Presented by Jim Edwards at Business Insiders Social Media ROI conference on Sept. 27, 2012

2. We know social media is
a big deal for marketers.

3. But does it pay off?

4. Facebook has 1 billion users

5. Here’s the total size of the social media universe, in users:
1000 955
800
Number of
users 600
500
(Millions)
400 330
250
200 174
40 20 16.8
0
Facebook Twitter Windows Live Google+ LinkedIn Instagram Foursquare Pinterest
Messenger

6. In China, social-media is just as big:
600
536
500
400
Social media users
310 300
by company
300
(millions)
200
100
0
Qzone Tencent Weibo Sina Weibo

7. So the audience is there.
What about the money?

8. Americans spend 53 billion minutes per month on
Facebook (~5 hours per user).
Facebook 53,457,258
Blogger 723,793
Tumblr 623,525
Time spent on social media
Twitter 565,156
LinkedIn 325,679

9. But Facebook only gets about $5 per user per year

10. That seems like chump
change.

11. But is it?

12. U.S. Ad Revenue Per Month Per User:
FACEBOOK: $1
GOOGLE: $8
TV: $12

13. Users are more likely to be in spending mode than average :
More likely to buy music 75%
More likely to be a heavy spender on clothes/shoes 47%
More likely to go on a date 45%
More likely to attend a sporting event 19%
More likely to go to a gym 18%

14. Marketers have showed up as a result.
Advertising revenues, by quarter:
1200
$992
1000
Millions 800
600
400
200
$65 $63
$0 $0 $0 $0
0
Facebook Twitter LinkedIn Pinterest Google+ Instagram Foursquare

15. That’s
~$4.5 billion
of social media spending per year.

16. Here's how that compares to total digital ad spending:
35
$32 billion
30
25
20
Ad Revenues
(billions)
15
10
$4.4 billion
5
$1.6 billion
0
Total Web Social Media Mobile
Estimated annual run-rate based on 2011-2012 numbers

17. Social media is
14 %
of all online ad spending.

18. Growth in social media ad spend has been super fast.
Here's Facebook's ad revenue growth:
3,825
3,154
Ad Revenues
1,868
764
130 231
60
2006 2007 2008 2009 2010 2011 2012

19. These are the 10 biggest advertisers in social media,
by impressions served, per comScore:
AT&T Inc. 12,916,545
Microsoft Corporation 4,092,246
JustFabulous, LLC 3,891,187
Walt Disney Company 3,693,877
IAC - InterActiveCorp 3,623,737
State Farm Group 3,570,067
Amazon.com, Inc. 3,317,759
Weight Watchers 3,244,864
Universal Technical Institute, Inc. 2,976,699
Netflix, Inc. 2,956,381

20. Facebook is profitable.
LinkedIn is profitable.
Twitter is probably profitable.
But has any of this been profitable
for their advertising clients?

21. The evidence is anecdotal.

22. LinkedIn’s revenues are still growing nicely

23. Accenture says it saves up to
$150,000
per executive by using LinkedIn instead of a headhunter
for recruitment

24. Now Facebook: These are Facebook's 10 biggest
advertisers, according to our own research:

25. Facebook Anecdotes (from Facebook):
• 70% of Facebook campaigns deliver ROI of 3x or better.
• 49% campaigns delivered 5x or better.
• Electronic Arts spent $2.75 million promoting Battlefield 3 on
Facebook. They attributed $12.1 million of their sales to these ads, a
4.4x return.

26. • P&G’s CEO said he
was proportionately
reducing his
$10 billion ad
budget because
exposure
on Facebook is free.
• Then he laid off
2,000 people!
• And he cut half a
percent off his
SG&A expenses.
- Bob McDonald, P&G CEO, January
2012

27. Some DSP partners in Facebook’s real-time-bidding ad exchange say
advertisers used to getting a 10X ROI elsewhere are making
16X with FBX

28. But why would any company advertise on Facebook
when it can host a Brand Page for free? Because only
15%
of branded posts actually get seen by Facebook fans.

29. So how big is this the FBX market, potentially?
About another additional
$1 billion per year.

30. Now let’s look at Twitter.
Twitter doesn’t make its ROI data
public, but here’s an example:

31. Online jewelry site Bottica says customers coming
from Pinterest spend an average of $180 per visit.
Based on sample
of 50,000 visitors
$180
$162
$85
Pinterest Site Average Facebook

32. Zappos built a site to
encourage users to share
purchases on Pinterest

33. But Zappos users posting on Twitter
brought in much more revenue per post:
$33.66
$2.08
75¢
Twitter Facebook Pinterest

34. Compare that to Pinterest.
When Pinterest users show up, they spend more

35. But social media still underperforms as a referrer to e-
commerce sites.
120
104.24
101.25
100 91.6 91.7 90.4
Average 84.58
79.08
82.72
80
order value 64.69 63.37 64.19
60.7
by traffic 60
source: 40
20
0
Q3 2011 Q4 2011 Q1 2012 Q2 2012
Email Social Search

36. Thank you.