|Oooo! Nice suit, Mark!|
But I do know a little about brand marketing, and Facebook made some big boo boos when it came to that.
To put it pointedly, the Brobdingnagian minds that put the Facebook IPO together ignored four of the nine Unbreakable Rules of Marketing (yes, another shameless plug for our book), and it is already coming home to haunt them.
Rule #1 Ignored: Consistency Beats Ability
This rule states that in marketing anybody who sticks with a good message is going to beat anybody else who keeps changing the message for a different one.
Facebook's message has been, from the beginning, all about sharing. It was a place you could share your pictures, your thoughts, your feelings, your favorites, your likes, your whole life with all of the world--or at least, all of your friends. In spite of the confusion and controversy surrounding FB's ever-changing privacy settings (in fact, a current joke going around is that FB had to go public because even they couldn't figure out their privacy settings), it has generally erred more on the side of openness. Sharing is the Zuckerberg mantra. Until it came to its IPO.
For some reason, Mark Zuckerberg and Morgan Stanley (the company that underwrote the IPO) decided to share only certain information about the company's revenue projections with a select, privileged class of investors. In fact, they put together a two-tiered structure of investors, one tier for Mr. Z and a select group, the other for the rest of us, the hoi polloi...or, to put it in terms we hoi polloi might better understand, suckers. Some of the former group even started selling off their shares quietly before the IPO, knowing what the rest of us didn't know; that the initial price was highly inflated. Of course, the SEC is looking into this to see if there were any insider trading violations (duh!), but aside from that, it was a colossal departure from FB's consistent brand position of sharing. They didn't.
Zuckerberg went further with this stinginess by reserving for himself 57% of the voting shares in the company, so basically nobody who had invested in the company had any right to share in how it was to be run. We (both the first tier investors and the sucker-class) were just supposed to pay our money and shut up.
Obviously these actions worked against the consistent Facebook brand message of sharing. Facebook didn't want to share certain, potentially damaging information with all of its investors, and Zuckerberg didn't want to share power with anybody. It was his company. And it was to be public in name only. Go found your own social media company. This one's mine.
Rule #2 Ignored: Perception is RealityBy ignoring the Consistency Rule and departing from its "let's all share" brand position, Facebook also ignored the second Unbreakable Rule of Marketing, "Perception is Reality." They lost control of the story. People were now starting to think that all the generous, open, we're-all-one-big-happy-human-family narrative was a cynical sham. That's going to cause irreparable damage to Facebook's brand in the future
Zuckerberg hasn't helped the perception. Since the IPO did its belly flop, by refusing to give interviews or address the embarrassing slide of the stock, he and Facebook have just let the press and comedians take the story and have their hairy way with it. Maybe he was advised by PR counsel to lay low until this all blows over and the share price stabilizes (it is as of this posting at $25.87 and still falling daily from its initial price of $38). Or maybe the perception is right; Facebook doesn't really like to share...unless it's your private data with third parties.
The CEO also didn't help his brand perception by continuing to show up at board meetings in his signature hoodie. While an adorable, iconoclastic statement when Facebook was a brash, young start-up, Zuckerberg's slacker wardrobe hasn't exactly shored up the weak brand perception. His style has now just become an affectation. If FB had risen 32% in value instead of lost that much, perhaps the hoodie image might have played well to the New Generation of Leader brand. As it was, it just reinforced the perception that the company was run by Doogie Howser (who at least wore ties).
Rule #6 Ignored: Give Love to Get LoveFacebook's violation of this rule gets back to the conditions of secrecy and stinginess that characterized the IPO in the first place. The rule states that, in order to be loved, you have to love first. You have to really love your customers, your shareholders, your employees, the whole world. And you have to mean it.
Facebook's dual-structured IPO seemed designed to piss off the maximum number of people. Zuckerberg himself made out like a bandit; literally. But he showed no love for his investors, or his board, or his customers. He came across as a greedy kid, unwilling to share either information, power, or money. Now there's nothing wrong with making a lot of money. That's great. But if you do it in such a way that a whole lot of people feel ripped off, then that same whole lot of people aren't going to love you for it. Or love your company.
My daughter, now in college, tells me anecdotally that a lot of her friends are dropping off of Facebook. I've also known a few of my own friends to have dropped off. I don't know if FB is experiencing a falloff in membership (nor do I expect them now to share that information if they do), but if the share price is any index of lovability of a company, Facebook isn't much liked right now. It may be the 500 lb social media gorilla at the moment, but it's made itself vulnerable to the next upstart who can demonstrate more respect-- and love--for its customers.
Rule #9 Ignored: Everything is MarketingEverything has a direct affect on a company's brand, even in the complicated structuring of a public offering. Neither Facebook nor Morgan Stanley, in their cleverness of lighting the exploding-cigar of their IPO, seemed to appreciate the damage they were going to do to the brand of Facebook itself. The way an IPO is presented is the same as a brand campaign.It's a marketing message.
It even comes down to little things. And not just the hoodie.
The fact that Zuckerberg chose to have his wedding on the day after the IPO was itself a marketing message; a bad one. Like his hoodie, it showed the millions who had considered investing in his company that he didn't respect their apprehension. They're watching their life savings evaporate before their eyes, and this kid is getting married. To some of the nonplussed public it even looked like a cynical move to protect his sudden new wealth ($20 billion) from being included as a joint asset in his marriage. California, where he got married, is a community property state, and so any assets (like stock) owned by one of the spouses prior to the wedding are not considered joint property.
I'm sure this was the furthest thing from Mark's mind. He probably was feeling jubilant at suddenly being among the richest men in the world and wanted to spontaneously celebrate by marrying his longtime girlfriend. That would be perfectly natural. Hell, I'd want to get married if I suddenly came into $20 billion. And I wish them both a long and happy marriage.
But the timing of it was brand-deaf. If, as with the continuation of the hoodie look, the IPO had seen FB stock take off instead of tank, the public reaction to the wedding might have been "Awwwwww! That's so cute!" instead of "Hmmmm...that's odd." So even something as personal as a wedding, to a public figure anyway, is a marketing message.
I did notice he wore a suit to his wedding, though. An ill-fitting one. He looked like a kid on his prom date. And I'll bet one of his shirttails was hanging out the back.
Yeah, you're right; that would be marketing, too.