Less than a week before Facebook starts its IPO roadshow on Monday, advertisers have started to figure out that Facebook's ad strategy isn't all that strategic. The social network has used its huge 800 million-strong audience to lure advertisers, but these companies want more than the feeling that "engagement," "sponsored posts" and "likes" work. They want metrics and results -- something Facebook can't and doesn't measure. And that's becoming clearer to advertisers, who have started questioning Facebook's ability to bring in customers. This comes at a particularly bad time, since Facebook will seek a $100 billion valuation on Monday, which The Wall Street Journal's Suzanna Vranica and Sayndi Raice say is 33 times their current ad revenue. Ad growth is kind of (very!) important for the overall business. And just when it needs to prove it has a viable business strategy, the very source of that business has doubts.
Facebook has two kinds of frustrated advertisers: those who want metrics and those who want attention. "The question with Facebook and many of the social media sites is, 'What are we getting for our dollars?'" Michael Sprague, vice president of marketing at Kia told Vranica and Raice. "[If] a consumer sees my ad, and does that ultimately lead to a new vehicle sale?" Facebook relies on a "trust me" mentality, luring advertisers with its big, addicted audience. But, these companies have started getting antsy. The more money they pump into this murky "money-maker" the more they want to know what its getting them. "Clients, for the very first time, are starting to question the measurement issue" Martin Sorrell, CEO of WPP, an advertising and marketing firm said at a conference, note Raice and Vranica. "[They] are increasingly starting to look at the value of those investments," he continued. That's a very hard something for Facebook to provide. Ad clicks don't necessarily translate into direct sales.