By Kim Palacios

I know what you’re thinking—we’re about four years late.  Why would we review the viability of the Facebook platform in 2011?  True, it’s been around for awhile, but only recently have we been able to observe the long-term viability of its business model; only now is it possible to make a great guess as to its value to a certain business.

When it started, Facebook was something that young people used, young people who narrowed searches for friends based on their schools.  By now, the user base has grown dramatically and education networks are no longer the primary focus—indeed Baby Boomers the fastest-growing U.S. demographic.  The company has matured its revenue models, with a tested advertising program and a trail of attempted (and abandoned) features.  Growth rates are also decelerating in the U.S. (indicating saturation) while they accelerating in Europe and elsewhere in the world.

So, given what we now know about Facebook features, trends, and results, how can you tell what dividends a Facebook program will yield for your business?  Here are some clues:

Consider a Facebook Program If:

  • Your product is something people rarely buy without consulting friends.  Complete this sentence: “Does anyone know a good….” Dentist? Chiropractor? Realtor?  If your business already thrives on word of mouth referrals, Facebook could be a great fit.
  • Your product or service is tied to image or self-identification.  People like to broadcast their ideals—even religious and political ones, at times—over Facebook.  If your product aligns strongly with something ideological (such as vegetarianism, veganism, or anything with an evangelical following etc.) you may increase your chances of people “Liking” your page or clicking on your ad.
  • Your product holds the ability to impress or plays on human vanity.   People care what other people think and are inclined to “Like” and discuss what will be viewed by others as favorable.  Brands with built-in cachet, or that play in image-boosting industries, can be very successful on Facebook.
  • A lot happens in your business from day to day.  If your business holds events, frequently broadcasts news or information via blog or some other medium, and has a lot of variety and volume to go around, Facebook maintenance could be straightforward and easy.  For example, a wine store that changes its wine bar menu every week, offers monthly classes and sometimes features special wines could easily maintain a Facebook page without having to dedicate resources to creating new content.

Run Screaming from Facebook If:

  • Your product is something people are not willing to discuss in public.  I’ll use a somewhat vulgar, but effective, example to drive this point home: suppose you manufacture a product that alleviates feminine itch.  Most people would not want to broadcast to their friends that they “Like” such a product (which eliminates the potential for organic growth).   Paid advertising is also unlikely to be effective because keywords would rarely appear in context.
  • Your product is B2B.  This is, admittedly, a controversial recommendation.  Still, in our experience, few Facebook users mix business and pleasure.  Unless you are an established authority in the business world with a number of individuals personally interested in what you do (e.g., McKinsey, Standard & Poor’s, Berkshire Hathaway), it will be difficult to cultivate a healthy Facebook following without phenomenal content, and, even then it may be a struggle.  It remains a rarity for individuals to follow companies that don’t offer consumer insights; and though B2B following is possible, this represents a rather small percentage of Facebook membership.
  • You rarely have any news or insights to report.  If your business does not already have a lot to report, maintaining a Facebook presence that appears fresh and relevant to visitors will take a lot of work.  It will force you to create original content where no organic need exists.  For example, a management consulting firm that does confidential work for private clients is not in a position to discuss its work, and would have to commit any Facebook content to the production of original (read: new) content.