Facebook State of The Union


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Sarah Personette, Facebook US Head of Agency Relations, presented this insightful at Ogilvy 360 Digital Influence and Buddy Media's workshop "It's 2011 - How's Your Facebook Strategy Doing" event, during Social Media Week New York 2011

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  • More than 600M people on Facebook. If all the people on Facebook made up a country it would be the 3rd largest country in the world somewhere between the population of the U.S. and India. More than 200M access Facebook on a mobile device
  • I’m going to talk about 3 trends that we see happening 1) The first is that today’s web is about people -- our real friends making our experiences better online just as they do in the physical world 2) The second is that this shift creates an enormous opportunity for businesses to stay more connected to people and generate powerful word of mouth 3) And the third is that when businesses reorganize around people, they are seeing really powerful results
  • As you all know, we are in the midst of a fundamental shift in the way we find and consume content online. The 90‘s was all about browsing, [click] and in the 2000‘s it was all about searching. [click] In this new decade, it is all about discovering things through our real friends. This is a shift from the what to the who - from the wisdom of crowds to the wisdom of friends.
  • Both old and new industries are transforming to take advantage of the popularity of experiences reorganized around people. The one’s you see here are just a few examples.
  • This is possible because we are living in an age of rapid technology innovation. If we think about the last 10 years many major industries have been disrupted not only by newcomers, but also by incumbents. Last year, the launch of the iPad was the most successful consumer electronics launch in history, selling 1M units in the first 28 days. Additional stats: • The iPad surpassed the iPhone and DVD player in adoption. Current sales rate is about 4.5M units per quarter which tops the 1M per quarter from the original iPhone launch and 350,000 per quarter when DVD players were launched. • If the current rate persists, the iPad could become a $9 billion per year business, blowing right past game consoles and cell phones to become the fourth largest consumer electronics category. That would put the iPad right behind TVs, smartphones and laptops. (source: cnn:http://articles.cnn.com/ • According to Bernstein Research via CNBC, three million iPad units were sold in its first 80 days after launching in April, and the current sales rate is approximately 4.5 million units per quarter.
  • As technology increasingly goes mobile, these social experiences are following us throughout our lives - I can see what my friends recommended on Netflix, get in the car and find out where my friends are, check-in on my phone to find out what deals are available around us, and play games on my iPad while I wait for them to meet me. [Note: Facebook is part of all of these experience and could be the example, but we are intentionally trying to show different brands involved in these changes - feel free to substitute with Facebook if you chose].
  • The ability for brands to connect with people and their friends everywhere they go is a huge opportunity for businesses.
  • The savviest businesses are recognizing this shift and discovering how reorganizing around people is an incredibly powerful way to achieve results. This is impacting everything from product development, to HR, customer service, customer insights, and marketing. These changes are not easy and often require internal changes, but the businesses who are embracing this shift are being rewarded for their efforts. [click] A recent McKinsey study reinforced that technology-enabled collaboration with external stakeholders helps organizations gain market share from competitors by forging closer marketing relationships with customers and involving them in customer support and product development efforts. Additional data • Next year, four in five US businesses with at least 100 employees will take part in social media marketing, eMarketer estimates. That’s up from just 42% as recently as 2008, and the number of marketers using the channel will continue to rise through 2012. • “… we believe, that technology-enabled collaboration with external stakeholders (fb, web 2.0) helps organizations gain market share from the competition. They do this, in our experience, by forging closer marketing relationships with customers and by involving them in customer support and product-development efforts. Respondents at companies that used Web 2.0 to collaborate across organizational silos and to share information more broadly also reported improved market shares.” https://www.mckinseyquarterly.com/Organization/Strategic_Organization/ The_rise_of_the_networked_enterprise_Web_20_finds_its_payday_2716?pagenum=3 Agencies have reorganized positioning but not structure around people  opportunity to build it from the ground up at scale
  • Threadless and Vitamin Water are great examples of businesses that have put people in the middle of their product development process with great results. Threadless, Inc’s most innovative company in 2008, has as many as 300 submissions a day for t-shirt designs and allows it’s large fan base to vote on their favorites. When Vitamin Water needed a flavor, name, and label for its newest flavor it enlisted it’s facebook community - let’s take a look [click] Additional data • Threadless: Inc's "Most Innovative Company in America" in 2008. Designers submit t-shirt designs, voted on by the community. Only most popular 10 or so are printed each week. They also have fully integrated customer service on facebook. • Vitamin Water: - The Facebook users chose a tasty black cherry-lime flavor and a grand prize winner received $5000 for coming up with the best name: Connect. • Business plan around people example-Kiva: Since it’s founding four years ago, it has now made possible $100 million in microloans between individual lenders and entrepreneurs all around the world. The company has brought together 573,000 lenders (people like you and me putting in $25 or more towards a specific project), and 239,000 entrepreneurs. - TechCrunch
  • Zappos and Best Buy are leading the industry in new types of customer service. Best Buy has 25 super users who spend 8-12 hours a week answering the questions of the 2.5M visitors to its it’s online community. And Zappos is legendary for customer service because it encourages all of its employees to tweet and blog to help answer questions. Additional data • Best Buy, based in Richfield, Minnesota, started its online community in 2008 and says it now gets about 2.5 million visitors a year, generating 100,000 conversations. On top of that, 25 super users spend 8 to 12 hours a week on the site answering about 30 percent of all the questions asked, says Lisa Smith, vice president of enterprise customer care. • In 14 months, staffers have answered more than 36,000 questions via Twitter. More importantly, more than 36,000 consumers have clicked on the links included in those answers and landed on BestBuy.com, says • Zappos: 499 employees are on Twitter and Zappos CEO Tony Hsieh has created a how-to guide to help employees start using Twitter.
  • When companies stay this close to people, they also collect real-time powerful insights about their customers. Starbucks asks it’s community for product, experience and involvement suggestions on the homepage of its website and has generated over 100k suggestions. Sephora uses Facebook community to constantly stay in touch with their clients wants and desires by asking questions and listening. [click] • Quotes from Sephora (will be in video) • “ I think what’s fascinating about Facebook is for those of us who’ve been working in the Internet for the last 10 years-plus, we’ve sort of separated from our customers,” says Julie. “We’re not in the stores day-to-day hearing what they’re saying. But now Facebook takes it to the next level. Not only can we hear what they’re saying but we hear it in real time.” • "We are obsessed with our Fans. We listen to them daily. We talk to them. We ask them questions. We take their input very seriously. We make changes as a result of them. Given that the people who tend to interact with us are our more serious beauty mavens, they really know what’s going on. It makes us realize how in touch our consumer is! We send treats to some of them, thank you notes… and have some exciting (confidential) activities planned for them in the future. We want to make sure there is value in being our fan." (source: National Retail Federation: Feb 26, 2010 http://blog.nrf.com/2010/02/26/sephora-execdiscusses- the-roi-of-social-media/)
  • Last, but certainly not least is marketing. All aspects of marketing are evolving as there are new ways to communicate, build communities, and have friends tell friends about your brand. Old Spice's viral video campaign that had 24M views and shot to the 5th most watched video on YouTube in 2010. [click] play [click] Toyota invited real customers to tell their stories on Facebook and then turned these testimonials into a successful TV campaign. [click] play [click] Let’s take a deeper look at why marketing organized around people is so powerful on Facebook... Additional data: • Old Spice: 5th most watched YouTube video in 2010 (excl. major label music videos); source: http://www.independent.co.uk/ life-style/gadgets-and-tech/mostwatched-youtube-videos-in-2010-bed-intruder-song-old-spice-ok-go-2160091.html • After being put on YouTube, the commercials became viral, with the most popular one amassing nearly 24 million views since the beginning of February. (source: MSNBC) • Toyota: 10,589 videos were uploaded to fb (source: saatchi)
  • Fans are just the beginning. There are many benefits to having fans. You can learn from them and build deeper relationships. However, when you launch a marketing campaign, you typically have goals like announcing a new product, running a promotion to drive sales or trying to build awareness. Just engaging your fans with this message and the small amount of buzz that this may generate is not enough.
  • That is because no matter how many fans you have, they are only a portion of the people you can reach on Facebook. The way you traditionally reach the broader Facebook community is through Ads. [click] However, The real power of a fan is their ability to help their friends discover your brand and connect with your campaign objective. The more fans you have, the greater number of people they can help you impact. Here is an example, let’s say you have 500k fans. [click to number] On average, those 500k fans have 60M friends who they can personally influence. On Facebook, we enable you unlock that value by activating your fans and their friends through Ads with friends. [click] Additional data: • Netflix has 499k fans and 65M friends of fans • Windows has 482k fans and 65.6M friends of fans • Northface has 482k fans and 51.9M friends of fans
  • These Ads are so much more powerful because when someone see’s an Ad with their friend in it, it draws their attention and give the message credibility. Ads with friends give brands the benefits of earned, at the scale of paid. [click] This is the NEW word of mouth and it’s marketing that is twice as effective at driving brand results.
  • When you activate your community through this new word of mouth, you can achieve amazing business results. Let’s see what this looks like in action.
  • As we said, connecting to people is just the beginning, when you leverage those relationships amazing things can happen. [Click] Our partners are achieving real business results every day with the help of their fans. For example, Levi’s Facebook campaigns drove 4X the number of people expected into stores and doubled amount of online traffic. In a recent Facebook advertising campaign, alcoholic beverage maker Diageo proved that Facebook does drive real business results. As a result of its Facebook ad campaigns, the company drove a 5x increase across Diageo aggregate sales, meaning for every $1 they spend on FB ads, they got $5 back in sales (according to a Nielsen Homescan study).
  • Leading up to the 2010 World Cup, Nike ran Facebook ad campaigns in 20 countries to raise awareness of its “Write the Future” film and engage with consumers. The campaign began with a two-day run of highly targeted Premium Event Ads inviting “football obsessed teens” to RSVP to watch “Write the Future” on Facebook on May 20. With the video airing broadly on May 22, Nike followed up with a reach block, delivering Premium ads to 100% of Facebook users in a 24-hour period. These campaigns helped make this video the #1 viral video in its debut week [according to Visible Measures], drove 169 M organic News Feed and Profile Feed stories, 9.4 M engagements with ads, videos and other content, and 38% ad recall [#s still being verified]. Nike also received 2x as many mentions as the World Cup sponsor during the World Cup campaign… when Adidas was a sponsor of world cup. [mentioned refers to mentions on the FB platform - wall posts, status updates, etc.
  • To close we ’ d love to leave you with a few thoughts [feel free to customize] As we all know, the world has shifted - the web reorganized around people creates enormous opportunities for businesses to become better connected to people. To take advantage of these opportunities, businesses are transforming how they relate to people and operate. The companies who are recognizing this shift are gaining strategic advantage over their competitors.
  • When Levi’s launched its new Workwear Collection, it decided to make Facebook a key element in its integrated marketing campaign that included TV, cinema, and print. First Levi’s ran ads to build its Facebook community, then ran a combination of premium and marketplace ads to deliver timely information and reach target consumers. Some ads directed users to watch a new Levi’s film and others offered product discounts. As a result of this campaign, Levi’s saw a 2x increase in traffic to levis.com and another campaign saw a 4x increase in foot-traffic to physical stores. Levi’s also saw its organic impressions soar by about 1,500 percent, proving that Facebook delivers word of mouth at scale - the New word of mouth.
  • Chase knew that it, and the entire financial industry, had a problem with trust. It knew if it could build trust, it could build differentiation in an incredibly meaningful way. So it launched the Chase Community Giving Campaign, where it gave $5M away to charities voted on by its community of over 2M fans. This resulted in 9M people feeling more connected and trusting towards Chase and saying that they were willing to recommend the brand.
  • Facebook State of The Union

    1. State of Facebook: Reorganizing Around People February 10, 2011
    2. Facebook By Numbers
    3. 600M users worldwide
    4. = 50M+ users in U.S. per day + Tuesday night viewers Sunday night viewers
    5. More than half of users return daily
    6. 200M+ mobile users each month
    7. hours Time spent Source: Nielsen monthly time spent November 2010 7 hrs, 7 mins 1 hr, 31 mins 2 hrs, 17 mins 1 hr, 21 mins 1 hr, 16 mins
    8. Facebook users around the world 29 million+ active users 68% return daily 17 million active users 68% return daily 22 million+ active users 65% return daily 19 million+ active users 65% return daily 10 million+ active users 66% return daily 13 million+ active users 58% return daily 17 million active users 67% return daily 4 million+ active users 71% return daily Source: Facebook internal data, Worldwide, January 2011 149 million+ active users 70% return daily
    9. Worldwide engagement Source: Worldwide comScore July 2010 & Facebook Internal Data, November 2010 53% daily <ul><ul><li>Active users log in (daily) </li></ul></ul>Daily 4 hours, 57 mins <ul><ul><li>Average time spent per user (monthly) </li></ul></ul>29 visits <ul><ul><li>Average visits per user (monthly) </li></ul></ul>
    10. U.S. demographic breakdown Source: Facebook internal data, January 2011 Gender Age
    11. Give people the power to share and make the world more open and connected.
    12. The web is reorganizing around people Businesses are reorganizing around people Reorganizing around people delivers results
    13. The web is being rebuilt around people 10’s Discover Search 00’s Browse 90’s
    14. Industries are transforming by reorganizing around people
    15. This is all happening in an age of rapid technology innovation Incumbent Entrants iPad, iPhone iTouch, iTunes Android, Chrome, Youtube, web Apps Kindle, electronics & general merch Motion sensors in gaming inputs Social graph, credits, real-time communications Social gaming, virtual goods, offers Social group buying Location-aware mobile services
    16. These social experiences are following us throughout our lives TV Car Phone iPad
    17. The web is reorganizing around people Businesses are reorganizing around people Reorganizing around people delivers results
    18. Businesses are reorganizing around people Product Development Customer Service Customer Insight Marketing “… technology-enabled collaboration with external stakeholders helps organizations gain market share from the competition ” - McKinsey & Co
    19. Product development is being reorganized around people
    20. Customer service is being reorganized around people
    21. Customer insights are being reorganized around people
    22. Marketing is being reorganized around people
    23. Fans are just the beginning brand fan
    24. Fans are more valuable when they impact their friends 500K fans US data Ads with friends Facebook population Fan base Friends of fans 60M friends My friend likes this brand
    25. This is the NEW word of mouth - it is twice as effective Erik Bahr, Tom Arrix and 14 other friends like Budweiser VS 160% lift in brand recall 200% lift in message awareness 400% lift in purchase intent
    26. The web is reorganizing around people Businesses are reorganizing around people Reorganizing around people delivers results
    27. A focus on people delivers the results brands care about 4X offline 2X online 2X preference foot traffic +9M recommendation +12% awareness +7% intent ROI 5X
    28. 2x #of mentions over World Cup sponsor
    29. Businesses are transforming how they relate to people and operate Companies recognizing this shift are gaining strategic advantage The web organized around people creates new opportunities
    30. Thank You!
    31. 2x increase in traffic to levis.com
    32. 9M+ recommendations for Charity