Social Network Advertising Hussein Fazal [email_address] “ In 2008, if you’re not on a social networking site, you’re not on the Internet.” - IAB Platform Status Report, April 2008

Social Networking - Reach of Web population Source: comScore Inc, Worldwide Feb’08, All Locations, Persons 15+ 53.7% 15,794 29,412 Germany 52.0% 17,583 33,813 France 84.3% 18,181 21,567 Canada 76.7% 25,502 33,249 United Kingdom 66.4% 108,248 163,024 United States 65.4% 538,375 823,203 World-Wide Reach Social Networking (‘000) Internet Users (‘000)

Canada - Continuous Growth

Social Networking goes beyond facebook! Source:ValleyWag, June ‘07

4th most-trafficked website in the world More than 35 translations available on the site, with over 65 in development However, facebook is the largest

4th most-trafficked website in the world

More than 35 translations available on the site, with over 65 in development

Worldwide online advertising spending: $40 Billion Worldwide social networking ad spending: $1 Billion Advertising Budgets While social networking reaches 65% of Internet users only 2.5% of online advertising spending is directed to social networks! WHY ?

Worldwide online advertising spending: $40 Billion

Worldwide social networking ad spending: $1 Billion

Social Network Advertising can be done with small budgets Large brands simply are not sure what to do Large brands are ‘scared’ to lose control Spend just simply hasn’t caught up yet – similar to the transition from traditional advertising to online advertising several years ago There must be a shift in mindset as ROI isn’t as easy to measure WHY? 85% of social media users think that companies should interact with them through this medium – emarketer 40% of users have made a purchase based on advertising found on social networking sites - razorfish

Social Network Advertising can be done with small budgets

Large brands simply are not sure what to do

Large brands are ‘scared’ to lose control

Spend just simply hasn’t caught up yet – similar to the transition from traditional advertising to online advertising several years ago

There must be a shift in mindset as ROI isn’t as easy to measure

Banner Advertising Virtual Gifts Creating a group Creating a Page Building an application Advertising with facebook

Banner Advertising

Virtual Gifts

Creating a group

Creating a Page

Building an application

Right-hand column – CPM or CPC buys CTR of 0.04% Banner advertising w/ facebook

Right-hand column – CPM or CPC buys

CTR of 0.04%

More than 95% of facebook members have used apps Better placement Better CTR Deeper Reach But still, not taking advantage of being on a social network! Banner advertising on applications

More than 95% of facebook members have used apps

Better placement Better CTR

Deeper Reach

But still, not taking advantage of being on a social network!

Users can deliver gifts publicly or privately Virtual gifts are given a high priority on the news feed so they spread far and fast Sponsored Virtual Gifts People buy virtual gifts! (Estimated to provide $3 million in revenues / month for facebook (source: insidefacebook.com)

Users can deliver gifts publicly or privately

Virtual gifts are given a high priority on the news feed so they spread far and fast

People buy virtual gifts! (Estimated to provide $3 million in revenues / month for facebook (source: insidefacebook.com)

Post discussions, photos, videos, links Easy to send updates directly to members facebook inbox Easy for members to invite their friends The group 1,000,000 Strong for Stephen Colbert grew from zero to one million members in 9 days!) Group acts as a ‘Bumper Sticker’ on users profile pages Create a central place for customers, partners, and friends to participate in conversations around your brand Facebook Groups

Post discussions, photos, videos, links

Easy to send updates directly to members facebook inbox

Easy for members to invite their friends

The group 1,000,000 Strong for Stephen Colbert grew from zero to one million members in 9 days!)

Group acts as a ‘Bumper Sticker’ on users profile pages

Create a central place for customers, partners, and friends to participate in conversations around your brand

Message blasting limited to 5,000 people (increased from 1200 as of June 2008) Can be a target for spammers Cannot add custom applications Facebook Groups Drawbacks Groups are good for quick active discussions attracting quick attention BUT if you are looking to build a long-term relationship between your customers and your brand, pages are the way to go

Message blasting limited to 5,000 people (increased from 1200 as of June 2008)

Can be a target for spammers

Cannot add custom applications

Launched in November 2007 – similar to groups BUT: More flexibility to add content incl. facebook applications No limitation to number of fans you can message You can view demo info of your fans – age, gender…. Pages can now have custom flash or HTML (fbml) Users become a ‘fan’ of your page No ads on right hand column Facebook Pages

Launched in November 2007 – similar to groups BUT:

More flexibility to add content incl. facebook applications

No limitation to number of fans you can message

You can view demo info of your fans – age, gender….

Pages can now have custom flash or HTML (fbml)

Users become a ‘fan’ of your page

No ads on right hand column

Facebook Page Example - COKE Coke Page has over 1.2 Million fans! Grown virally from news feed News feed is the holy grail of facebook viral growth!

How do I grow my group/page if I am not Coke? Create a reason for users to become a fan and keep coming back i.e. win prizes by becoming a fan of crest whitestrips Create an area for discussion, not a branded destination Kick off with a banner advertising campaign to build-up initial user base

Gives you an easy way to bring your customers together and opens a ‘long-term’ relationship Must be comfortable with negative chatter about your brand Facebook is committed to continuing to build out the pages functionality BUT – There is a MORE ENGAGING way to communicate with your customers… Build a Custom Application Are pages/groups the answer?

Gives you an easy way to bring your customers together and opens a ‘long-term’ relationship

Must be comfortable with negative chatter about your brand

Facebook is committed to continuing to build out the pages functionality

BUT – There is a MORE ENGAGING way to communicate with your customers…

Build a Custom Application

Apps can offer a specific level of branded engagement whereas pages are generic More control over the holy grail. What is more engaging? “ Hussein became a fan of ABC” “ Hussein challenges you to beat his score in the ABC super contest - Prove Yourself.” Highest level of user engagement Most people join a group/page for the ‘bumper sticker’ and forget about it Custom Applications

Apps can offer a specific level of branded engagement whereas pages are generic

More control over the holy grail. What is more engaging?

“ Hussein became a fan of ABC”

“ Hussein challenges you to beat his score in the ABC super contest - Prove Yourself.”

Highest level of user engagement

Most people join a group/page for the ‘bumper sticker’ and forget about it

Build virality into the core of the application Give users a natural and compelling way to invite others i.e. ‘You scored 1200 – Can your friends do better?’ Take advantage of holy grail (feed) Cost per install campaign with Ad Networks Banner advertising Cheap Incentivized installs Build an application There are over 50k application in the app directory with 140 added per day, so how do I make my app grow?

Build virality into the core of the application

Give users a natural and compelling way to invite others i.e. ‘You scored 1200 – Can your friends do better?’

Take advantage of holy grail (feed)

Cost per install campaign with Ad Networks

Banner advertising

Cheap Incentivized installs

FedEx created “Launch a Package” 300k active users in 6 days because VIRALITY was built in app Branded App Example - FEDEX

FedEx created “Launch a Package”

300k active users in 6 days because VIRALITY was built in app

Reebok created “Talkin’ Crazy” where users could write ‘smack’ on shoes and send to friends Branded App Example - REEBOK

Reebok created “Talkin’ Crazy” where users could write ‘smack’ on shoes and send to friends

Build a page with a reason for users to be a fan Can be used later to message blast your fan base Build an engaging custom application Built in virality is the key Cross promote the two – encourage app users to become fans of your page and fans of your page to install the app Run a banner campaign to get the initial user base With no budget restrictions, what should I do?

Build a page with a reason for users to be a fan

Can be used later to message blast your fan base

Build an engaging custom application

Built in virality is the key

Cross promote the two – encourage app users to become fans of your page and fans of your page to install the app

Run a banner campaign to get the initial user base

Banner advertising used to be only for large brands Enough about facebook – what about myspace? Until October 12 th when they launched ‘myads’ self serve advertising for budgets between $25 - $25,000 Minimum CPC rate of 25 cents Can contain images Advanced targeting options Estimated to provide daily revenues of $160k for myspace already! (source: TechCrunch)

Banner advertising used to be only for large brands

Minimum CPC rate of 25 cents

Can contain images

Advanced targeting options

Estimated to provide daily revenues of $160k for myspace already!

(source: TechCrunch)

myspace has an older demographic facebook has a demographic that reaches people with higher income + more educated facebook has a higher demographic that is African American and Asian. Myspace has a lot more Hispanic users more people are addicted to Myspace (time spent) – skewed due to music users myspace demographics myspace vs facebook

myspace has an older demographic

facebook has a demographic that reaches people with higher income + more educated

facebook has a higher demographic that is African American and Asian. Myspace has a lot more Hispanic users

more people are addicted to Myspace (time spent) – skewed due to music users

Nike Soccer 50,000 fans Watch clips, discuss soccer, links… myspace is a mess! Trailing behind – most examples are from 2006! myspace pages

Nike Soccer

50,000 fans

Watch clips, discuss soccer, links…

myspace is a mess!

Trailing behind – most examples are from 2006!

What else is out there?

socialvibe Users and brands together support causes Can place widget on facebook, myspace, bebo, myyearbook… profile!

Users and brands together support causes

Can place widget on facebook, myspace, bebo, myyearbook… profile!

cyworld Over 90% of South Koreans in their 20’s are on cyworld Cyworld profiles (“minihompy” or mini-homepage) Users can ‘decorate’ their avatar and mini-homepage with branded and non-branded items

Over 90% of South Koreans in their 20’s are on cyworld

Cyworld profiles (“minihompy” or mini-homepage)

Users can ‘decorate’ their avatar and mini-homepage with branded and non-branded items

Social Network Advertising spending – small but growing Opportunity for brands – but must change mindset Facebook is the dominant player Can do a lot for very little $ New industry - lot’s of innovation still to come conclusion

Social Network Advertising spending – small but growing

Opportunity for brands – but must change mindset

Facebook is the dominant player

Can do a lot for very little $

New industry - lot’s of innovation still to come

Questions?