Monetizing Facebook

Posted on February 25, 2011 by marc meyer

Let’s look at three situations.

We’ve all been wondering either on the behalf of the company’s we work for, or the clients we serve, or for ourselves- How can we leverage Facebook to actually make money? Recently, Social commerce platform ChompOn, threw down the gauntlet by publishing some data on how much a Facebook share and tweet is worth.

For those who have never heard of ChompOn, they are a site/service where you’re able to create Groupon like widgets to embed on your website.

Real quickly, for shares and tweets, ChompOn was able to attribute sales to the original action, so they took the total revenue attributed to each action and divided it by the total number of shares/tweets. For likes and follows, they had to estimate attribution by looking at their traffic references and subtracting out purchases made through shares/tweets as well as purchases made through direct traffic.

I don’t know. It seems like such an inexact science. I know it’s based on The notion of group buying shares and likes and tweets but still…Can we be that precise on the value of a share or a tweet? If we were, I would think much more would be happening in this space and business. Is that why Groupon was valuated so high?

Next we have some data by Emarketer in which it was reported that US marketers will spend $3.08 billion to advertise on social networking sites this year. Additionally, that growth in spending will bring social media ad dollars to 10.8% of the total spent online in the US.

What’s not surprising though was that the primary driver of the change in projected spending is because of greater ad spending on Facebook.

”2010 was the year that Facebook firmly established itself as a major force not only in social network advertising but all of online advertising,” said eMarketer principal analyst Debra Aho Williamson, author of the upcoming report “Worldwide Social Network Ad Spending: 2011 Outlook.” “In 2011, its global presence is something multinational advertisers can’t ignore.”

These numbers just blow me away. Look at the change in revenue from 2009 to 2012 in the US alone!

OK last one here. Recently SmartPulse conducted a poll in SmartBrief on Social Media — asking: Have you bought ads on social networks? If so, did the ads deliver a high return on investment?

The choices consisted of the following:

No, I have never purchased ads on social sites — 64.86%
Yes, I have bought ads on social networks and the return on investment was low — 27.03%
Yes, I have bought ads on social networks and the return on investment was high — 8.11%

I’m going to echo the question that was broached in the body of the survey results: “Why is the ad spend on social sites growing so rapidly, and will it continue?” I’m then going to affirm the next statement:

I am astonished by these ad-sales figures, since everyone I seem to ask either says they’ve never purchased social ads, or they have bought ads, but would never do it again because of extremely low return.

Am in the bubble that ignores banner and display ads? Perhaps. isn’t the click thru something like 1/2%? I get it that social networks understand that their main source of income is always going to be derived the majority of the time from advertising. Facebook it would seem, is ideal then, given their 600 million registered users; because it can indeed provide a platform to purchase highly targeted ads based on specific demographics. But I think this highlights a bigger issue-No one is challenging a better way to make money either via Facebook or in social, either from a platform perspective, aside from a subscription model, or from the advertiser/brand side.

So of the three scenarios. Is a Facebook share really worth $14? Are advertisers wasting money on Facebook? What advertiser is making money on Facebook? What brand is doing a killer job of utilizing Facebook to make money and can prove it?

Social Media Conundrum #12: Justin Bieber is popular, but he’s not influential?

Posted on February 18, 2011 by marc meyer

I can’t believe I’m going to weigh in on this, but I saw a tweet from a notable social media analytics consultant in which the following was stated for the umteenth time.

Popularity does not equal influence…

I immediately thought, “Could Justin Bieber and Lady Gaga sell product”? Isn’t that influence?I then had to go look up a quick definition of influence.

in·flu·ence

ˈɪnfluəns/ [in-floo-uhns] noun, verb, -enced, -enc·ing.

the capacity or power of persons or things to be a compelling force on or produce effects on the actions, behavior, opinions, etc., of others

First I wanted to check something on Twitaholic: The top 15 people being followed on Twitter.

This is a list of the top 15 most “popular” people on Twitter. Let’s look and see who could sell or who does sell product. Let’s pare the list down first.

We have Justin Bieber, Lady Gaga, Britney Spears, Kim Kardashian, Ashton Kutcher, Ellen, Katy Perry, Taylor Swift, Oprah, 50Cent, Ashley Tisdale and Selena Gomez. 12 Celebrities from the world of entertainment. Immensely popular. But are they influential? Can they produce a compelling action on someone to buy product? Could they change behaviors and opinions? Can they influence people to buy stuff?

Lady Gaga sells video sunglasses for Polaroid, headphones for Beats by Dre, phones for VirginMobile, and a host of items and services via product placement in her videos. All this adds up to roughly $5-$10 million per year.

Rather than quote the whole article from Guy Kawasaki, read about Guy’s experience at a Justin Bieber concert and the machine behind his persona.

Britney has deals with Elizabeth Arden and Candies. Taylor Swift has deals with Sony and CoverGirl. 50 Cent has deals with Reebok, Vitamin Water, Right Guard, PlayStation, and Steiner Sports.

We could easily go through each celebrity on this list and view the products that they sell. They sell the products because they can influence buyer behavior based on their celebrity, based on their popularity. Am I wrong? I know sales are one thing and fame is fleeting, but because of their celebrity and popularity they can influence buyer behavior right now. Right?

How can you possibly say no? Isn’t that influence? What am I missing here? Help me out.

Content is under scrutiny? It’s about time.

Posted on February 17, 2011 by marc meyer

Creation, curation and aggregation. We all probably fall into one of those categories. We do one of those. I do. I don’t dispute blog posts like this Why Content Curation Is Here to Stay. I get that. What I have a problem with is the type of content creation we run across when doing brand monitoring work for clients. It’s falling into two camps.

Here’s the first.

Recently we were doing some work for a very prominent client where in the analysis of brand mentions we had to sort through thousands, yes thousands, of useless pages of content on websites that were set up as splogs to drive better search results around pages geared towards Google Adwords. This is troll like stuff. This is not new. Useless web pages have been appearing high up on search result pages for awhile now. So Let me ask you a question. I assume that most of you who read this post are fairly savvy web users, but when you do a search-what part of the search result do you look like? Me? I look at the URL under each search result. and that in and of itself can be revealing-sometimes content that you think is going to be worthwhile turns out to be crap.

I’m using Google search results as the prime example here.

I thought we were getting the best search results possible? Maybe not. For a lot of us Google is part of our everyday lives. We are slaves to the rhythm of search as much as we are to what Google returns to us. Google and search dominate the web. The conundrum? To get traffic to your webpage, you have to appear high in Google’s search results. Which in turn means that you must create some type of content that works for Google. Thus the incentive to learn or understand SEO and Google’s Algorithm i.e. game the system, is huge.

Google will admit that the quality of it’s SERPS is higher than it has ever been; in terms of comprehensiveness maybe so, relevance may be debatable. They might be the first to tell you that there is a proliferation of sites that rip off other people’s content because they’re too lazy to build their own audiences based on fresh content and fresh thoughts and ideas; and that is a problem. Yep, the rise of the “content farm” which is heavy on volume and light on fresh, original content is upon us.

Google has been making changes to its algorithm to keep low-quality sites from appearing high in searches, according to Matt Cutts in a blog post last month. But he also wrote that, despite Google’s efforts,

The fact is that we’re not perfect, and combined with users’ skyrocketing expectations of Google, these imperfections get magnified in perception.”

I cannot tell you how frustrating it is to have to sort through garbage search results both personally and on behalf of a client; to be bogged down with the process of weeding through content farms.

“As pure web spam has decreased over time, attention has shifted instead to ‘content farms’, which are sites with shallow or low-quality content,” Cutts added.

I got into SEO years ago and understand the game. High rankings in search have always been driven by the number of pages/sites that linked to it and how prominent they were ranked and what pages and sites were linked to them. There were always “other” little things involved, but to me it was always about the hub and spoke model. What sites were at the end of the spoke and so on and so forth. Oh yea, and one other thing-Content.

Marketing departments and SEO companies understand this. Thus, they’ve been creating “landing pages” buried inside corporate sites to hit all of the different possible combinations of keywords of a search query relating to their company/ industry. Bloggers do it by linking to each other. It works, content farms work, and that’s part of the problem.

The bigger part of the problem? Large companies are catching on. They know this and are willing to play in this grey area space that Google doesn’t police very well, and we, the people that do searches, suffer for it. As it turns out, they are getting away with it. Or are they? The latest to be identified according to the New York Times is JC Penney. Large and small companies will continue to game the system like this until a) they are caught and penalized or b) Google in particular-fixes the algorithm. Until then, content farms will continue to rule and the research that you and I do on behalf of clients, will still take three hours instead of one.

If only there were a way for monitoring companies to weight and kick out splogs and obvious content farms…hmmmm.

On Brand Experience

Posted on February 8, 2011 by marc meyer

When I was in grade school, one Christmas in particular stood out for me but not for the reasons you might think. My parents were not getting along at the time and for whatever reason, I received a ridiculous amount of presents from my father. Some of which I was not even interested in nor had I asked for. I found this odd and yet this one thought was not lost on me even at that young age-I thought that my dad was trying to buy my affection.

I remember thinking that why couldn’t he just spend more time with me? Why couldn’t he have just hung out with me and talked with me? That’s all I wanted to do. I didn’t need presents. Well maybe one or two but…

Now let’s think about the brand experience. Before the age of social media, we really didn’t talk about the brand experience. It didn’t really have a name. It was just marketers trying to sell something. However, once consumers found their voice-It became readily apparent that they wanted a say so in what they wanted from the products they bought.

Pay attention to that last sentence.

It’s funny but sometimes I think we have been beat down so much as consumers that we misconstrue good customer service as a warm “live” voice on the other end of a phone. Great customer service? Someone who cares. Ironically, Brand loyalty starts out with the intent of the consumer hoping to get something from the brand, but then is actually cemented by something as simple as a conversation or recognition that you actually exist.

That’s all we really want. We just want to talk.

Brands are still not taking Twitter Seriously

Posted on February 1, 2011 by marc meyer

I’m not nitpicking. But let’s talk about social media icons. We’re starting to see them on everything. Specifically the Twitter and Facebook icons. Just because we see them, doesn’t mean that those companies are “social”, that they are engaged, fully engaged or partly engaged. We can easily call it social media lip service, but when I checked the Twitter presence of some of the top 100 global brands according the Businessweek-engagement was little or none, and in a lot of cases, the brands didn’t even possess the Twitter handle.

For example, @Disney has over 140,000 followers and yet has only tweeted 210 times. I know it’s Disney and they might not have to care about Twitter, but that’s not the point. It’s 2011 and brands are going all in when it comes to social. Just look at this years Super Bowl Ads. This might be the year social takes the Super Bowl by storm.

Check out @Samsung 2500 followers and… a total of 8 tweets. Meanwhile they have over 200,000 fans on Facebook. Was this the strategy they were told or did they come up with this internally? Should I give them the benefit of the doubt in regards to when they launched their (new) social identity? Is it a work in progress? Take GAP, over 50,000 followers and yet a mere 400 or so tweets…

You’re probably saying it’s just Twitter, but for brands, Twitter makes more sense than it does for the casual user. It’s a better fit and it’s an opportunity.

With that said, I would like to say to brands, “Don’t be social because you have heard you need to be”. Yet we know that’s how some operate. Why not attach a strategy with some (not many) achievable decent KPI’s to your social initiatives? Weave your Twitter activity into your daily routine the way you check email dozens of times per day.

Hey Brands, don’t hoard social, own it. Yet I know major companies that either go out and do nothing with their Twitter presence or worse, squat on their Twitter handle so that others don’t it. For example. @Budwesier, @L’Oreal, @Heinz, @Colgate, @Chanel, @Wrigleys , @KFC, @Avon , @Adidas, @rolex , @Hermes, Tiffany, and ING, all get an F. Hello strategy? You might be thinking or actually they might think that they don’t need to bother with Twitter-Guess what? Twitter is free and Facebook is free and the barriers of entry and engagement are absurdly low.

What a lot of companies fail to realize is that we consumers will search for them, or they will eventually come up in search because of a question, a customer service issue, or because prospects want to see who they are. We will click on your social icons. Then we’ll come to our own conclusions. Search and social are not strange bedfellows. Your social results and personas will come up high in search and if you and your brand are coming up short, it’s an opportunity lost.And if you are there, don’t sleep walk through the chance to engage with your customers.

Social without a purpose is a waste. Brands who put the Twitter and Facebook icons on their site or on their marketing collateral with nothing to really show for it, is not very smart. Of course I also think having search results where a brand and its associated products does not come up on page one or position one is a major transgression, yet some major brands miss that opportunity as well. Positive search results are a win and always will be. Bad search results can be devastating.

Control the social aspects of your brand.