How facebook changed advertisingPresentation Transcript
How Facebook Changed Advertising Saralyn Bass November 2010
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
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?
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
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
How Facebook Changed Advertising
‘ Like’ Button
Facebook Connect / Open Graph
Games / Virtual Currency
Geo-Location and What This Means
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
Brand Loyalty & Engagement: 16 Million Fans Fan Interaction Seasonal Promotions Charlene Li: Starbucks top in terms of web engagement
Polls Engage Users About New Products
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
Lady Gaga: E-Commerce + Political Activism 5 new show dates and how to get tickets Engaging fans: “Don’t Ask Don’t Tell” Event
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
Why Facebook Ads Work http://www.youtube.com/watch?v=-wHsfeWkXvM
Levis: Social Shopping E-Commerce method where shopper’s friends become involved in the shopping experience
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
‘Like’ = Sales Source: Advertising Age
‘Like’ Button Evolution
‘ Like’ button now integrated on 1-2 million sites
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
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.
Facebook & Games Justin Smith, Inside Facebook, 1/4/2010 “ 33 million people played a Zynga game yesterday” Mark Pincus, 9/27/10
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
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
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.”
• 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
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
Facebook Ads: Simple User Interface
Like = Basketball EXERCISE
ROI on Facebook
Campaign to drive attendance for hospital event
Selecting users through their social data and geographic proximity to the various events that were being hosted
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):
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.”
“ They’re doing them because they’re great for users and businesses who use FB”
Social element key
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
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.
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.
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.”