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How facebook changed advertising

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  • NewsCorp buys MySpace 2005 for $580 million; Zuckerberg started FB 2004
  • YouTube – sec 2:45
  • FB would be 3 rd largest country after China and India – bigger than US
  • Average user has 130 friends 1/14 people in the world use FB
  • Minute 1:32 Unique – from TV ad campaign to Facebook pages to TV appearance http://mashable.com/2010/05/09/betty-white-snl-monologue-video/
  • Great use of social media for product launch: leveraged share a pint, tell a friend, downloadable discount coupon, redirect to their site
  • Authentic
  • Clearly, people like to ‘Like’, and thousands of publishers already reap the benefits – sharing their news and content via the popular social network site. Clearly, people like to ‘Like’, and thousands of publishers already reap the benefits – sharing their news and content via the popular social network site. Read more: Facebook ‘Like’ Button Making an Impact and Publishers Reap the Benefits | The Official Kontera Blog for In Text Advertising http://blog.kontera.com/2010/08/09/facebook-%E2%80%98like%E2%80%99-button-making-an-impact-and-publishers-reap-the-benefits/#ixzz10Yb40PRQ
  • +8* - Plus Eight Star, a consultancy firm, has posted a well-reasoned guestimate of the size of the virtual goods market in China, Korea and Japan: 5 billion USD! – US expected to be $2.5 billion virtual goods by 2013 (Paul Allen)
  • Exercise: How many of you have ever played a game on Facebook? What did you like about the experience? Not like? Any of your family or neighbors playing games on Facebook? How do developers monetize games? Games as lead gen for advertisers
  • This means people who play games can post stories to their Wall without worrying about overwhelming their friends who aren't playing, and people who don't play games won't see irrelevant stories in their feed for which they have no context
  • Next up Mother’s Day…Playfish acquired by EA Tens of thousands of real bouquets accounted for half of the revenue the game generated during this period
  • Likes: Occupation or job, likes – pulls from profile Relationship status Education level
  • Exercise Targeting: Stand up – Male 18-22; Female 18-22; Love Basketball, Love Duke Basketball, Love UNC Tarheels
  • Just getting off the ground – does anyone use Foursquare? Gowalla? Another location based service?
  • A daily record of your life 20 or 30 years ago…
  • Starting to sell Facebook credits at Target

How facebook changed advertising Presentation Transcript

  • 1. How Facebook Changed Advertising Saralyn Bass November 2010
  • 2. Facebook: 2008 Internet mogul Barry Diller elicited laughter at a business conference by dismissing Facebook as "a Princess phone" -- a communications fad Similarly, Rupert Murdoch, whose News Corp. empire includes Facebook rival MySpace, was once quoted as calling Facebook "the flavor of the month" Source: TMC News 6/17/2009
  • 3. Facebook: 2010
    • How is Facebook performing among large brands?
    • Video:
    • http:// www.youtube.com/watch?v =UwOWLEauK8k
    • Barry Diller:
    • “ Facebook’s great advertising. My company, which spends a huge amount on advertising, we spend every nickel we can on Facebook . They’re effective. The targeting of the audience is precise enough.”
  • 4. Who Uses Facebook?
    • What do you use Facebook for? (photos, videos, communicating to all, communicating to one, play games)
    • Who do you add as friends?
    • How much time do you spend on Facebook?
    • Do your parents use Facebook?
    • Do your grandparents use Facebook?
    • Do you pay attention to ads on Facebook?
  • 5. Facebook Growth Valuation: Up from $6.5 billion last year to $25 billion this year Company will generate revenue of over $1 billion in 2010 and become cash flow positive Gavin O’Malley, Media Post, 9/24/2010
  • 6. Facebook Snapshot People on Facebook More than 500 million active users 50% of active users log on to Facebook in any given day People spend over 700 billion minutes per month on Facebook Activity on Facebook More than 30 billion pieces of content (web links, news stories, blog posts, notes, photo albums, etc.) shared each month Global Reach About 70% of Facebook users are outside the United States More than 70 translations available on the site Over 300,000 users helped translate the site through the translations application Platform More than 1 million websites have integrated with Facebook Platform Two-thirds of comScore’s U.S. Top 100 websites and half of comScore’s Global Top 100 websites have integrated with Facebook
  • 7. How Facebook Changed Advertising
    • Fan Engagement
    • Social Shopping
    • ‘ Like’ Button
    • Facebook Connect / Open Graph
    • Games / Virtual Currency
    • Targeted Advertising
    • Geo-Location and What This Means
  • 8. FB Pages: Fan Driven, Interactive = High Engagement
    • From TV Commercial to Facebook to TV Appearance:
      • In January, David Matthews, of San Antonio, launched the Facebook page “Betty White to Host SNL (please?)!" after Ms. White appeared in a popular Super Bowl ad for Snickers candy
      • By mid-March, half million Facebookers had signed on to Matthew's petition
    http://www.youtube.com/watch?v=srD7bEU9MXA
  • 9. Brand Loyalty & Engagement: 16 Million Fans Fan Interaction Seasonal Promotions Charlene Li: Starbucks top in terms of web engagement
  • 10. Polls Engage Users About New Products
  • 11. Starbucks Ice Cream Promotion
    • Integrated all of their touch points
    • From Starbucks ice cream Facebook page you could send a coupon for a free pint of ice cream to a friend
    • . If you tried to send another pint of ice cream, given the option to download a savings coupon for yourself
    • Great use of social media for product launch
    • Giveaways pay on Facebook
    • Recent pastry promotion led to 200,000 new fans in one week
    Tracy Weiss, Thesidenote blog, 7/8/2009
  • 12. Lady Gaga: E-Commerce + Political Activism 5 new show dates and how to get tickets Engaging fans: “Don’t Ask Don’t Tell” Event
  • 13. Facebook Brand Pages
    • More than one-third of folks that like brand pages say they would buy the products more often
    • Brand page fans on Facebook also feel comfortable recommending the brand to friends, with 49 percent of the respondents saying they would "certainly" do so and 43 percent saying they "probably" would
    • Once there, fans expect more than downloadable coupons. Rather, they want to feel more like a VIP who can access exclusive content, information about new products and promotional offers, before the general public can
    Source: a six country study by DDB. Article: Facebook Brand Pages Pay Off, AdWeek, 10/12/2010
  • 14. Why Facebook Ads Work http://www.youtube.com/watch?v=-wHsfeWkXvM
  • 15. Levis: Social Shopping E-Commerce method where shopper’s friends become involved in the shopping experience
  • 16. ‘Like’ Button
    • Levis has ‘Like’ buttons all over its website, making it easy to vote up what you approve and share these recommendations with friends, plus compare how many people have liked certain Levis’ products, side-by-side
    • Within 6 weeks of launch of ‘Like’ button, 100,000 websites had integrated into their backend code
    Nearly 3 billion clicks on Facebook’s ‘Like’ button every single day Ad Age, 10/4/2010
  • 17. ‘Like’ = Sales Source: Advertising Age
  • 18. ‘Like’ Button Evolution
    • ‘ Like’ button now integrated on 1-2 million sites
    • Previously:
      • Users could only ‘Like’ an application as a whole
      • This prevented sharing of specific in-app content like a mini-game, leaderboard, or virtual goods
    • Now:
      • Sites can now display ‘Like’ buttons for Facebook Pages
      • Users can now ‘Like’ specific pages or objects within an application
    • What this means:
      • By liking an in-app object, a feed story will be published linking directly to that object.
      • This means in addition to purchasing a virtual good, a user can ‘Like’ it to show it to their friends.
      • This could have a significant impact on virtual good sales, as well as spreading awareness of virtual goods as a concept.
  • 19. Facebook & Games Justin Smith, Inside Facebook, 1/4/2010 “ 33 million people played a Zynga game yesterday” Mark Pincus, 9/27/10
  • 20. Farmville
    • Facebook putting changes in place so people who don’t play Farmville won’t have to endure Farmville -related posts in their feeds
    • This means people who play games can post stories to their Wall without worrying about overwhelming their friends who aren't playing
    • These feeds act as a form of instant advertising. A form of advertising that has the credibility of a recommendation from the user's social group. This could be very persuasive when you consider that more than half of users will most trust friend and family recommendations, according to a study by Vision Critical
    • Katie Gatto, VatorNews, 9/22/2010
  • 21. Social Media Monetization Consumers have the opportunity to earn or buy virtual currency by completing targeted advertising offers or by purchasing it through direct, global payment options Since its launch in 2007, Offerpal has issued more than 1 trillion virtual points to over 225 million consumers across 190 countries Graph Courtesy of TrialPay
  • 22. Online Games Drive Offline Sales “ We work with TrialPay in a way that benefits users,” said Sebastien de Halleux, Playfish’s COO. “On Valentine’s Day, for example, people could buy real or virtual flowers through our games; that’s a benefit.”
    • Results
    • • 60 million virtual items sold within 2 weeks
    • Sold tens of thousands of real bouquets
    • • 50% of revenue came from a single real world promotion
    Playfish’s annual in-game Valentine’s promotion: Pet Society Free virtual currency in exchange for purchasing flowers
  • 23. Facebook Connect to Open Graph
    • Facebook Connect, by all accounts, has been a huge success with a quarter of Facebook's 500-million-plus users using it to log into third-party sites
    • Logging in, at this point, is just a small part of Facebook's planned dominance of the Web
    • With Open Graph:
    • Facebook has created a platform that allows sites and apps to share information about users in order to tailor offers, features and services to each one’s interests and tastes – even if that individual has never visited the site before
    • Incorporates your profile info to inform the sites you visit about your likes and dislikes. Visit Pandora and the site will start playing the music you love, or at least the music you say you love.
    • In the background, Facebook is gathering this data in its hive-mind, engendering considerable resentment from rivals and detractors who fear the consequences of a single company knowing so much about so many. (Forbes, 4/26/2010)
    Caroline McCarthy, CNET News, 4/21/2010
  • 24. Facebook Ads: Simple User Interface
  • 25. Facebook Ads
  • 26. Like = Basketball EXERCISE
  • 27. Facebook Ads
  • 28. ROI on Facebook
    • Campaign to drive attendance for hospital event
    • Targeting:
      • Selecting users through their social data and geographic proximity to the various events that were being hosted
    • Results:
      • Over a 5 week period the targeted ads were shown 2,042,151 times
      • 773 people clicked on the ads
      • 17 people registered for the event directly through Facebook
      • Cost was a fraction of the budget compared to spending on local newspapers and radio
    • Cost per conversion (attendee):
      • Facebook: $42.80
      • Radio equated to $525
      • Newspapers equated to $128.53
    • “ What was most powerful about this campaign was not only the capability to use Facebook to target the users that mattered to us, but the ability to do so without the hefty budget of traditional radio and newspaper advertising.”
    • Jamie Bull, CommCreative Unified Marketing blog, 1/6/2010
  • 29. Facebook Ads + Twitter + PR
  • 30. Facebook & Mobile
    • Just getting started? Not really:
    • There are more than 200 million active users currently accessing Facebook through their mobile devices
    • People that use Facebook on their mobile devices are twice as active on Facebook than non-mobile users
    • Single sign-in
    • There are more than 200 mobile operators in 60 countries working to deploy and promote Facebook mobile products
    • Overall mobile use flying through the roof (Japan, S Korea, India & Russia). Predicting that India will have a youth mobile market of 260 million by 2016 – the biggest in the world
    • Facebook has also signed deals with local mobile providers to allow free data access to Facebook mobile to drive up subscription rates there
    • The mobile-advertising market for North America is expected to be $3.5 billion this year according to GoMo News
  • 31. Facebook Places: Location Based Services
  • 32. Facebook Places: Video
    • http:// www.facebook.com/video/video.php?v =10150257497405484&ref=mf
  • 33. Facebook Deals: Local Deals for Mobile Users
    • Deal types: Individuals, friends, charity, loyalty
    • Free – for now
      • “ They’re doing them because they’re great for users and businesses who use FB”
    • Social element key
    • Offers:
      • Gap giving away 10,000 pairs of jeans. When they run out, giving away 40% discount off of any product when someone check-ins to any of their stores
      • North Face giving $1 to charity
      • for a store or national park check-in
      • Golden State Warriors giving away
      • access to a free event with players
      • if you check-in to a game
  • 34. Key Takeaways & Conclusions
    • “ Leveraging public social data to place relevant messages in front of audiences willing to listen may be one of the most underestimated impacts on marketing that the social media revolution has caused.” (Jamie Bull, CommCreative Unified Mktg)
    • “ In the next 12 and 24 months, the top 10 games on Facebook will be dominated by large brands, just like what’s happening on the iPhone.” (Sebastien de Halleux – COO, Playfish)
    • Justin Smith of Inside Facebook has written about how the company is hoping to get partners to convert their own rewards programs into Facebook Credits, used to engage in commerce within the Facebook ecosystem. If this sounds a little like an alternative currency in its infancy, you're on to something.
  • 35. Key Takeaways & Conclusions
    • If you plug your site into Facebook's Open Graph protocol, you are getting tangible and valuable access to the extraordinary network that Facebook has built. But those little ‘Like’ buttons now rolling out across the Web belong to Facebook. Every one of Facebook's partner sites is working, in a small, subtle, unobtrusive way, for Facebook as it seeks to become the nerve center for the ever-growing, ever-changing Web.
    • If Facebook gets its Open Graph protocol right, they will have created something almost as robust and powerful as a government, only nimbler and more resilient.” (Reihan Salam, Forbes, 4/26/2010)
    • Yahoo CEO Carol Bartz: Who’s your biggest competitor?
      • A: Facebook – not today, but they could be. If they keep going, they will have the vault of information on everybody in the world, and that’s valuable.
  • 36. Key Takeaways & Conclusions
    • “ Facebook is now the largest photo-sharing site on the Web and the largest invite service on the Web. Getting into the local deals business might have the same effect. Competitors will have to maneuver in order to not be at a disadvantage and get squashed.” –Ray Valdes, analyst at Gardner
    • Davide Grasso, Nike’s chief marketing officer:
      • Facebook “is the equivalent for us to what TV was for marketers back in the 1960s. It’s an integral part of what we do now.”
  • 37. Questions? Saralyn Bass [email_address] Twitter: sbass10080