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Monetizing Facebook

 

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.

    US Social Network Ad Revenues, 2009-2012 (billions and % change)

    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.”

    Facebook Ad Revenues, 2009-2012 (billions)

     

    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?

     

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    4 Responses to “Monetizing Facebook”


    1. 1 InspiroHost February 28, 2011 at 6:54 pm

      Due to what we call as “trend” and being “trendy”, we usually end up just following what others are doing and using without considering if it really fits our personality or what do we get from such things. Since today’s age is no longer the prehistoric era, almost every single thing can be seen online. Since advertising and marketing online and through Social Medias, almost every single business establishments just followed from others. But come to think of it, are you even getting any profit from paying on ad space? Do you think those people following you, liking your page or requesting to become your friend purchases the products you are promoting in facebook? In case you pay for an ad in facebook, is it even worth the price you’re paying?

    2. 2 Mick Dinnen March 2, 2011 at 10:46 pm

      This is a great post about monetizing a facebook page. In addition to ads, I have also had success buying facebook fans to increase my overall traffic and exposure (of course leading to higher rankings). The best site I’ve found for these services is:

      http://www.buyfanscheap.com/

      Thanks for the quality post, definitely helpful!

      Mick

    3. 3 marc meyer March 9, 2011 at 6:13 pm

      @Inspire No and No. 🙂


    1. 1 Tweets that mention Monetizing Facebook « Direct Marketing Observations -- Topsy.com Trackback on February 25, 2011 at 7:27 pm
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    Marc Meyer is a Digital and Social Media Strategist at DRMG. This is my personal blog where I share observations, thoughts and opinions that are all my own.

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