What Does Facebook’s IPO Mean for Education Marketing?
Date posted: May 17, 2012
As you may have heard, Facebook is selling roughly 25% of its shares at $38 per share. This values the company at more than an astounding $100 billion, and makes it one of the highest ever valued IPOs. Question is, what does this mean for Facebook? In the simplest terms, the IPO was a way for the company to generate more capital (close to $18-billion – an amount that is more than four times their revenue for the last year). The flip side to that coin (pun intended), however, is that the company will now be feeling the pressure to justify its valuation, which means having to significantly grow its revenues. As Slate discussed, this will likely mean an increase in the number of ads and the development of new products and services, which is where the extra capital will come into play. This may include:
- New products and services to diversifying its revenue sources. Currently, Facebook makes about 80% of its money from advertising, which means it is susceptible to the cost of ad space. They are currently testing a feature in New Zealand that would let users and brands pay a fee to promote posts. Increased overall capital will likely see the development of other similar ideas.
- Adding advertising to their free mobile services.
- Buying more third-party applications, like they did with Instagram.
With Facebook more focused on making money, we’d likely see the following effects on social media education marketing:
Increased competition: With Facebook trying to aggressively boost its ad revenue, there will be a number of new ways for colleges and universities to reach prospective students (e.g. logout page ads, sponsored stories, etc.). To counter this increased competition colleges and universities will need a well-thought out social media plan, with a lively, frequently updated page. Furthermore, in order to get as many eyeballs as possible, your engaging content may need to work in tandem with Facebook advertising in the future.
Diversifying your social media presence: As mentioned above, Facebook’s newly fattened wallet may likely help them buy other sites and applications (Pinterest seems to be a likely candidate). While the impact of other applications and sites on education marketing may be negligible for the time being, should Facebook bring something like Pinterest into the fold, it will change the dynamics of what is shared on their platform. The content you share, in other words, will have to be more dynamic and varied, encompassing numerous forms (text, video, galleries, art, etc).
The necessity for a larger social media marketing budget: Facebook’s need to increase revenue represents a real opportunity for college marketing departments. Now, more than ever, the social network will be developing new methods for schools and brands to leverage their social media presence, particularly with Facebook’s new groups for schools. However, it seems likely that marketers will soon be investing more resources to their social media presence. Budget accordingly! What effect do you think Facebook’s IPO will have on education marketing?