2. Founded January 2007 All In On Advertising Platform $34.5 mm in funding: First Mark Capital The Founders Fund Union Square Ventures American Express Investors: Peter Thiel, Jonathan Miller 170+ FTE, 1000+ Paying Customers Platform Partners: AmEx, TWC, eBay Largest Ad API Developer In The World 11 5 3 19
13. Apps Drive Traffic Inside Facebook Definition of ‘Like’ changes. Expectations change. Engagement apps instead of websites. Trading ‘Like’ For Value. Pages standardize. 2010 a social contract is formed
19. Own Your [VERBS] like you own your nouns Gelling with Dr Scholls Lounging with Lay-Z-Boy Growing with Gerber Rejuvenating with Olay Imaging with GE Doing It with Nike
People had Profiles Brands had Pages People ‘Liked’ things they actually like to show off their fan-dom Brands used Pages to engage with the marketplace. That was like Twitter, but slower.
http://en.wikipedia.org/wiki/Facebook_Beacon What is Beacon (2007): Beacon let brands record your activity on their websites and automatically published those actions to your FB feed Great, in theory
Great in theory, bad in practice. (Note: this is not a true Beacon screenshot – they are tough to find these days). Coke sues FB, users sue FB (class action), users sue brands. Facebook makes Beacon opt-in (2007), but nobody opts in. Why would they? There was no incentive Product dies a slow death – deprecated in 2009 Ultimately a failed because: was socially tone-deaf, privacy concerns Nearly sank FB ads outright
Facebook creates conversion tracking (beta) to track conversion events on your site Direct response advertisers try to replicate their Google/Display strategies on Facebook.
Nobody goes to Facebook to be sold stuff. They go there to look at pictures of cats and post pictures of cats. Facebook discourages advertisers from comparing Search/Display conversion data against SEM conversion data. FB deprecates Conversion Tracking before it leaves Beta.
Facebook deprecates Conversion Tracking and introduces Social Metrics instead Social Metrics describe “Ads With Friends.” These are ads that include your friend’s name in them. Social CTR, Social Impressions, Social Clicks, etc Social metrics are a hit ( http://www.adrants.com/2010/09/facebook-introduces-new-metrics-for.php ) Nielsen reports users are 68% more likely to remember ads and 100% more likely to remember what the ad said when it comes w/ social endorsement
Where everyone failed, Zynga succeded. Zynga did 2 things right: Kept their traffic in the Facebook ecosystem (instead of going to external webpages) Advertised products that were 100% focused on engagement. They’re games! Zynga ‘s model: drive engagement first , and monetize later . (Games were free to play with hooks to pay later) Direct-response advertisers had it backwards. Software sales in gaming industry shrink by 6% in 2010. Zynga grows by 3x.
Facebook begins marketplace education. Encourage Zynga-like behavior. Advertisers sending traffic to apps inside FB instead of to their website. Users click ‘Like’ to get a coupon code or enter a sweepstakes Now advertisers demand apps to spark engagement. Developers blossom to meet that demand. The meaning of the word ‘Like’ starts to change. In 2010, 40% said they clicked ‘Like’ to get a promo. Facebook users start to expect that when they click ‘Like’ they’ll get something. Page design starts to become standardized just like website design became standardized in the early 2000s
Zynga’s early fueled by spammy messages in the Feed. Facebook decides to eliminate this in-feed spam. They make a fair trade – Spam goes away, but Sponsored Stories ads are created. Knowing that socially endorsed ads are the best kind, Facebook creates SS so that 100% of them are socially endorsed. Facebook knows that Socially Endorsed ads perform better, so they create Sponsored Stories (these are always Socially Endorsed)
Facebook expands the Gaming model to Music, Movies, TV. FB develops and releases the new Timeline feature in 2011. Timeline includes apps that live in your Profile page (Spotify, Netflix, etc). These products are engagement , just like Zynga. FB wants to own as much of your online time as possible.
New Feature: Ticker – a realtime mini-feed that automatically shares user activities “ Jeff is watching Dexter on Netflix ” We’ve moved beyond ‘Like.’ Now you can [verb] anything , but you need a developer to do that . Engagements can be turned into Sponsored Stories Sharing is now easier. FB wants to share more things OpenGraph lets FB share stories in the Ticker even if they happen on other websites.
Leveraging the Ticker and the OpenGraph require a developer
Facebook was competing with the rest of the internet for users’ engagement and attention (2011). In 2012 brands will compete against each-other for the largest share of the engagement. You need to maximize the use of the tools that Facebook has given you to compete (Frictionless Sharing + Sponsored Stories). You must all become developers to spark engagement in your 2 worlds: Facebook.com and the OpenGraph
Users will be: Gelling with Dr Scholls Lounging with Lay-Z-Boy Growing with Gerber Rejuvenating with Olay Imaging with GE Doing It with Nike
Ads will be replaced by auto-generated Sponsored Stories that tell users’ friends what [verbs] they did with different brands. The volume of sponsored stories will increase, and the real-time ticker will move faster and faster. Brands will need apps to win a share of the attention and engagement on Facebook. App/OpenGraph development on Facebook will turn into an arms race. These new tools and ads will look less and less like the traditional ads we are accustomed to. Because of frictionless sharing, the breadth of the OpenGraph, and the ingenuity of advertiser-who-become-developers, the line between Ad and Content will blur, and the ad as we know it will be obliterated.
