At RSR, we talk a lot about the need for retailers to deliver relevant value to consumers. It’s a way of encapsulating why, for example, localization is important, i.e. consumers shouldn’t have to wade through a bunch of irrelevant stuff in order to get to real solutions for their lifestyle needs. It’s also a way to underline how best to interact with the network of potential customers in the digital channels; people are looking for products and services in a particular context (the lifestyle need they are trying to fulfill), and part of that is offering relevant content about solutions and to plug them into a community of people who might have also tried to fulfill the same or similar need.

Enter Facebook. The company’s stated mission is “to give people the power to share and make the world more open and connected “. The company overview states it simply: “Millions of people use Facebook everyday to keep up with friends, upload an unlimited number of photos, share links and videos, and learn more about the people they meet. “

I’m a very “ightweight participant in the social network, using it mostly to keep in touch with distant friends and family. So my need matches their mission and objective. One of the things that FB has really helped me do is to connect with people that I have worked with over the years. I enjoy keeping up with their career and life changes, and once in awhile a Facebook connection results in a real connection over the phone or lunch. One of the things about my friends list is that lots of them are retailers, and retailers shop other retailers — it’s an addiction (c’mon, you all do it!). And nowadays, that means checking out retailers’ social media sites, and liking them if they do something cool.

And that’s where Facebook screws up, and in the process may be alienating consumers from retailers.

The Story about Sponsored Stories

Starting in January, Facebook started a new service called sponsored stories. Here’s how Phil The Engineer explains it in a video: “So sponsored stories, what they do is let advertisers take word-of-mouth recommendations and promote them. So my friend Joe checks into Starbucks, and that will appear on my News Feed … Starbucks can come in and say that they want to promote ‘check-in store locations’, and so when I check on the site, I see that my friend checked into Starbucks (on the screen at the top of a sidebar section entitled Sponsored Stories, an entry with the Starbucks logo shows that Phil’s friend has checked in “for the second time today ” with another friend). Now I can ‘like’ the Starbucks page from that story, and when I ‘like’ that page it creates more organic content. “

The idea is that Starbucks can use the network effect to promote its brand (according to Wikipedia, the network effect is “is the effect that one user of a good or service has on the value of that product to other people “). In other words, if you “like ” something, Facebook advertisers are betting that your friends will “like ” it too. According to the website Techcrunch, “studies have shown sidebar Sponsored Stories have a 46% higher click through rate than traditional ads. ” This is just the kind of thing that can get a marketing executive really excited! Suddenly, you can push your brand out to potentially thousands of new “eyeballs “.

Where’s the Rub?

Here’s where my own Facebook experience comes back in. As mentioned earlier, a lot of my retailer friends “shop ” other retailer websites, and when they see something cool, they “like ” it. Well, one of the things that has shown up again and again as a result on my FB page is Walmart. It’s no secret that Walmart is expending a lot of energy to use its website and social media to promote its brand. And although I have nothing particularly against Walmart, I don’t shop there often (there’s not one as close as my town’s Target, or “Tar-jhay ” as the family calls it). When I first saw that my friend Joe ‘liked ” Walmart, I clicked to “hide ” the sponsored ad, also clicking on the “uninteresting ” reason. Regardless, it turns out that virtually every day, I get a new top-of-sidebar story that Joe likes Walmart .

That little irritant caused me to look around the web, to see what others had to say about this feature (in other words, I was now suddenly searching out the community of disgruntled Facebook users – probably not what the company intended, and not the kind of emotion that Walmart wants to be associated with). It turns out that there are a whole lot of people who aren’t happy. One of them is the UK’s venerable news daily, The Telegraph. In a February 9 op-ed piece, Digital Media Editor Emma Barnett wrote: “We knew when Facebook announced its intention to float last week, that there would become a growing pressure on the site’s founder and chief, Mark Zuckerberg, to ramp up the network’s commercial offering…. However, I didn’t think that I would feel a change to the service so soon. This morning when I clicked on a photo of a friend’s baby on Facebook, next to it, on the left hand side, was a ‘sponsored story’, (read advert) which told me that another chum ‘likes’ the band ‘Stooshe’. I clicked on a different picture of her baby girl playing happily in the snow, and another sponsored story appeared. This time a different friend was ‘liking’ a service called Whipcar. The two don’t mix and having alerted my friend to the fact that her child is now being advertised against, she has since removed the photographs. “

The Washington Post’s Rob Pegararo put it more bluntly in a January 23^rd column: “Your clicks of Facebook’s ‘Like’ button and check-ins at restaurants, stores and other establishments are already valuable marketing material. Now Facebook is letting companies and individuals buy the right to republish those actions to your friends in ads — including your name and profile photo — on the social network’s site. “

Bottom line: it is not easy for Facebook users to control what they “advocate ” in a “sponsored story “, and it’s also not easy to stop the resultant incoming messages from cluttering up your digital screen if you are part of the unwitting advocate’s social network. Can I “unlike ” that? What I did was to contact my FB friend to let him know that his “likes ” of Walmart are proliferating like fleas on a dog. I’ll bet that that’s not exactly the kind of dialogue between friends that Walmart envisioned when they paid Facebook for the privilege.

‘Danger Will Robinson!’

You might remember the 1960s’ American television series Lost in Space. The robot in the series is the guardian of a boy named Will Robinson. When he is unaware of an impending threat, the robot intones, “Danger Will Robinson! “. And that’s just what this story should be doing for retail Chief Marketing Officers. In our December 2011 study entitled Customer Centricity 2.0: The Rise of the Chief Marketing Officer, RSR partners Nikki Baird and Paula Rosenblum pointed out that retailers are moving into virtual channels with investment increases reported in online, mobile, social and search engine advertising. But they also warn that “unless your organization has a strong single owner of the customer experience, it will continue to struggle with the ‘did it work?’ question. That might, at first glance, seem to place too much emphasis on leadership’s role in answering a relatively simple measurement question, but the challenge here isn’t so much about the numbers as it is the strategy and the objectives – and that is very much a leadership question. “

Our research shows that retailers still have to answer some very fundamental questions about the ownership and objectives of a customer-specific strategy. In the meantime, 3^rd parties like Facebook can seem to enhance the effectiveness of the marketing effort while doing just the opposite. Just as the network effect can dramatically enhance the brand’s positive message, it can also do the same on the negative side. And when you’re using players like Facebook, you have no idea how far those messages are being spread. “Danger CMO! “