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Social Network Advertising Hussein Fazal [email_address] “ In 2008, if you’re not on a social networking site, you’re not on the Internet.” - IAB Platform Status Report, April 2008

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Social Networking - Reach of Web population Source: comScore Inc, Worldwide Feb’08, All Locations, Persons 15+ 53.7% 15,794 29,412 Germany 52.0% 17,583 33,813 France 84.3% 18,181 21,567 Canada 76.7% 25,502 33,249 United Kingdom 66.4% 108,248 163,024 United States 65.4% 538,375 823,203 World-Wide Reach Social Networking (‘000) Internet Users (‘000)

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Canada - Continuous Growth

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Social Networking goes beyond facebook! Source:ValleyWag, June ‘07

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<ul><li>4th most-trafficked website in the world </li></ul><ul><li>More than 35 translations available on the site, with over 65 in development </li></ul>However, facebook is the largest

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<ul><li>Worldwide online advertising spending: $40 Billion </li></ul><ul><li>Worldwide social networking ad spending: $1 Billion </li></ul>Advertising Budgets While social networking reaches 65% of Internet users only 2.5% of online advertising spending is directed to social networks! WHY ?

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<ul><li>Social Network Advertising can be done with small budgets </li></ul><ul><li>Large brands simply are not sure what to do </li></ul><ul><li>Large brands are ‘scared’ to lose control </li></ul><ul><li>Spend just simply hasn’t caught up yet – similar to the transition from traditional advertising to online advertising several years ago </li></ul><ul><ul><li>There must be a shift in mindset as ROI isn’t as easy to measure </li></ul></ul>WHY? 85% of social media users think that companies should interact with them through this medium – emarketer 40% of users have made a purchase based on advertising found on social networking sites - razorfish

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<ul><li>Banner Advertising </li></ul><ul><li>Virtual Gifts </li></ul><ul><li>Creating a group </li></ul><ul><li>Creating a Page </li></ul><ul><li>Building an application </li></ul>Advertising with facebook

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<ul><li>Right-hand column – CPM or CPC buys </li></ul><ul><li>CTR of 0.04% </li></ul>Banner advertising w/ facebook

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<ul><li>More than 95% of facebook members have used apps </li></ul><ul><li>Better placement Better CTR </li></ul><ul><li>Deeper Reach </li></ul><ul><li>But still, not taking advantage of being on a social network! </li></ul>Banner advertising on applications

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<ul><li>Users can deliver gifts publicly or privately </li></ul><ul><li>Virtual gifts are given a high priority on the news feed so they spread far and fast </li></ul>Sponsored Virtual Gifts <ul><li>People buy virtual gifts! (Estimated to provide $3 million in revenues / month for facebook (source: insidefacebook.com) </li></ul>

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<ul><li>Post discussions, photos, videos, links </li></ul><ul><li>Easy to send updates directly to members facebook inbox </li></ul><ul><li>Easy for members to invite their friends </li></ul><ul><ul><li>The group 1,000,000 Strong for Stephen Colbert grew from zero to one million members in 9 days!) </li></ul></ul><ul><li>Group acts as a ‘Bumper Sticker’ on users profile pages </li></ul><ul><li>Create a central place for customers, partners, and friends to participate in conversations around your brand </li></ul>Facebook Groups

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<ul><li>Message blasting limited to 5,000 people (increased from 1200 as of June 2008) </li></ul><ul><li>Can be a target for spammers </li></ul><ul><li>Cannot add custom applications </li></ul>Facebook Groups Drawbacks Groups are good for quick active discussions attracting quick attention BUT if you are looking to build a long-term relationship between your customers and your brand, pages are the way to go

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<ul><li>Launched in November 2007 – similar to groups BUT: </li></ul><ul><ul><li>More flexibility to add content incl. facebook applications </li></ul></ul><ul><ul><li>No limitation to number of fans you can message </li></ul></ul><ul><ul><li>You can view demo info of your fans – age, gender…. </li></ul></ul><ul><ul><li>Pages can now have custom flash or HTML (fbml) </li></ul></ul><ul><ul><li>Users become a ‘fan’ of your page </li></ul></ul><ul><ul><li>No ads on right hand column </li></ul></ul>Facebook Pages

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Facebook Page Example - COKE Coke Page has over 1.2 Million fans! Grown virally from news feed News feed is the holy grail of facebook viral growth!

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How do I grow my group/page if I am not Coke? Create a reason for users to become a fan and keep coming back i.e. win prizes by becoming a fan of crest whitestrips Create an area for discussion, not a branded destination Kick off with a banner advertising campaign to build-up initial user base

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<ul><li>Gives you an easy way to bring your customers together and opens a ‘long-term’ relationship </li></ul><ul><li>Must be comfortable with negative chatter about your brand </li></ul><ul><li>Facebook is committed to continuing to build out the pages functionality </li></ul><ul><li>BUT – There is a MORE ENGAGING way to communicate with your customers… </li></ul><ul><li>Build a Custom Application </li></ul>Are pages/groups the answer?

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<ul><li>Apps can offer a specific level of branded engagement whereas pages are generic </li></ul><ul><li>More control over the holy grail. What is more engaging? </li></ul><ul><ul><li>“ Hussein became a fan of ABC” </li></ul></ul><ul><ul><li>“ Hussein challenges you to beat his score in the ABC super contest - Prove Yourself.” </li></ul></ul><ul><li>Highest level of user engagement </li></ul><ul><li>Most people join a group/page for the ‘bumper sticker’ and forget about it </li></ul>Custom Applications

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<ul><li>Build virality into the core of the application </li></ul><ul><ul><li>Give users a natural and compelling way to invite others i.e. ‘You scored 1200 – Can your friends do better?’ </li></ul></ul><ul><ul><li>Take advantage of holy grail (feed) </li></ul></ul><ul><li>Cost per install campaign with Ad Networks </li></ul><ul><ul><li>Banner advertising </li></ul></ul><ul><ul><li>Cheap Incentivized installs </li></ul></ul>Build an application There are over 50k application in the app directory with 140 added per day, so how do I make my app grow?

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<ul><li>FedEx created “Launch a Package” </li></ul><ul><li>300k active users in 6 days because VIRALITY was built in app </li></ul>Branded App Example - FEDEX

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<ul><li>Reebok created “Talkin’ Crazy” where users could write ‘smack’ on shoes and send to friends </li></ul>Branded App Example - REEBOK

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<ul><li>Build a page with a reason for users to be a fan </li></ul><ul><ul><li>Can be used later to message blast your fan base </li></ul></ul><ul><li>Build an engaging custom application </li></ul><ul><ul><li>Built in virality is the key </li></ul></ul><ul><li>Cross promote the two – encourage app users to become fans of your page and fans of your page to install the app </li></ul><ul><li>Run a banner campaign to get the initial user base </li></ul>With no budget restrictions, what should I do?

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<ul><li>Banner advertising used to be only for large brands </li></ul>Enough about facebook – what about myspace? Until October 12 th when they launched ‘myads’ self serve advertising for budgets between $25 - $25,000 <ul><li>Minimum CPC rate of 25 cents </li></ul><ul><li>Can contain images </li></ul><ul><li>Advanced targeting options </li></ul><ul><li>Estimated to provide daily revenues of $160k for myspace already! </li></ul><ul><li>(source: TechCrunch) </li></ul>

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<ul><li>myspace has an older demographic </li></ul><ul><li>facebook has a demographic that reaches people with higher income + more educated </li></ul><ul><li>facebook has a higher demographic that is African American and Asian. Myspace has a lot more Hispanic users </li></ul><ul><li>more people are addicted to Myspace (time spent) – skewed due to music users </li></ul>myspace demographics myspace vs facebook

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<ul><li>Nike Soccer </li></ul><ul><li>50,000 fans </li></ul><ul><li>Watch clips, discuss soccer, links… </li></ul><ul><li>myspace is a mess! </li></ul><ul><li>Trailing behind – most examples are from 2006! </li></ul>myspace pages

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What else is out there?

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socialvibe <ul><li>Users and brands together support causes </li></ul><ul><li>Can place widget on facebook, myspace, bebo, myyearbook… profile! </li></ul>

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cyworld <ul><li>Over 90% of South Koreans in their 20’s are on cyworld </li></ul><ul><li>Cyworld profiles (“minihompy” or mini-homepage) </li></ul><ul><li>Users can ‘decorate’ their avatar and mini-homepage with branded and non-branded items </li></ul>

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<ul><li>Social Network Advertising spending – small but growing </li></ul><ul><li>Opportunity for brands – but must change mindset </li></ul><ul><li>Facebook is the dominant player </li></ul><ul><li>Can do a lot for very little $ </li></ul><ul><li>New industry - lot’s of innovation still to come </li></ul>conclusion

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Questions?