Since coming online in 2004, Facebook has risen to the top of the social media landscape and asserted itself as the essential platform for connecting with people over the internet. Now, with over 900 million users, it is extremely popular and being used at an increasing rate as a marketing and advertising platform for businesses across all industries. Although, there is considerable worth for businesses on the platform, the value of it for these specific purposes varies greatly.
Within marketing, Facebook is excellent for branding, engagement, and growing reach, but with advertising it is not so cut and dry. Advertising on Facebook is great for some brands but it simply does not give adequate ROI for many others as evidenced by the timely withdrawal of General Motors’ (GM) advertising efforts on the platform. This is the essential point of the company’s disappointing IPO. The company has assumed an advertising-focused business model to capitalize on their massive stores of personal information in order to generate their revenue, but the nature of advertising on the platform cannot support the valuation that was seen in the run-up to the launch.
For a company that generates 82% of its revenue from advertising (first quarter 2012 figures), Facebook’s advertising model needs to be more robust across the board for it to be the sustainable long-term income generator that the initial valuation positioned it to be. The reality is their advertising model does not reflect this as the average quarterly revenue per user is only $1.21, compared to AOL’s $2.39, and Google’s $7.14. With that said Facebook will have value and indeed make money, but the significant variance in advertising ROI is the primary element that will prohibit them from generating the kind of advertising revenue that would justify their desired value.
Additionally, the very climate that gave legs to Facebook’s growth is also a threat to its long-term viability. Online social behavior is very dynamic and there is inherent vulnerability in Facebook’s product – its user experience. Facebook is built on user behavior and the experience they have with the site, and there is no guarantee that current positive behavior will continue. If behavior changes negatively over time and users engage with each other less or spend less time on the platform (as has been experienced in Australia), the value of ads will drop and the company’s worth will be degraded. Such “Facebook fatigue” has been seen in pockets already and there is potential for more of this in the future.
Similarly, the social media industry is constantly evolving in terms of what users want, what is possible, and the inevitable competition that arises. With advances in all facets of technology growing so quickly, from the functionality of the standard web, to mobile devices and smart TV’s, the way users engage with social media and what they look for will undoubtedly change. In this process, it is possible for strong Facebook competitors to arise offering something new and different, two elements that gave life to Facebook early on. What gives Facebook its strength is its popularity and user-base size, but these numbers are not set in stone as their competition increases. The recent rise of Pinterest, which recently became the fastest standalone website to surpass 10 million visitors-per-month, is a firm example of such competition as it offers something very different than what Facebook delivers. The argument is not that Pinterest, or others, will directly overtake Facebook but that Pinterest and other news platforms will steal time spent on social media away from Facebook, devaluing its revenue-generating ads.
Facebook certainly has a future, but it is likely not anywhere near as bright in financial terms as the build-up to its IPO would lead us to believe. Those looking to market themselves and gain exposure by engaging with customers on the platform, do so purposefully as there is significant return for the relative cost. For advertising, though, businesses should evaluate if it is the right option for them based on the products they sell and the type of conversions they are looking for. In the end, the future direction of Facebook depends on their ability to respond to changes in the social landscape as well as improve their advertising offerings and larger revenue generation model, a tall task given the discussed inherent challenges.
Although the term may sound like made-up internet jargon (and to some extent it is), “gamification” is a real trend and one that has become increasingly common in society. The phrase itself refers to the rising prevalence of game-like mechanics across non-game-related media in our daily lives. Regular users of mobile apps such as Foursquare are no doubt familiar with the concept: ordinary errands and chores help a person earn points and badges with which to compete with friends and, sometimes, random strangers. Occasionally there are prizes (often in the form of coupons), but most of the time that users spend on Foursquare is geared towards friendly competition.
Gamification practices drive the popularity of many smartphone and social network applications with constant socialization and feedback loops, or cycles that involve earning points and various rewards. A recent study done by the Pew Research Center focuses on the phenomenon in depth, with results showing that the integration of gamified elements into social media will increase exponentially by 2020. Although there is a great deal of debate regarding how healthy feedback loops are for user behavior, one thing is for certain – people enjoy being constantly rewarded for their online activity.
While most small business owners lack the programming knowledge to design apps such as Foursquare, this doesn’t mean they cannot take advantage of gamification. At its very core, the concept of a and gamification and feedback loops can be boiled down to a cycle of interaction and reward. Although most businesses may not realize it, many companies on social media see their highest levels of user engagement through practices that parallel those practices seen in gamified apps.
When looking for examples of this, a business owner can examine their most popular competitors and see this activity for themselves. Raffle contests, constant question and answer sessions, and community shout-outs are seen quite often on Facebook’s most heavily-trafficked pages. While a business needs to gain a rather respectable number of followers before such techniques can be employed, these methods offer fantastic ways for businesses to keep network users interacting with their listings for extended periods of time.
Another way that businesses can gamify their social media page is through community-driven competitions. Often used by movie promoters and other entertainment-based companies, contests in which users submit original video or written works are very popular. These submissions are usually voted on by the community itself and a winner is chosen based on the final scores. While activities such as these can take a considerable amount of time to manage, the result is a follower base that continues talking and thinking about a company throughout the contest’s duration.
Of course, many small businesses end up turning to experienced social media companies for contests of this magnitude. Aside from these competitions, companies on very demanding budgets can still employ feedback loop-based tactics to keep users engaged with their company. All it takes is a design that rewards followers for their behavior and a sincere appreciation of one’s user base.
The backing out with no indication of GM coming back isn’t going to leave FB a shattered entity. The $10 million in GM dollars is a minor portion of Facebook’s $3.7 billion. But as New York Times reporters mentioned, the dispute could get the ‘neighborhood’ talking, especially considering FB is about to go more public than previously expected (sharing 18% of company rather than 14%).
Before the public offering, some advertisers are wondering how effective the Facebook platform really is as an ad tool. An advertising exec observes, “It’s (Facebook) one of the most powerful branding mechanisms in the world, but it’s not an advertising mechanism.”
Analysts at Forrester research admit that GM isn’t alone in its decision towards investing in Facebook advertising. “My colleagues and I have spoken with several other advertisers who were already thinking of putting their dollars elsewhere. Now that GM has done so in such a large and public way, many of the fence-sitters will know that they’re not alone.”
Yesterday I sympathized with General Motors. It seems the reversal of Facebook-invested fortunes makes sense. Advertising is a game of ‘something-for-something.’ Advertiser dollars are meant to predate eventual sales. If GM believed ads would inspire sales, it would’ve stayed parked.
However, today I would like to introduce another avenue GM could have explored. Facebook’s ‘GM’ Mark Zuckerberg, is an industrious chap, one known for acquiring brands and people. I’m not saying GM would want to be acquired by Facebook or could be; but, could some sort of ‘partnership’ been had? These are two, large brands with some extra cash to spend if needed. It’s odd GM decided to part ways with such a buzz-worthy brand just before the latter’s IPO. Perhaps there’s more to the story then we know about.
Let’s drive down another avenue in the same neighborhood. GM states Facebook ads aren’t working for them. However, could another car brand, similar to GM, fare better? Those in online marketing know sometimes a simple modification or rearrangement of wording can make a difference in A/B testing.
All the stories are focusing on the separation; but, did GM release any sort of information related to ‘why’ (specifically) it wasn’t getting the return on investment? Is the real story about Facebook’s ad opportunities or is it that a huge brand like GM lacked the digital strategy despite having the $10 million to invest? How many of you out there think you could have done something positive with GM’s $10 million regarding implementing the funds into the Facebook ad system? Could have some savvy executive pitches been made, aligning GM a bit more with Facebook? Did GM drive into Facebook recklessly? And did it drive away too soon?
Although social media users swap countless IMs and posts across PCs and laptops every month, most people fail to realize the amount of direct messaging that takes place between mobile device owners through those same social networks. According to a blog published just a few days ago on the New York Times website, a number of recent studies all point to the conclusion that social media apps are quickly replacing standard phone SMS as a primary form of mobile communication. One particular report states that the amount of text messages relayed by cellphone owners in the Phillipines on a monthly basis has decreased by more than a third from 2010 to 2011 (down to 400 texts from around 660).
Yet, what does this all mean to the standard small to medium-sized business owner? Well, aside from the obvious fact that Facebook and Twitter are quickly replacing traditional phone texting, it’s important to recognize the ever-increasing need for a strong social network presence in the business world. As conversations continue to take place in greater frequency between social media users, companies want to be a part of that dialogue more than ever. It’s one thing to have a prominent link on a Facebook page or Twitter feed, but becoming a talking point in these back-and-forth messages is even more worthwhile.
Maintain an Undeniable Network Presence
Often a luxury exclusive to multi-million dollar corporations, wide-scale recognition on social networks is considered by many business analysts to be the ultimate goal of any social media optimization. At the end of the day, once the ad campaign is over and the dedicated bloggers, tweeters and status updaters have gone to bed, a business owner wants to rest easy knowing that all that hard work is still finding traction. While getting to this point can take months – or even years – of hard work, getting a campaign started on the right foot can make all the difference.
For the best social media results, small business owners and experienced marketers alike need to remain active when seeking out target demographics. By searching for interest groups, watching how the competition approaches their own campaigns, keeping up with industry-related news and always staying active with posts, a social media listing can establish the follower base and ongoing attention it needs to succeed. A dedicated effort on social networks can eventually establish one’s brand across a wide audience and keep traffic going to a page consistently.
Earn, and Keep, the Attention of Potential Followers
Getting communities on social networks to notice a company is not unlike being the center of attention at a party. Although companies can end up handling thousands of followers at a time, getting people to engage a business takes the right approach. Aside from constantly posting new blog content via Facebook and other social media outlets, companies can also remain relevant on social networks by interacting directly with users. In particular, running a contest is a fantastic way to get new followers to jump onto a business’ social network feed. Raffles and community-driven competitions for consumer goods and various leisure items often provide great incentives.
Of course, it can be difficult to secure these users once a contest has ended. Should a business try to use giveaways to bolster its online following, it’s important that it attempts to continually engage these new followers outside of the contest itself. A social media campaign manager should always try to ask questions and for feedback, do community spotlights or even feature posts from social media users. This type of community response rewards users for being actively involved with a company and provides a solid way to keep people following.
Supplement Social Network Activity with even more Activity
While the old adage of “less is more” certainly applies to social media campaigns, businesses still want to make sure their voices are heard. Although one should take care in not turning away users through excessive posting and in-your-face advertising, it’s a smart move to supplement campaign efforts through additional social networks. In particular, Twitter is an excellent avenue through which companies can spread additional links and updates for their other social media assets while not overwhelming followers on other networks.
Maintaining a strong presence in social media conversations is a true challenge that offers as many rewards as it does obstacles. Should readers have any further questions regarding the right practices for social media success, I can be reached directly at firstname.lastname@example.org.
The push is coming, or has it already begun? The push from Microsoft and Yahoo (but considering Yahoo’s recent issues, let’s concentrate on Microsoft and it’s Bing search engine) to stand up to Google and offer formidable competition has been in the works for some time. Now, Microsoft is not backing from the challenge, instead fully pressing on continuing to invest in their online services division, that which guides its search platform Bing, and trying to differentiate themselves from other search engines, namely Google.
This means that the decision-makers at Microsoft are confident they can eventually tip the scales and draw web searchers to their platform. This is serious confidence considering the online services division reported operating losses of $2.6 billion for its last fiscal year, according to a recent New York Times article by Nick Wingfield. Part of their plan in mounting a surge was announced just at the beginning of the month in that they are going to integrate social media data into their search results. This information is not just any social data, however, it is social data from yes, a range of sites, but namely from Facebook. Sound familiar?
Google introduced its “Google Search, Plus Your World” functionality as Google Search began integrating social data into its search results (primarily from Google+) causing a stir for several reasons among them being a significant change to the user experience and the issues associated with potentially privileging its own social platform over others in search results (considering it is the dominant engine used). In this process, Google and Facebook are pitted against each other as Google is ramping up its Google+ to compete with Facebook to amass social/personal data. So, now it appears Microsoft and Facebook are teaming up to add an additional functionality to Bing that mirrors Google’s latest search functionality.
According to experts cited in the NYT article, Microsoft has integrated in the social data quite well. They have been very concerned with integrating the data without cluttering the search results pages, making multiple changes through various tests. The apparent result: a crisp-looking search engine results page (SERP) that has a neatly organized sidebar of social media results where users can post questions to the friends who have posted relevant information without leaving the results page.
The move to integrate social data into Bing search results from Facebook and others and the similar steps from Google previously have clear implications for those conducting online marketing and SEO campaigns:
- Businesses must get a social presence and optimize it. The longer businesses lack a presence on social media, the longer they will miss out on opportunities to engage with customers online, widen their audience through greater exposure, and push greater business and conversion.
- Marketers need to leverage social media with the other marketing operations of the company. Linking promotions to their social presence, bridging traditional media to this social presence, and coordinating the different accounts themselves to strengthen each other, along with optimizing it with SEO- friendly practices will bring the return businesses are looking for.
The apparent alliance between Microsoft and Facebook is intriguing and will be something to track as the way it plays out, and the way that Bing performs going forward, will greatly impact the future search landscape.
As my fellow writers and I have recommended time and time ago, it’s a good practice for companies to use social media to supplement their other organic SEO activity. Due to the ever-increasing number of users found on networks such as Facebook and Twitter, many start-up or entrepreneur company owners are sharing their own original content effortlessly with the masses. Businesses that remain active with social media sites consistently see better traffic to their online properties than those companies that don’t retweet or post status updates. It’s an exciting time for small and medium-sized businesses to be sure, but many companies are finding that their success is somewhat limited and they don’t know why.
Although everyone touts the potential of a fully-engaged social media audience, there is also a general acknowledgement that knowing when to post a link can greatly determine the reach of one’s content. Obviously status updates about trending topics are most successful when people are not away from social media while celebrating a holiday or major event. In addition to paying attention to major events, getting a gauge on when social network users are likely online during the course of a given day is an important skill for any business owner or campaign manager to have. While developing a sense for user activity levels can be tricky, a new report released by Bit.ly can help give budding social media companies some help.
Traditional Social Media Posts Hit their Stride Early
Recent statistics from the popular link-abridging website show that popular social networks Facebook and Twitter actually see the most link activity during the earlier parts of the day. According to the site’s latest blog post, the two social media sites see their link click-through rates peak in activity starting in the morning and topping off sometime before 4 PM EST. In particular, Twitter link activity is at its highest levels between noon and 3 PM EST on weekdays, while Facebook does well during a similar timespan. Both networks see greatly diminished CTRs starting Friday and going through the weekend.
Image-Based Social Networks do well in the Evening
The Bit.ly report also states that image-centric social media site Tumblr sees the most users during the evening. From the end of the work day to around 10 PM EST, the CTRs for those links generated by Bit.ly often see their highest levels. According to the blog, Monday and Tuesday nights actually see strong activity. Friday nights are also great nights for posting on Tumblr, with heightened activity a result of the oncoming weekend.
Using these Reports Wisely
The statistics reported by Bit.ly provide more guidelines that anything else. SMB owners and social media campaign managers should always remember that the industry they work in and major events should be the prime indicators of when links should be distributed on social sites. On the average day though, the aforementioned timetables for posting should give those users who are unsure when to post their links a little extra direction.
For additional information about efficient link-sharing on sites like Facebook and Twitter, I invite readers to contact me at email@example.com. I am more than happy to reply to any inquiries they may have.