The Facebook (IPO) Effect

The whole Facebook IPO "thing" has felt like a roller coaster.  Not so much because of the stock price, but because it's reminding me of the horrible economic fallout from a few years ago ... and all of those ups and downs ... and I'm not alone in feeling this way.

The week before the IPO was pure hype, hoodie and all.  The fact that the opening day price had to be supposedly "propped up" is a bit scary.  The fact that the price fell shortly thereafter and even Mark Zuckerberg supposedly sold some stock is even scarier.  But the feeling that it's yet another example of the "insider" nature of these activities is the most scary.  Most people just don't like that feeling.

I've waited to write about about the IPO because I wanted to see people's reactions first.  Not so much on the story itself, but on Facebook as a brand.  Facebook is tricky because it's not the typical brand or company that goes public.  What exactly are we buying?  What are the brand assets?  The track record in the digital space is not necessarily great when you look over the years, and it's hard to pin down exactly what the brand assets are.

So when activity like this happens, it can seriously damage brand equity.  I hear many people now questioning the validity and long term viability of Facebook (as a brand anyway), which shouldn't really happen with an IPO.  Many are thinking that something new may come along and wipe out Facebook's benefit, and hence the brand.

They may be right.  The only way to avoid that is to constantly improve and add value to your customers' lives.  The Facebook IPO did not leave most people feeling that way.

So is the IPO a reflection on the brand equity of Facebook, or is the Facebook brand equity been affected by the IPO?  My bet is that it's a little bit of both.

What's your experience?  Jim.

Jim Joseph
President, Cohn & Wolfe North America
Author, The Experience Effect series
Professor, NYU

BTW - I had the pleasure of meeting and hearing the author of The Facebook Effect, and I'm staring at his book right now.  Good read, and a fascinating story.