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May 16

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Facebook Faces Challenges According to a New Poll

Days before Facebook’s initial public offering, a survey of the general population gives a sobering view of what Facebook needs to justify its market value.

The poll was sponsored by the Associated Press and CNBC and conducted by GfK Roper between May 3rd and 7th of 2012.  It was a random phone survey of 1004 adults with a margin of error for the total sample of +/- 3.9% at the 95% confidence level.

To start with, a bare majority of 51% of respondents had a favorable (either ‘strongly favorable’ or ‘somewhat favorable’) view of Facebook.  That is well below the 71% favorable ratings these respondents gave to Google, Apple, and Microsoft, although it did beat the 27% favorable impression of Twitter.  Twitter seemed to straddle the middle ground, with a high 28% of responses that were neither favorable nor unfavorable.  On the total unfavorable side, Twitter and Facebook had 27% and 23% unfavorable responses (for both, 13% of those were ‘strongly unfavorable’).  By comparison the gold plated tech brands of Google and Apple were both at 8% total unfavorable, including 4% ‘strongly unfavorable’.  Microsoft did slightly better with 7% total unfavorable, including 3% ‘strongly unfavorable’.

The message is that Facebook is in great shape if it considers Twitter its primary competition.  If it’s planning on winning consumers for new services from heavyweights like Google, Apple or Microsoft, it has a considerable task ahead.

Even more troubling is the frequent impression that Facebook is a fad.  When asked if they thought that Facebook  was likely to “continue to be a successful company over the long term” or “fade away as new things come along” 46% agreed with the fading away comment, with 43% expecting long term success.

Of extra interest was that 56% of the respondents said that they had a Facebook page…higher than the commonly quoted figure of 40% of the general population being Facebook users.  Tantalizingly absent from the report were cross-tabs of this figure with the other responses, but it would be mathematically impossible for there not to be a portion of Facebook users who regard the company unfavorably and/or think that it is a fad.

Some insight into Facebook’s potential can be gleaned by questions posed only to the subset of Facebook users. When asked how much they trusted Facebook to keep their personal information private, they were given the choices of ‘Completely’, ‘A lot’, ‘A moderate amount’, ‘Only a little’ and ‘Not at all’.  The most frequent answer at 30% was ‘Not at all’!  That was closely followed by ‘Only a Little’ at 29% and ‘A moderate amount’ at 28%.  Just 6% of Facebook users said that they trusted the company with their personal data ‘Completely’.

The results were even dimmer when the Facebook users were asked “How safe would you feel making purchases of goods and services like clothing or travel through Facebook?”, with the choices of “Extremely safe’, ‘Very safe’, ‘Somewhat safe’, or ‘Not at all safe’.  The biggest response by a substantial margin was ‘Not at all safe’ at 35%.  A mere 2% of Facebook users said they would feel ‘Extremely safe’ using Facebook for e-commerce.  I may have just heard the sound of Amazon.com management howling in laughter.

This is significant because many of the most common scenarios for Facebook continuing the pace of revenue growth that would justify the high P/E ratios of its IPO involve having Facebook evolve into a personal portal for services such as banking and/or sell things more valuable than Farmville credits.  This survey shows that Facebook faces a huge challenge in improving its reputation in general and its trustworthiness in particular in order to make either of those happen.

 

About the author

Daniel Nolte

Architect, Network Administrator, Computer Forensics Administrator, Voiceovers. website,

Permanent link to this article: http://betweenthenumbers.net/2012/05/facebook-faces-challenges-according-to-a-new-poll/

1 comment

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