Every time a new online business seems to take off, the founders or owners attempt to make it like they're not in it for the money, and they're not going to intrude on users with ads. That also gets people excited and creates buzz, even though it's a pipe dream and fairy tale.
Now comes Mark Zuckerberg, Facebook founder, who in his interview with Lesley Stahl on Sunday had this to say concerning advertising on the social network: "I mean, there have to be ads either way because we have to make money….We have 400 employees. We have to support all that and make a profit."
He said this in response to criticism about the Beacon initiative, which allows Facebook users to see what their friends are buying online, and with which companies Facebook has a marketing relationship with. Beacon was developed so it would be used as a word-of-mouth marketing tool.
Responding to criticism about Beacon, Zuckerberg said this to Stahl: "I actually think [our ads] make it less commercial. What would you rather see? A banner ad from Bloomingdale’s or that one of your friends bought a scarf?"
Even though Zuckerberg apologized about the response from users, Beacon remains running on the social network, and it will continue to. Zuckerberg said he's committed to it and will make it work.
Why I bring this up is to combat the illusion that something can be offered for free to the public. Every time someone does this, eventually their users get riled up because they consider they've been lied to; being promised they won't have to view ads or pay for something. There is no such thing in the world. Somebody has to pay for something being offered, no matter what it is.
If people want to use Facebook or any other website for free, they have to pay for it by viewing ads of some sort. The only other option would be subscriptions. Either way, somebody has to pay.
The question for marketers is whether they should do it upfront or on the backend. What I mean by that should the introduce ad-based websites first, or should they attempt to generate a large amount of traffic before offering them.
The dilemna is you possibly may have to take longer to grow traffic, or you get a backlash once you introduce ads. That's the tradeoff we all face.
Many people thought wrongly that Facebook would continue on like it is with no ads. That was always a pipe dream. Eventually the bills come due, and somebody, somewhere will have to pay. Don't let someone make you think you can offer something for nothing; that has never been a reality.
All the talk of cool and everything being new, as far as it relates to running a business, is nonsense. When reading many things about Zuckerberg and Facebook since it be prominent online, there was the "this is different this time" thing going on. That may have been good for generating traffic and interest, but the costs of running and offering the network to people is growing.
Paying bills is never going to go out of the picture, and investors aren't in it to make you feel good. Neither can we be, no matter how much we wish it was so. That's the reality of the world we live in.
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