Will Facebook replace company Web sites?

LONDON--A day might be coming when the power of Facebook means that major companies no longer bother with their own Web sites.

That was the startling if self-promotional possibility sketched out by Stephen Haines, commercial director of Facebook's U.K. operation, while speaking today at the Technology for Marketing and Advertising conference here. Essentially, Haines argued, companies' interactions with their customers could take place so often on Facebook that company Web sites would fall by the wayside.

To bolster his argument, Haines showed statistics comparing how many times Facebook users have clicked a company's "like" button with how many times per month people visited that company's Web site. For Starbucks, a top Facebook advertiser, the ratio was 21.1 million likes to 1.8 million site visitors. For Coca-Cola, it's 20.5 million compared with 270,000; for Oreo, 10.1 million compared with 290,000; and for Dr. Pepper, it's 4.1 million compared with 325,000.

It's no surprise to hear that Facebook, trying to convert its social-networking dominance into corresponding popularity with advertisers, likes a future in which it's the hub of commercial activity. In a sign that bodes well for that ambition, Haines' talk drew an overflowing crowd of marketers eager for any tips on how they, too, can capitalize on Facebook usage. In the U.K., millions of Facebook users spend an average of 28 minutes per day on the site, Haines said.

His idea isn't totally outrageous. After all, plenty of individuals and companies rely on existing online services rather than building everything from scratch. At the individual level, tools such as Google's Blogger or Yahoo's Flickr are easier to set up than a custom-built blog or photo-sharing site. Facebook interactions let companies tap into a wealth of customer information and a communication channel, and there's no need to coax a user to set up yet another username and password.

But the prospect of Facebook becoming powerful enough to make a sort of parallel Web inside its own walled garden is also no doubt fearful in some ways. Sure, the social-networking site is embedded increasingly deeply into people's lives, but relying on it for customer communications means subordinating a key part of a businesses' operations to a middleman that has shown no shortage of ambition. Many companies are happy to use Microsoft products and Google services, but companies and antitrust regulators get antsy when too much power is concentrated in one corporation's hands.

There's also the possibility that Facebook users, not just companies, might get cold feet. Thus far the site has continued to attract members despite controversies over privacy and other matters, but it's possible the company might go too far.

It's music to marketers' ears to hear Haines say Facebook's targeting tools can tell companies exactly who are the "22-year-olds in Surrey who like football and cricket." But Facebook users might not find it so melodic when finding out that companies, not just their friends, have a keen interest in what favorites they list on their profile.

Even if Facebook doesn't somehow supplant lots of Web sites, though, there's no denying the social network is becoming more important to marketing, and it's adapting to the idea.

Facebook has a variety of tools available to marketers:

• Ways to offer free samples to customers, something ketchup maker Heinz has used.

• The ability to attract the attention of smartphone users making local check-ins. Clothing retailer The Gap gave away 10,000 pairs of jeans to the first 10,000 customers to use the Facebook local check-in service, and Mazda sold 100 cars--exceeding expectations--with a 20-percent-off offer at five U.K. auto dealerships, Haines said.

• The ability to build e-commerce sites into Facebook pages. Max Factor didn't want to lose visitors to its Facebook page to another site when customers were ready to buy something, so a partnership with Amazon lets the customers buy products without leaving.

• "Reach block" ads that change as many as five times in a 24-hour period to send a sequence of ad messages to Facebook users.

• Surveys that let companies try to engage customers in company decisions. Vitaminwater used voting, among other mechanisms, to generate 1.3 million "connections" with possible customers during its "find a new flavor" marketing campaign.

• Applications built atop Facebook's interface that let companies create custom-made interactive programs.

On top of that, Facebook is experimenting with new ideas. One is "newsfeed story ads," in which commentary that ordinarily would appear as updates in a Facebook user's news feed appears in advertisements, too. Another is "application social context ads," in which an app can show a user which of his or her contacts also is using it.

Regardless of the extent to which Facebook actually replaces in-house Web sites, Facebook as a marketing channel isn't for everybody. Naturally, Haines had plenty of examples of companies that have benefited from Facebook's marketing potential, but he also had cautions for those thinking of using Facebook seriously in this way.

First, be prepared for a long-term commitment to keep a site on Facebook lively.

"If it doesn't change, it's probably not worth dabbling" with a Facebook site, Haines said. For a social-networking site to be useful in marketing, it's got to "stimulate" the customers, he said.

Second, plan to respond to very public criticism.

"If you ignore [criticism], it's the worst thing you can do," he said. "Be prepared for it, because it will happen."

Ideally, good responses can turn critics into fans, though.

Third, companies should be judicious about the fine line between engaging customers and annoying them. One company, which Haines didn't name, had 200,000 people liking its page.

"They sent sent seven messages a day," he said. "Their fan base dropped off."