By PETER WYLIE, special to LTW

Editor’s note: Local Tech Wire asked Peter Wylie for his reaction to Facebook’s changes in privacy policy this week. Wylie is a researcher at , a social media marketing company in Raleigh, N.C. He was previously an editor for an online business journalism company in Washington, D.C.

RALEIGH, N.C. – has surpassed 500 million active users worldwide, a simply astonishing achievement for a service started in a Harvard dorm room just over six years ago.

The growth of the company has created a robust network for individuals to make and strengthen connections, as well as a burgeoning marketplace for businesses interested in a new mode of operations and connection with their customers.

But the frantic pace of growth has come at some cost. In addition to privacy concerns that boiled over into protests and slowing user growth, the most recent American Customer Survey Index found that customer satisfaction with Facebook is in the bottom 5 percent of all private sector companies. The social networking giant is bottom-dwelling in the customer approval ratings with perennial punching bags like airlines and cable companies.

One of the main causes of the discontent is the advertising that is run on Facebook, which is paradoxical because the advertising provides the revenue that powers the expansion of the service.

Advertising on Facebook offers a rich ability for marketers to target sectors of the gigantic user base by age, location, and even interests. While this ability is very attractive to marketers, they should approach this method with care, given the customer dissatisfaction with that attribute of Facebook.

Engaging customers through the organic means available on Facebook by creating a Fan page for your business and promoting it through people’s network of friends proves to be a more successful way to foster positive business relationships, without the potential drawback of alienating users through advertising. While using Facebook advertising can be very useful in certain situations, making your Facebook presence useful, informative, and interactive yields better returns in the long run.

Have any of you had experience with running Facebook ads and setting up a user community on Facebook as well, to be able to gauge the difference in response levels and user satisfaction?

(c) Three Ships Media

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