In a post IPO world the solution for Facebook is make users decide the price of advertising

When Facebook starts trading today from a base $62bn there will clearly be pressure to increase value and print even more money. Many commentators, including Jason Jenkins of CNET UK think this spells a simple choice for Facebook. ‘There’s a real tension between making a lot of money out of this site and making it a really cool site that users want to use’ he goes on ‘One side at one point is going to lose’.

The reason for the perceived conflict is that Facebook ads, seen as the primary source of new revenue, are not currently that popular with users, their ad engine offers limited community data for media buyers and compared to Google offers a much lower CTR because users are not actively searching. Place a short-term, stock market fuelled timeframe on Facebook value and ads are the obvious choice.

However, Facebook is already printing money and Jan Rezab, Chief Executive of Socialbakers takes a longer term view ‘To make money Facebook must ensure brands that use its platform are posting content that is engaging’

I agree and suggest that Facebook needs to prioritise brands that post a steady stream of beautiful and engaging content for users. As such, Facebook should reward brands that produce the most compelling content and actively help deliver it, not to the side bar but directly to fans’ news feeds. If brands choose to supercharge their reach with media spend, it should be from a basis of quality content.

Of course many users would be up in arms if Facebook were to suggest that ad revenue influenced what got delivered to a users’ wall. However, EdgeRank already makes this decision on behalf of users for content produced by their own friends so it is simply ill-informed to suggest this algorithm isn’t already at work. We believe it would empower users to vote with their feet and activate a much greater say in the success of content and the brands reaching out to them.

I welcome the challenge that the engagement of branded content may influence the ability to buy Facebook advertising. Unlike traditional media advertising, where engagement measures are blurred, this might cause some ruffled feathers in your average media agency – Good.

From an agency that consistently delivers brand engagement rather than numbers of fans, we are biased. In April, different Facebook pages managed by ISM appeared in each of the four of the Socialbakers top 10 ranking list Facebook engagement in the UK.

So we suggest that Facebook can reconcile social and commercial responsibilities by putting users at the heart of its advertising engine. This would allow Mark Zuckerberg to stick to his vision of quality content and challenge brands to take the Facebook audience seriously. Come on Mark, start a big shake up in the traditional advertising industry!

Written by Dan Naylor