Archive for the ‘ Facebook ’ Category

Marketing 2.0: Ad Smarketing

Marketing has come a long way from the days of the ever-so relatable Joe Camel. Gone is Joe, and so too are the cigarette ads, now a new player is in town: Facebook.

Marketing has finally come to the people. Egocentric marketers, whom really have no relation, nor understanding of their target audience, save for a few Nielson test group results, no longer dictate what is successful and what is not.

Now the people, the consumers, and even the Facebook-stalkers hold the key to a successful marketing plan – public opinion finally matters. On the Internet, things are not broadcasted en masse, marketing as a whole has become very demographic-specific. It is now possible to reach a group of unwed, white, 16-19 year old girls in the mid-west with great accuracy.

Today, Neilson released a special report entitled “Advertising Effectiveness: understanding the value of Social Media impressions.” This 12-page report is the result of six months of research consisting of surveys of over 800,000 Facebook users, 125 Facebook advertising campaigns and 70 brand advertisers.

The study concluded that there are two types of impressions in social media marketing (smarketing): paid impressions, and ‘earned’ or ‘organic’ impressions. These impressions are garnered from three sources: Homepage Ads, Homepage Ads with social media context and organic impressions. Of course, my favorite is the organic impression (duh).

What are ‘organic impressions’?

These are impressions that are a direct referral from a consumer; it is word-of-mouth 2.0, if you will (e.g., “Joshua Plant Became a Fan of Twitter”). These impressions have the least reach, but have the most impact.

Organic impressions nearly quadruple a campaign’s effectiveness across the board, when compared to a conventional Homepage Ad. According to Nielsen’s BrandLift research, purchase intent was merely 2% with Homepage Ad exposure, compared to 8% with Homepage Ad exposure with organic impressions. Similarly, ad recall’s numbers jumped from 10% to 30% when organic impressions were added to the mix.

It is evident that the key to effective marketing is to include interactive elements within the ad creative, such as a “become a fan” button or a “follow us on twitter” link, something that engages the consumer and allows them to broadcast their recent ‘fan-hood’ of a particular product or service to their audience (i.e. friends). Generally, this leads to a sudden bombardment of new “fans.” Even the chattiest of chatty Kathys could not spread news of a great thing as fast as residual organic impressions can.

The hardest part is that one cannot buy organic impressions, or force something into the viral market. The only way to do this is by offering a great product, targeted campaigning and brand integrity.

Social advertising is simply the beginning of Smarketing, community building is the next crucial building block in your foundation, but I will touch more on that in a later post.

Facebook: A place for revenue

Facebook board member, Marc Andreessen projected that Facebook would top $500 million in revenue for 2009; also, eluding that it could very well become a billion-dollar company within the year.

Namely, the reason for this sudden jump in revenue is because of Facebook’s transition into Social Ads over banner ads. These new ads target users with keywords in their status messages, profiles, etc, and gives the users the ability to “like” or “dislike” an ad; ergo, creating more precisely targeted ads to Facebook patrons.

A secondary source of income came from their “engagement ads,” which are ads with which users can interact, comment or send as a “gift” to their friends. Different companies sponsor these “gifts”, or users can pay for other more generic “gifts” – creating a virtual world of chatkas and sentimental gifts.

Facebook has really become the thought leader and innovator of advertising through social media, and they are one of the first social media networks to really figure out how to turn a [dot]com into a profitable and self-sustaining machine.

Because of this, and many other solid and profitable tools that Facebook has developed they “are definitely in no rush” for an IPO. “If you don’t need that capital, then all the pressures are different, and the motivations (to go public) are not there in the same way,” said the 25-year-old CEO, Mark Zuckerberg.

And Zuckerberg is certainly under no pressure to raise outside capital, since they just turned $1 billion in revenue, last year; up $500 million from Andreessen’s estimates.

Facebook certainly has a solid chance of turning into the next Google-esque cash cow. Time to start buying up some private shares!!