digress.)  I’ve never had the pleasure of meeting Ms. Sandberg, but by all accounts she lives up to the hype – smart, capable, very good at what she does, and possessing many of the qualities that generally make women better managers than men (there, I said it).

The article is a very good read, but the part that really caught my attention is how fb is selling advertising and how it plans to evolve its model.  Here, an excerpt:

“Social ads” on Facebook perch unobtrusively on the right border of the page and usually specify which of a member’s friends has “liked” or commented on that particular ad or advertiser. The data company Webtrends says that only around half of one percent of people who see these ads actually click on them; yet Facebook pulled in an estimated $2 billion in sales in 2010, Bloomberg has reported, and is on track to do twice that in 2011. Facebook executives argue that the click-through numbers are not that meaningful; they say that people remember ads better and are more likely to make purchases when their friends endorse products.

Advertisers appear to be buying that logic. The social network now serves up nearly one-third of the display advertising that Internet users see in the U.S., according to comScore (SCOR), and delivers twice as many ad impressions as its closest rival, Yahoo! (YHOO).

Sandberg wants to let advertisers burrow even deeper into the social fabric of the site. When a user checks into a restaurant using the Facebook app on their mobile phone, or leaves a comment on the profile page of an advertiser, that action gets broadcast into friends’ news feeds, where it can get lost in the clutter. A new tool called Sponsored Stories allows advertisers to pay to turn that member’s action into an ad, which is more likely to be seen by the user’s friends.

It may sound obscure, but if you’re an advertiser, there’s nothing better than converting customers into unpaid endorsers. Michael Lazerow, chief executive of Buddy Media, which helps brands advertise on Facebook, predicts that the largest advertisers will cross the $100 million spending threshold on Facebook this year. “The ones who were spending zero last year are spending millions this year,” he says. “The ones who were spending millions are spending tens of millions.”

Facebook’s tentacles now touch millions of other websites, from the Huffington Post to (AMZN), that use its reader comment system, and its “like” and “send” buttons, to allow their users to share their content with their friends on the social network. Under Sandberg’s direction, Facebook has begun preaching the mantra of what it calls “social design” to companies that want to remake themselves for the fashionable age of social media. It sets up Facebook brilliantly—those social ads may someday start showing up on any site that has a “like” button.

While the term “social design” sounds vaguely sinister, this is a pretty genius idea not only in its potential power but in its simplicity.  Sponsored Stories unleash the value created by millions of fb users who happily endorse a product they not only like, but because they’re endorsing it publicly, to their entire network, they obviously take some pride in the association.

I’ve no doubt that the naysayers will have a field day with this – that it’s somehow “wrong” to turn my positive comment on Shorty’s Widgets fb page into an ad.  You know what?  If it bugs you that much, don’t leave a comment on Shorty’s page.  Truth is, you’ll probably be hurting his business more than you’ll be hurting fb’s.

To read the article in full, check out this link:


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