This paper applies the balanced scorecard framework, originally developed by Kaplan and Norton (1993), to Facebook Inc. as a social media corporation. Adapting the conventional four perspectives — financial, customer, internal process, and learning and growth — into a social media context, the analysis examines Facebook's strategic objectives across financial performance, brand management, consumer satisfaction, and innovation. The paper discusses how non-financial metrics such as audience engagement, user growth, and brand sentiment complement financial KPIs, and evaluates Facebook's action plans for revenue generation, mobile advertising, global internet access, and product innovation across platforms including Instagram, WhatsApp, and Messenger.
Kaplan and Norton (1993) introduced the balanced scorecard as a management tool that enables the effective execution of strategies pursued by an organization. The balanced scorecard supports the employment and management of all company activities in harmony with their strategic implications. This is achieved by connecting non-financial organizational activities to fundamental chains tied to the organization's long-term strategy. The balanced scorecard's four perspectives include: the financial perspective, the customer perspective, the internal process perspective, and the learning and growth perspective. The foundation of these different perspectives is grounded in the vision, mission, and strategic objectives of an organization. In the case of Facebook, the strategic objectives include brand management, consumer satisfaction, financial prosperity, growth, and innovation.
Facebook, whose main business operation is social media marketing, must consider the different aspects between financial outcomes and social media growth. By making use of a social media marketing balanced scorecard, it becomes possible to evaluate and assess the diverse short-term and long-term benefits for Facebook Inc. Comparable to the original balanced scorecard by Kaplan and Norton, the social media balanced scorecard portrayed here takes into account metrics from four different perspectives: the financial perspective, the brand perspective, the innovative perspective, and the consumer perspective.
For the financial perspective, Facebook Inc.'s strategic objective is to capitalize on organizational assets, enhance operational productivity, and increase revenue generated in a financial year. Facebook intends to invest in talent and ad-tech investments to generate revenue. In addition, the strategic objective is to attain the 1 billion users landmark for its products and thereafter monetize them through advertising and marketing. For the consumer perspective, Facebook Inc. focuses on developing products that consumers enjoy fervently.
The brand perspective takes into account the existence of positive growth and ascendancy for its product offerings and trademark. Strategic objectives of Facebook Inc. encompass the continuous growth of the company, service provision to its existing communities and businesses, and helping them attain their full potential. Lastly, a key aspect of Facebook Inc.'s innovative strategy is the incessant pursuit of product development and enhancement — placing emphasis on every detail that accompanies the product to the consumer market, including action plans such as the provision of free basic internet services to individuals across the world who lack access to it.
The balanced scorecard is a management tool that facilitates the effective implementation of strategies instigated by an organization. It has been studied extensively in both academic research and practice (Figge, Schaltegger, & Wagner, 2002). By linking non-financial organizational activities with fundamental chains to the organization's long-term strategy, the balanced scorecard supports the appointment and administration of all corporate activities in alignment with their strategic implications. In theory, value-based sustainability management endeavors to take into consideration business offerings and impacts on sustainability in an integrative way (Figge, Schaltegger, & Wagner, 2002). It suggests that for companies to improve sustainable development, it is appropriate to pursue commercial performance improvements across all three dimensions of sustainability — social, economic, and environmental — in a coordinated way.
The balanced scorecard is considered an effective component when it comes to organizational alignment. It can facilitate budget synchronization and management purposes by connecting strategy to administrators and supervisors, offering them a clear direction. Similarly, it can aid executives in supervising strategic advantages and initiatives, and in interconnecting financial activities (Kumari, 2011). The balanced scorecard's dynamic representation of strategic significance facilitates the implementation of strong and effective principles for budget planning. When executing the balanced scorecard, it is important to shift emphasis away from budget-linked intentions toward balanced scorecard-linked intentions, while minimizing the extent of budget elements. Failure to do so will only increase the workload and escalate frustrations (Figge, Schaltegger, & Wagner, 2002).
The concept of the balanced scorecard rests on the premise that the effective use of investment capital is no longer the sole determining factor for competitive advantage. Instead, progressively soft aspects — such as knowledge formation, intellectual capital, and exceptional consumer orientation — have become increasingly significant. The balanced scorecard's four perspectives include: the financial perspective, the customer perspective, the internal process perspective, and the learning and growth perspective.
Timely and accurate financial data are a primary concern for most organizations. In the contemporary information age, organizations have more than sufficient resources to facilitate the processing of financial data. Through access to corporate databases, organizations can systematize and integrate their data processing. It may also be essential to incorporate additional financial data, risk assessment, and cost-benefit analysis into this perspective (Kaplan and Norton, 1993).
Contemporary management thinking has increasingly recognized the importance of satisfying consumer needs across all business organizations. Such metrics are justified by the reality that if consumers are not satisfied with the products and services rendered by a particular organization, they will ultimately shift to another provider. Poor implementation of this perspective may result in the future deterioration of the company (Kaplan and Norton, 1993).
Measures centered on the internal business process perspective enable managers to understand how effectively their business is functioning and whether the organization's products and services align with consumer expectations. According to Kaplan and Norton (1993), these measures ought to be carefully considered by those with the most knowledge of such practices.
This perspective relates to enhancements in organizational culture and employee development through teaching and training. In a rapidly changing technological environment, it is essential for knowledge-based employees to be continuously involved in the learning process. Measures can be introduced to direct management toward investing in teaching and training programs. Growth and innovation encompass the vital success factors for any knowledge-based organization (Kaplan and Norton, 1993).
The basis of the different perspectives of the balanced scorecard is grounded in the vision, mission, and strategic objectives of Facebook as an organization, with individual custom metrics and targets. Facebook Inc.'s strategic objectives are: customer satisfaction, continuous innovation, increase in revenue generated, and Facebook brand management.
Vision: "People use Facebook to stay connected with friends and family, discover what's going on in the world, and share and express what matters to them."
Mission: Facebook's mission is to give people the power to share and make the world more open and connected.
The following table summarizes the balanced scorecard of Facebook Inc., taking into account its four perspectives, strategy objectives, measures, key performance indicators (KPIs), and benchmarks.
Facebook Brand Management — Strategy objective: Nurture and raise dialogue about Facebook. Measures: Voice sharing, audience engagement, conversation reach. KPI benchmarks: 20% of conversations eliminated per period on the brand/campaign; reach approximately 70% of the two-thirds without internet.
Consumer Satisfaction — Strategy objective: Guarantee customer satisfaction and promote advocacy. Measures: Active advocates, influential advocates, impact-making advocacy. KPI benchmarks: 10% of fans are active brand ambassadors (reporting, liking, commenting, and sharing 10 times per week across Wall, Twitter, and own blog); 10% of fans reached by brand ambassador; top 10% of fans are brand ambassadors activated for conversion.
Further Innovation — Strategy objective: Spur innovation. Measures: Topic trends, sentiment ratio, impact of ideas. KPI benchmarks: Top 10 in the ranking of topics discussed per week; ratio of non-negative contributions and comments relative to total number published; ratio of interactions due to new product idea diffusion relative to total brand interactions.
Financial Perspective — Strategy objective: Maximize shareholder equity. Measures: ROI, augmentation in returns and revenue, increase in brand advertising consumers. KPI benchmarks: Monetize company products such as Instagram, Messenger, WhatsApp, and Facebook; assist brands to measure online-to-offline sales conversions; enhance the marketing and advertising user experience for different brands; provide proper tools for advertisers to expand marketing on the mobile platform.
In recent times, there has been a sustained increase in investment in online marketing, with many marketing managers abandoning traditional media in favor of mobile and social media channels such as Facebook. Irrespective of the enthusiasm surrounding Facebook as a marketing channel, executives face the challenge of measuring its effectiveness and ascertaining its efficacy relative to other online marketing activities (Fiege, 2010). According to Fiege (2010), it is particularly challenging to measure the reach and influence of social media and to determine marketing impact with regard to key metrics such as consumer satisfaction, revenue, and conversion events. This results in marketing budget allocation decisions that are frequently made from the center outward to different channels, producing a sub-optimal marketing mix. It is for this reason that this paper uses a social media balanced scorecard to demonstrate how organizational and marketing goals can be translated into quantifiable operational objectives, and how performance measurement of marketing activities on Facebook can be executed.
Facebook, whose main business operation is social media marketing, must consider the different aspects between financial outcomes and social media growth. For instance, the number of Facebook users, the growth of active social media communities, site visits, and positive ratings cannot be classified as financial assets, as they appear on neither the income statement nor the balance sheet. However, these metrics are not without value. Rather, they are prominent indicators that reflect the positive way in which the brand is operating to generate value, and can produce financial outcomes in future periods (Ray, 2010). By making use of a social media marketing balanced scorecard, it becomes possible to evaluate and assess the diverse short-term and long-term benefits for Facebook Inc. — both financial and non-financial. This approach provides numerous benefits, such as aligning measurement across all company objectives rather than solely sales, providing a means of achieving consensus among various stakeholders, and avoiding short-term gains at the expense of long-term brand health (Ray, 2010).
Similar to the conventional balanced scorecard, the social media balanced scorecard portrayed here takes into account metrics from four different perspectives: the financial perspective, the brand perspective, the innovative perspective, and the consumer perspective. The financial perspective examines whether revenue has increased or costs have decreased. The growth and innovation perspective considers whether the company is enhancing its digital assets — products such as Instagram, Messenger, and WhatsApp. The consumer perspective examines whether the consumer base and target market are satisfied with the products and services rendered. The brand perspective takes into account how consumers perceive the company's brand and whether that perception has improved or worsened (Ray, 2010).
With respect to the financial perspective, the main strategic objective is to maximize company assets, increase fiscal revenue generated, and improve operating efficiency. According to Shontell (2014), the action plan Facebook Inc. intends to implement involves undertaking a series of aggressive talent and ad-tech investments that would position the company for a successful future (Malgwi and Dagiru, 2014). However, one financial concern is that this strategy could cause the company's expenses in the following year to increase by as much as 70% (Shontell, 2014). In particular, Zuckerberg's main action plan over the next five years is to have multiple products — such as WhatsApp, Messenger, Search, Video, NewsFeed, Oculus, and Instagram — each attain a user base of 1 billion. Once this is achieved, the company plans to begin aggressively monetizing these products to generate increased revenues (Shontell, 2014).
In addition, Facebook Inc. plans to enhance the marketing and advertising user experience for different brands, particularly on the mobile platform. The company will invest in improved targeting and the ability to measure ad campaigns through data. Facebook Inc. also plans to assist brands in measuring their online-to-offline sales conversions — an area they have not yet successfully addressed. At present, advertisers on Facebook spend approximately 11% of their budget on mobile, owing to the absence of proper tools. The company intends to improve this figure in order to generate more revenue (Shontell, 2014).
Another aspect relating to audience engagement is Facebook Inc.'s investment in video on its social media platform. In a recent financial quarter, Facebook declared a new landmark for video, attaining one billion video views in a single day. Moreover, during the ice bucket challenge, Facebook instigated more than ten billion video views by nearly half a billion individuals. This is a sign not only of the extent of audience engagement but also of how significantly the company's video product has advanced (Shontell, 2014).
"User satisfaction, mobile leadership, and brand trust"
"Audience engagement and global brand growth strategy"
"Product development, internet access, and Instagram growth"
This research report undertakes a critical analysis of Facebook Inc., a United States-based worldwide corporation that develops social media products and services, placing emphasis on the four perspectives of the balanced scorecard: financial, growth (innovative), brand, and consumer satisfaction. The balanced scorecard employed in the analysis is an adaptation of the strategic planning, management, and performance measurement framework originally designed by Kaplan and Norton (1993) and widely employed by numerous companies across the globe. By making use of a social media marketing balanced scorecard, it becomes possible to evaluate and assess the diverse short-term and long-term benefits for Facebook Inc. (Fiege, 2010). This balanced scorecard analysis presents a social media balanced scorecard that takes into account metrics from four different perspectives: the financial perspective, the brand perspective, the innovative perspective, and the consumer perspective.
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