Few CEOs can quickly transform their companies, especially when they’re already multibillion-dollar organizations.
Count Facebook’s (NASDAQ:FB) Mark Zuckerberg as an exception. Since the IPO flop in May, he has aggressively pushed a variety of monetization efforts, including an ad network, jobs postings app, a gifts service and even an online gambling partnership.
Still, agile or not … as pointed out in a recent piece in the Wall Street Journal, Zuckerberg’s moves could be far from foolproof.
A notable case is a Black Friday campaign with Walmart (NYSE:WMT). Led by Facebook’s chief operating officer Sheryl Sandberg, the planning took months, and the campaign turned out to be the largest one in mobile history, involving a staggering 50 million ads within a 72-hour period. All paid up front.
The result was less than a rousing success.
While the campaign led to 164,000 new Facebook fans, that didn’t come without its fair share of negative feedback. For the most part, many users actually were annoyed by the ads.
Not good considering many big brands are skeptical about social ads. Remember, for instance, that right before Facebook’s IPO, General Motors (NYSE:GM) announced it had eliminated its budget for spending on Facebook.
The thought is that users go to Facebook more so to hang out with friends, not to get suggestions on a purchasing decision; Google (NASDAQ:GOOG) remains the spot for that. As a result, Google generates more than $40 billion in ad revenues, whereas Facebook’s gets about $5 billion.
That’s not to say Facebook has completely failed on the ad front. Samsung‘s ad campaign on Facebook resulted in $129 million in sales, good for a 14x return on investment. And despite the perceived disappointment, Walmart hasn’t given up on the tactic and already plans to have another Black Friday campaign set for 2013.
The important takeaway here is that social advertising remains in the early stages and will require exhausting experimentation. Facebook is willing to tinker — investors will just have to see more successes than failures before being sold on it.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.