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Marketing Analysis on Facebook - Assignment Example

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Facebook operates in a marketplace those transverse physical and geographic borders. The pervasive nature of the Internet ensures that a vast audience is available for social networking sites and other online business models…
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Marketing Analysis on Facebook
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Marketing Analysis on Facebook

While the social networking sites are predominantly driven by individual actions as people are more or less free to use the platforms as they like. However, in some countries, the political environment is closed and the governments do not want people to interact freely on the social networking sites. There are clashes between the ideals of personal freedom and liberty of speech and local political and legal restrictions. China makes an excellent example for this issue, where the government monitors Internet activity of its citizens and also does not hesitate in hacking the social networking accounts or personal search data. While this is an extreme case, the difference in political ideologies across different countries does impact on the profitability and growth of the online organizations, and especially the online social networking organizations like Facebook. In addition, the cyber security laws and cyber privacy laws are different across different countries which make an organization Facebook vulnerable to legal or social problems. While the Facebook model is basically based on the Western concepts of personal freedom and absolute privacy, different regions of the world do not conform to these ideals. As can be seen from the latest statistics, Facebook’s more than half members are now from countries in Asia and Latin America. However, the problems related to legal and political interference are not restricted to the politically closed countries or countries with non-democratically elected governments. There are several instances where European countries like Germany and France have objected to the use of the personal data by Facebook to target advertisements (Simpson, 2012) to the customers as a violation of their countries laws. While competitors like search engines like Google too face similar political legal issues, the concerns are magnified for social networking sites (Harwood, 2009). This is because, the account holders on the social networking sites are not really looking for buying or selling something as their primary objective (which may be the case with a large number of users on search engines), and keeping in touch with friends and acquaintances is all that they desire. The invasion of privacy in the case of social networking sites is more acutely felt than it is on the search Engines, and hence the political and legal ramifications are more intense (Cashmore, 2010). Economic Environment The business models of online organizations, be it the search engines or the social networking sites, differ from the brick and mortar businesses and this implies that the revenues and growth models in the Internet sector too is different (Cashmore, 2010).The social networking models are largely dependent on their large loyal customer bases to attract advertisers. Another way of remaining competitive is to increase the spend of the individual users. However, the increase in sales or revenues is often offset by the large cost inlays that are needed for the massive scale of operations (Keatin, 2012). The costs are associated largely with capacity building and obtaining more applications to attract more spend per user. So, while the social networking model has the potential to scale up quickly and generate large revenues, ... Read More
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