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Facebook and Brands: Is A New War Brewing?
Facebook and Brands: Is A New War Brewing?
By: iMedia News Bureau

Facebook abruptly deactivated official pages of a few global brands in India, sending smoke signals that this arm-twisting is a sign that Facebook is getting desperate for monetization


The ‘official’ Bournville page on Facebook

There’s an irony between social media which has become an important part for marketing products and services, and companies like Facebook and Twitter, who have a mandate to raise money to stay afloat. Ironical as it may also sound, but for a long time now Facebook (and even Twitter) has been struggling to monetize their platform that has become ubiquitous globally. And the fallout of this seems to have reached the shores of some important brands globally. The recent example of the same came to light when Facebook abruptly deactivated the official India pages of apparel brand FCUK and Cadbury’s dark chocolate brand Bournville.

To open any account, every user has to agree to the terms and conditions. In the same way when a brand opens up an official fan page, they are also bound by certain clauses which Facebook calls the ‘Promotion Guideline’ that are intended to “govern your communication about or administratin of any contest, competition, sweepstakes or other similar offering ((each, a "promotion") using Facebook.” Under these guidelines whenever a brand wants to run promotions, they are allowed to do so by building external applications that is intended to state that “the promotion is in no way sponsored, endorsed or administered by, or associated with, Facebook.”

The reason for taking off the two brand pages in India, and other pages across the world previously has been that the brands have violated these guidelines and thus Facebook has the right to take them off the social media portal. From a strictly logical point of view, this is a sound argument. However, there maybe some undercurrents brewing to this that needs a little digging into to find out.

For years after their birth, both Facebook and Twitter struggled to find ways and means to monetize their platform and stay in business. They were supported by venture capital funding, but it is not an endless pool of money and sooner or later businesses are expected to monetize their product. After some failed attempts at Pay Per Click and other such schemes, Facebook began an effective way of monetizing through banner advertising. Today, some of the leading brands globally like Pepsi and Levis advertise on Facebook. However, it also allows users and brands to open up fan pages free of cost. There is thus a conflict of interest between those brands that pay to advertise on Facebook, and those that generate free publicity for themselves with such fan pages. And this move by Facebook, to ban fan pages of FCUK and Bournville, and previously of some brands in the US, is perhaps an attempt to do two things. One send the right signal to those already advertising that they will not tolerate free publicity on the platform beyond a certain limit and two that the brand who have been enjoying the phenomenal opportunities Facebook offers for branding need to cough up dough to be on Facebook.

What this move also opens up, is a debate whether the power that Facebook now controls over the world of social media, makes them heady and whether they would want to use it for their own benefits by harassing brands to drive money into advertising on Facebook. Having said that it has also to be kept in mind that Facebook maybe a social media, but it is definitely not a social service. It is a company that is driven by profits, just like any in the capitalistic societies of the world. Hence, Facebook taking down a page like this might be seen as a legitimate right of the company to try and monetize through their media. What is not very apparent however, are the closed doors negotiations that might take place between Facebook and the brands FCUK and Bournville now, and in the past some with some US brands, to get their pages up on facebook again.

One way that could be thought about through this logjam would be for Facebook to charge companies for opening official pages of brands. But this road is also full of potholes since Facebook is a social entity that evolves organically. To impose any strict diktat like that would only jeopardize what people across the world love about Facebook – its neutrality and openness. It is in this regard, that perhaps Facebook is left with no option but to look at backdoor dialogues initiated by slightly hostile, arm-twisting tactics with other brands or use coercion that forces brands to perhaps pay to Facebook for the services rendered or compel them to advertise on the platform as well.

The truth is no brand can ignore social media and hence none of them would dare challenge them. The truth is also that every social media platform is struggling for money. On the other hand we have brands that spend millions of dollars on advertisements. Would there be a way for the brands to reroute some of the money to these social media platforms, or will social media have to use such arm-twisting methods to get their due. There are no simple solutions as of now, and there’s no option but to wait and watch. The outcome, whatever it is, will have significant impact on the world of advertising and branding.