It's hard to count the ways Mark Zuckerberg botched the launch of Facebook's "Social Ads" last fall. From the portentous talk of a once-every-100-years "change" in media, to the privacy brouhaha over Facebook's Beacon technology, Facebook's inexperienced CEO did just about everything wrong. At last, he's starting to get things right. Facebook has begun encouraging advertisers with sponsored groups to shift to Facebook Pages instead. Apple, with the largest sponsored group, has moved 400,000 members of its Apple Students group to be "fans" of the Apple Facebook page instead. It's a big, risky, and potentially costly change.
Facebook charged advertisers $300,000 a quarter for a sponsored group; its take from pay-per-click ads promoting Facebook pages is far less certain. But sponsored groups were sold by Facebook's small team of human salespeople; Facebook Pages ads are sold through an automated, self-service system akin to Google's AdWords.
Facebook's hire of Sheryl Sandberg, who oversaw AdWords at Google, was one sign Facebook would be betting on automated advertising. The abandonment of the lucrative sponsored groups is another.
Zuckerberg seems cocksure about the payoff from Social Ads. He has told employees that Facebook will bring in between $300 million and $350 million in revenue this year, a swift increase from last year, when revenues from sponsored groups sustained the company. He seems confident that change is coming. Perhaps so. But for the impatient young man, who will turn 24 in 12 days, will it come fast enough?