Facebook (CSN, Monday, Week 11)
competing-with-social-networksyear-twoHow the heck can Facebook monetize?
Display Ads --- mediocre results
Why ads don't work well on social platforms:
-- Wrong context (salesman pulls up a chair at your family dinner table)
-- Harms user experience
-- No purchasing intent (vs. search engine, which have >2% CTR)
Targeted ads (age/geography/education/gender/religion/interests) --- somewhat better results
Friend-approved, brand-generated content --- great
The real goldmine: the "Like" button
===> Friend-posted ads = 10x higher CTR. Why? surprise, relevance, FEAR OF MISSING OUT
And your friend endorsed it --- doesn't look like advertising!
But why do people tolerate --- and even welcome --- app-generated content?
===> People want content. And people hate writing --- ~25% of active Facebook users have blank profiles.
Brand pages --- mixed bag
As a one-way channel to communicate with fans --- maybe good
===> Cheap way to talk to users and share content, BUT preaching to the converted (users already opted in)
Upside: shareable stories; maybe good content goes viral and builds awareness with friends
As a channel for fans to communicate with brand and with each other --- not so great
Upside: feedback on customer experience
Downside: probably not good feedback (people tend to post complaints), brands forfeit control over their image (can't really moderate/curate your brand page; it's creepy)
Facebook Platform (access to everything but users' "read" history; capability to post to profile) --- jackpot
Examples: FarmVille posts to my profile when I play, horoscope app posts to my profile every day with zero input from me, EventBrite posts ticket purchases on my profile.
EventBrite: I buy a Lady Gaga ticket. EventBrite posts to my profile --- free advertising for Lady Gaga, social proof of event's awesomeness! Very high CTR! My friend buys a ticket, and the cycle repeats itself.
Is there really any better advertising than "your friend bought this"?
EventBrite says the average write-back is worth $2.50 !!!
Takeaways: the best social strategies solve users' social failures.
People hate generating content. Do it for them...