"Facebook and Twitter have users. The only customers in the equation are the advertisers. They have no idea how much their users are willing to pay and they have no idea how much their users are worth. They price ads based on what must amount to voodoo projections of their operation costs and a blind balancing act of signal-to-noise."
Are you referring to advertisers or the social networks with your comment about "voodoo projections"? For many advertisers, yes, it is very hard to pin down a proper value for acquisition through any digital channel except in certain direct response cases. With advanced attribution technology though, it is increasingly possible to dial in the proper mix of channels needed to maximize certain targets (conversion volume, revenue, efficiency, profit, etc.).
The fact that marketers also struggle to pin down a value means that there is literally no price discovery mechanism for these social media products. What a nightmare...
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Are you referring to advertisers or the social networks with your comment about "voodoo projections"? For many advertisers, yes, it is very hard to pin down a proper value for acquisition through any digital channel except in certain direct response cases. With advanced attribution technology though, it is increasingly possible to dial in the proper mix of channels needed to maximize certain targets (conversion volume, revenue, efficiency, profit, etc.).
I was referring to the social networks.
The fact that marketers also struggle to pin down a value means that there is literally no price discovery mechanism for these social media products. What a nightmare...