Facebook announced their Q2 earnings this evening at 5:00pm, New York time, via conference call with shareholders.  The social media firm was expected to announce earnings of $0.12 per share on revenues of $1.16 billion.  Facebook announced earnings of $0.12 per share on revenues of $1.18 billion which was in-line with analysts’ expectations, however their stock price is down more than 11 percent in after-hours trading.

Kenneth Wisnefski, founder and CEO of WebiMax, visited with Bloomberg today and spoke with Mark Crumpton, on his show The Bottom Line.  Wisnefski, a social media expert and serial web entrepreneur, told Crumpton “Facebook’s growth is slowing down and investors are meeting it with a lot of distrust at this point.”

Facebook spent approximately $1.93 billion during the quarter, as the company continues to invest heavily in recruiting key talent, research and development, and reinvesting in current technology.  As of today, the company employs slightly less than 4,000 employees.

“There is a lot of concern with advertisers right now that they are not seeing the type of return that they would like to see from Facebook,” states Wisnefski.  “Advertisers have thus started to shy away from it.”

Facebook indicated that advertising revenue accounts for 85 percent of overall revenues.

While Q2 was in line with analysts’ expectations, investors were looking for more from Facebook, including a significant increase in revenues and earnings per share.  The in-line results have sent the stock to an all new low since going public in March.

Wisnefski argues that Q3 should be a profitable and successful quarter as there are multiple products the company is rolling out that has not had enough time to mature at this point.

“Facebook launched mobile ads this quarter and are still in the introduction phase of the product life-cycle,” states Wisnefski.  “Sponsored Stories (as they are labeled), are posts and other actions by brands and consumers that are promoted by a brand.  Sponsored Stories have been effective to this point, as they have a click-through rate of 1.14 percent, almost double the rate of .59 percent for ads in the news feed of desktop users.  In addition, the click-through rate for Sponsored Stories was 53 percent higher than standard ads.”

Facebook faces significant challenges ahead, none more than convincing marketers and advertisers that advertising on the social media platform has its benefits and generates a return for advertisers.

Wisnefski concluded his conversation with Crumpton with the following thought “I think Q3 stands to be better than Q2, as now the company is in position to start showing some value.”

MOUNT LAUREL, NJ — (July 24, 2012) – The egregious developments that have been unfolding in the Penn State scandal have all in society watching in great sympathy for the victims of the cases, but alongside these individuals and their struggle, is the fight for all those not responsible at the university that are now charged with rebuilding the school’s reputation as a quality institution.  Kenneth Wisnefski, founder and CEO of WebiMax announced “there is a dynamic shift in the way a brand-reputation is more susceptible in the digital world”, and furthermore declares “crisis communications techniques have made major strides in becoming a digital format.”

This tragic Penn State case is another example in a long line that brings to light how brands, and their large affiliations, can be negatively impacted to a great degree by the actions of a small number. In this case, most throughout their entire community including alumni, affiliations, athletes, as well as current and future students were not involved but will be impacted by the University’s tarnished reputation.

“Now with the evolution of technology, instant communication, mobile, social media, and the 24-hour news cycle” states Wisnefski,  “brands of universities, businesses, celebrities, and other entities are more vulnerable to lasting damage than ever before.”

With Penn State, those involved within the scandal made decisions that continue to have devastating effects on many people as well as the image of the university.

“One of the major problems that are evident by the University’s response is that current officials have not taken a fully transparent approach and have not been as proactive in their management of the institution’s image and reputation as they could be,” states Wisnefski.

As the amount of these cases continues to occur, Wisnefski sees a call to action for executives and marketers alike to pay greater attention to taking a more proactive brand management approach starting from the top.  They must realize that there is a message in all decisions and actions taken, and a pre-emptive brand strategy forces executives to make the right decisions based on ethics first and the message that their action or inaction will send as a result.
“Those in the public eye must have this realistic understanding, that is, the best way to conduct your business and control image. But when crises do happen, there needs to be reputation control through open communications and a proactive approach,” states Wisnefski.

As Wisnefski declares crisis communications plans are making a shift from traditional response techniques to a digital format, social media plays the more significant role in modern-day crisis communications strategies.  A recent press release by Gartner, Inc., states that by 2015, 75% of organizations with business continuity management (BCM) programs will include social media services in their crisis communications plans.

Facebook declared during the IPO that over 20 billion minutes are spent on the social media profile each day by their 900+ million user base.

“The difference we are seeing with Penn State University is they are not engaging their community of over 270,000 Facebook followers and 44,000 Twitter followers in their response techniques,” states Wisnefski.  “They seem to be operating under an older crisis communications model that does not incorporate the use of social media and other digital components.”

However, Wisnefski also states that it is the careful planning and preventative measures that need to be in place in order to hedge against such damaging blows to a brand’s reputation.

“Furthermore, we have seen the majority of branding professionals not plan effectively and choose not to add a social media component to the crisis communications plans until such an unfortunate event takes place, and it is too late,” concludes Wisnefski.

It is in the planning states that branding professionals and marketers need to incorporate social media into their plans, as the landscape moves from a traditional to digital format.

Less than 2 months after Facebook’s botched IPO, the social media titan seems to “want” to make a comeback and win over investors once again.  The company is developing a “want” button, aimed at creating a virtual wish-list for their 900+ million users.  Additionally, General Motors, who ended their Facebook paid advertising campaign due to unimpressive results, is in talks to resume their paid advertising campaign worth a reported $10 million annually.

Last week, I had the pleasure of visiting with FOX News and discussed the chance that Facebook is making a return to the credibility it once had.

A few notable points stick out to me:

Development of the “Want” Button:  Industry experts have found in Facebook’s sourcecode a new button, titled “want”.  This button is comparable to their “like” button that is current, however this time, it gives consumers the ability to express their intention with a product or brand.  I like this for Facebook.  As I state in the interview, this takes some of the work away from investing in market research, and almost allows companies to have their own research conducted through the social network.  Imagine you are a television manufacturer and hundreds of thousands of people click the want button, you will immediately see what type of ROI you can expect to make on this particular product.

Facebook Jobs Board: Facebook is in a very strong position to launch a sort of “jobs board” that would directly compete with LinkedIn, Monster, and CareerBuilder. Consider this: Facebook stated during their IPO that users spend an average of 10.5 billion total minutes per day on the platform.  Small businesses (who already have a follower-base on Facebook) can post jobs and disengage from Monster and CareerBuilder, and ultimately save costs from posting on these career websites.  Facebook certainly has the reach needed to market this service with over 900+ million global users.

These developments and anticipated announcements all point to a possible Facebook comeback.  Already, the firm is more than 20% above their low since having gone public.

MOUNT LAUREL, NJ — (June 20, 2012) – Kenneth Wisnefski, founder and CEO of WebiMax, announced the addition of SEO industry expert Bill Slawski (Virginia Beach, VA) to the WebiMax team.  Mr. Slawski joins WebiMax as a senior-level consultant and brings with him over 15 years of experience in the search engine optimization industry.

“I am delighted to announce the addition of Bill Slawski to the WebiMax Team” said Wisnefski.  “Mr. Slawski is well-regarded as an expert in our industry and has developed a professional reputation in search engine theory and innovation since the mid-1990s.  WebiMax is continuously referred to as the leader in our industry and we continue to reinvest our resources to expanding our operations and adding key personnel including Mr. Slawski.”

Bill Slawski is the owner and operator of SEO by the Sea, a leading online resource for industry news, announcements, and statistics.  Mr. Slawski covers Google, Inc. and other related industry movers.  He successfully predicted the launch of Google Plus, a social networking site launched by Google in November of 2011.

“SEO has been evolving and growing over the past few years in directions that point towards the search engines looking at new signals such as authorship markup and reputation and trust scores for authors on the Web,” states Slawski.  “Both Google and Bing are also looking to show us a more semantic web, with new knowledge base displays and results.”

Mr. Slawski announced his acceptance in a company email.

“I started promoting websites in 1996, and have been carefully tracking and analyzing patents and white- papers from the search engines for a few years at my site SEO by the Sea. I’m excited about joining WebiMax and have a team to work with that’s as excited as I am in meeting some of these new challenges the search engines are bringing to us.”

About WebiMax:
Led by serial web entrepreneur Ken Wisnefski, WebiMax has established themselves as a global leader in SEO, E-commerce solutions, social media, web design, pay-per-click management and reputation management.  The company was voted one of America’s Most Promising Companies (2011) by Forbes Magazine and recently awarded one of Philadelphia’s Fastest Growing Companies (2012 and 2011) by the Philadelphia Business Journal.  WebiMax employs over 150 personnel in 12 offices including 8 U.S. based, and 4 International. Visit http://www.webimax.com/ for more information.

MOUNT LAUREL, NJ — (May 31, 2012) – WebiMax, a leading online marketing firm, will host a Webinar on June 5, 2012 at 2:00pm EST discussing the recent Google Penguin data refresh and the future of online marketing.  Seats are still open although they are filling fast.

“I am pleased to announce we currently have over 500 registrants for our webinar” said Kenneth Wisnefski, who founded WebiMax in 2008.  “Our team of experts will discuss the update in addition to offering tips for recovery and speak toward the future of online marketing.”

The panel will include Kenneth Wisnefski, founder and CEO, Todd Bailey, Vice President of Marketing and Digital Strategy, Michael Stricker, Director of SMO, and Chris Countey, Director of SEO Strategy at WebiMax.

Google, Inc., who maintains 66.4% of the U.S. search engine market share (according to comScore), released a major algorithm update titled “Penguin” on April 24 impacting 3% of all search queries.  Their intention is to target search engine spammers and black-hat SEO tactics.

“The most common problem we are observing in the community is that there is a significant amount of marketers and advertisers who are unaware of the update and how their site has been affected” states Todd Bailey.  “The fact is, Google updates their search algorithm over 50 times a month and many marketers lack the resources to stay up to date with the intense amount of changes.”

Bailey also states that “no WebiMax clients suffered from the Penguin as a direct result of our efforts”, and furthers “WebiMax has a mass amount of resources in-house and are helping over 75 new clients acquired in the past month after they were negatively impacted by the update in late April.”

“The Penguin update may be the single most important change Google has made to its search engine in the history of online marketing,” states Chris Countey.  “They [Google] are looking for very specific types of links, some that companies are not even aware they have in their portfolio.”

With over 12 million U.S. searches conducted on Google last month alone, approximately 360,000 search queries were impacted.  Such characteristics, including excessive links from low quality websites, unnatural links to increase PageRank for a specific keyword, and high keyword density, were targeted, amongst others.

At the time in which the Penguin update was officially released, Michael Stricker contends that many webmasters were unaware of it.

“We are distressed that many responsible webmasters and online business operators have suffered from Penguin and don’t even know where to turn for help, how to identify the precise issues, what to do to fix their problems or how to build new traffic streams to transcend future updates,” states Michael Stricker.  “Therefore many missed the warning about their significant drop in organic search engine traffic as a result of the Penguin algorithm update.”

Registration is open until 2:00pm EST on June 5 and individuals can register here.

Since coming online in 2004, Facebook has risen to the top of the social media landscape and asserted itself as the essential platform for connecting with people over the internet. Now, with over 900 million users, it is extremely popular and being used at an increasing rate as a marketing and advertising platform for businesses across all industries. Although, there is considerable worth for businesses on the platform, the value of it for these specific purposes varies greatly.

Within marketing, Facebook is excellent for branding, engagement, and growing reach, but with advertising it is not so cut and dry. Advertising on Facebook is great for some brands but it simply does not give adequate ROI for many others as evidenced by the timely withdrawal of General Motors’ (GM) advertising efforts on the platform. This is the essential point of the company’s disappointing IPO. The company has assumed an advertising-focused business model to capitalize on their massive stores of personal information in order to generate their revenue, but the nature of advertising on the platform cannot support the valuation that was seen in the run-up to the launch.

For a company that generates 82% of its revenue from advertising (first quarter 2012 figures), Facebook’s advertising model needs to be more robust across the board for it to be the sustainable long-term income generator that the initial valuation positioned it to be. The reality is their advertising model does not reflect this as the average quarterly revenue per user is only $1.21, compared to AOL’s $2.39, and Google’s $7.14. With that said Facebook will have value and indeed make money, but the significant variance in advertising ROI is the primary element that will prohibit them from generating the kind of advertising revenue that would justify their desired value.

Additionally, the very climate that gave legs to Facebook’s growth is also a threat to its long-term viability. Online social behavior is very dynamic and there is inherent vulnerability in Facebook’s product – its user experience. Facebook is built on user behavior and the experience they have with the site, and there is no guarantee that current positive behavior will continue. If behavior changes negatively over time and users engage with each other less or spend less time on the platform (as has been experienced in Australia), the value of ads will drop and the company’s worth will be degraded. Such “Facebook fatigue” has been seen in pockets already and there is potential for more of this in the future.

Similarly, the social media industry is constantly evolving in terms of what users want, what is possible, and the inevitable competition that arises. With advances in all facets of technology growing so quickly, from the functionality of the standard web, to mobile devices and smart TV’s, the way users engage with social media and what they look for will undoubtedly change. In this process, it is possible for strong Facebook competitors to arise offering something new and different, two elements that gave life to Facebook early on. What gives Facebook its strength is its popularity and user-base size, but these numbers are not set in stone as their competition increases. The recent rise of Pinterest, which recently became the fastest standalone website to surpass 10 million visitors-per-month, is a firm example of such competition as it offers something very different than what Facebook delivers.  The argument is not that Pinterest, or others, will directly overtake Facebook but that Pinterest and other news platforms will steal time spent on social media away from Facebook, devaluing its revenue-generating ads.

Facebook certainly has a future, but it is likely not anywhere near as bright in financial terms as the build-up to its IPO would lead us to believe. Those looking to market themselves and gain exposure by engaging with customers on the platform, do so purposefully as there is significant return for the relative cost. For advertising, though, businesses should evaluate if it is the right option for them based on the products they sell and the type of conversions they are looking for. In the end, the future direction of Facebook depends on their ability to respond to changes in the social landscape as well as improve their advertising offerings and larger revenue generation model, a tall task given the discussed inherent challenges.