Botched IPO leaves Facebook brand in limbo: Experts

By AdNews | 18 September 2012

Facebook's corporate brand has taken a hit in the wake of its controversial botched IPO, but has its consumer brand been similarly affected?

FutureBrand managing director Colin Jowell

Colin Jowell

It’s a bit of a chicken-and-egg question. Both are at least in some part victim to the incredibly short life cycle of technology brands. As a user matures, Facebook becomes more of a habit than a brand we would actively recommend. And whatever their actual behaviour, if a user perceives themselves to be engaging less, that same person as a shareholder questions the future profitability. Ubiquitous usage is a great source of corporate value, but it opens the way for greater sentiment that may not work in the brand's favour, linking the corporate brand and consumer brand inextricably.

Press commentary at the time of the IPO (yes, even the serious press) commented as much on Zuckerberg's lack of appropriate Wall Street attire as they did on the value of the offer. And those who saw The Social Network certainly have no love lost for the man. Is that a consumer brand issue or a corporate brand issue? The answer, of course, is both.

While there are no guarantees in the fickle world of tech, it would be a little foolhardy to bet against the future of the brand. The rise of more purpose-driven networks such as LinkedIn shows they seem to succeed best when they are complementary. There is more diverse management taking the focus off Zuckerberg, and if they deliver on their recent promises to improve the mobile experience and explore their potential in the payments and financial services area, it will certainly succeed in becoming further stitched into the fabric of our lives.

Interbrand Sydney general manager Andy Wright

Andy Wright

There's great debate around the success of Facebook's IPO. The market got excited by the hype and potential of a man (Zuckerberg) and a platform (Facebook) with millions of fans across the world. The same market is now debating the validity of this excitement and their investment. Markets like safe bets, but Facebook was never a safe bet. It was (and is) a worthwhile risk based on incredible potential. And it is still a long way from being realised in revenue terms compared to the valuation of its stock.

Facebook is in a unique position based on its size and access to valuable information, but I'm not sure there is a Facebook brand yet. There are the beginnings of a great one, but to me, Facebook is just a very popular platform. Five to 10 years ago, I argued the same about Google. Now we're seeing Google's true value and success as a business. It's a shining light for large corporations and budding entrepreneurs.

Facebook's users aren't about to ditch it anytime soon. Consumers are unlikely to see any negative IPO effect, unless it impacts on decisions made to generate revenue that negatively effects the everyday experience.

Zuckerberg will no doubt continue to divide the market and make a few mistakes. The Facebook of today may be a very different proposition this time next year. If I was going to make a bet, though, I'd say he's got at least a couple of aces up his sleeve. 

Hulsbosch strategy director Michele O'Neill

Michele O'Neill

Actually the bigger corporate brand losers were the banks. Morgan Stanley was the lead underwriter and they suffered some real fall-out. Hard to feel their pain. I’ve always thought that money just makes you more of who you already are and that’s the truth when you imagine all those guys at Morgan Stanley, JP Morgan and Goldman Sachs racing to the trough together. IPOs when managed with big banks have all sorts of mechanisms in place that protect the bigger institutions and 'special clients'. I don’t think Google used investment banks for its IPO – pity Mark didn’t look over the fence. 

Facebook as a consumer brand delivers to its users, it provides a service people like and want. That’s what successful brands do. So I don’t think the IPO did damage in the way it did to the banks and the NASDAQ.

Perhaps for the small percentage of the 900 million users who bought stock there was a problem. I think there are people out there who’ve never ventured into the market before but did this time. Small investors playing the long game, ouch. The debacle was high on Google search terms for some time after, so it can’t just have been bankers checking out the latest news.

We’ve all read the marketing books that say 'don’t over-promise then under-deliver'. Maybe not in Mark’s iPad library (can’t imagine him having a bookshelf). The bigger conversation still hanging around social media is monetisation. 

Since arriving in Australia and changing my location on Facebook from Paris to Sydney, I’ve been offered a Robomaid that allows me to 'come home to clean floors every day' or 'better-than-Botox $5 wrinkle therapy'.

I don’t think so.

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