Social Network Advertising

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

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 ?

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

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

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

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

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)

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

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

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

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?

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

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?

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

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

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?

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)

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

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

What else is out there?

socialvibe
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

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

Questions?

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Social Network Advertising

by hussein_fazal on Dec 11, 2008

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Social Network Advertising — Presentation Transcript