Update: Only a few brands will trial these new ads, after testing, will then be broadly released later in the year.
A few days ago, I had a private briefing before the press with Tim Kendall, Director of Monetization at Facebook, below are the findings, with specific recommendations for brands. As I get more information, such as results and data, I’ll update this post.
Web Strategy Summary (90 Words)
Facebook launched a new product called ‘Engagement Advertisements’ that encourages members to interact with the ads by leaving comments, sharing virtual gifts, or becoming fans. To combat dismal click through rates of traditional advertisements, these features emulate widgets and encourage users to increase member adoption, viral growth, and brand interaction. Brands will only succeed with these “WidgetAds” if they create content that puts community first, lean on new interactions, integrate with other tools, plan for the long haul, and change how they measure success –traditional internet advertising tactics won’t apply.
[Facebook’s ‘Engagement Advertisements’ emulates natural activities of members –in hopes to increase interaction, network spread, and brand preference]
Facebook, a Fast Growing Global Social Network
Facebook, noted as the largest social network, is on a growth rate to increase it’s active users to 90million active users today in August, 2008 up from 54 million aprox at the start of the year. While presumed to be of a younger college educated demographic, it’s not the domain of the young alone as the largest growth rates are educated white collar workers, over age 25. Facebook has global growth in markets such as 66% growth rate in EMEA, and 35% and 33% growth rates in Europe and Latin America, respectively.
Engagement Advertisements Integrate with Natural User Behaviors
Facebook’s innovative way of monetizing is unique, they were the first to launch a developer platform (F8) as well as the ill-fated Facebook Beacon, and are now launching with a new interactive marketing and advertising product.
[Facebook’s ‘Engagement Advertisements’ more akin to interactive marketing with a social twist: “WidgetAds”]
Unlike Beacon or Facebook Connect, both products intended to aggregate the actions on third-party sites (like Blockbuster.com) this new product called “Engagement Advertisements” is intended to nicely integrate with Facebook’s newly redesign profile and news pages. Early brands to trial this include: Paramount Pictures whose video commenting for Tropic Thunder ran two weeks ago –I’ve asked for campaign results. Future early adopters also include General Mills’ Betty Crocker which will have image commenting and the ability to ‘fan’, and video commenting for Addias, both to trial late August.
Engagement Ads provide three unique experiences
Rather than clicking on the ad and being whisked away to a branded microsite, these ads allow members to stay within the contained walls of Facebook and their social community. Engagement ads come in three major flavors:
1) Comment Style Ad: Members can now leave comments on these advertisements, much like wall posts. Brands that are focused on entertainment, new product rollouts, autos and apparel are well suited. The ad can show up to 4 comments per object, and the activity spreads to the users newsfeed.
2) Virtual Gifts Style Ad: Brands can now create virtual items that users can share, spread to each other. This wildly popular behavior within applications and Facebook is suitable for consumer products, entertainment, and some media.
3) Fan Style Ad: A play off the Facebook pages, users with a persona affinity for a product (like Apple) can become a fan, triggering a notification to their network, and could then tie on social ads. Will work great for established brands, like guitar hero, passion products, luxury products, or any brand with a rabid customer base.
Forrester Data: Social Networks foster communication, self-expression
With horrible click through rates (I’ve heard cases of .04 percent CTR) of ads on social networks, some brands prefer to focus resources elsewhere. Why the low rates? Our research indicates that youth primarily exhibit behaviors of communication and self-expression –not searching for products, looking at ads, or hunting for information.
Common Behaviors of Youth on Social Networks
See what my friends are up to: 86%
Sent a message to someone: 79%
Posted/updated my profile: 70%
Looked at profiles of people I didn’t know: 65% Sources: North American Technographics Retail And Marketing Online Youth Survey, Q4 2007, Forrester Research
This youth data supports that social network behavior is in fact, ‘social’ and these respondents are not seeking to find out about product information, nor learn about the latest products at a media site, product review, or a search engine like Google.
[Brands will only succeed with ‘Engagement Advertising’ if they lean on user behaviors like communication, self-expression, and social exploration –traditional internet advertising need not apply]
Knowing that the use case between social networks and product-focused sites is key for marketers to deploy successful marketing. For success, marketers and advertisers need to focus in on the key social behaviors, and integrate the marketing activities within the community.
Demystifying Facebook’s Marketing Tool Chest
Facebook’s marketing toolset is confusing, and many brands frequently ask me what is the current set, and how do they use it, here’s the current toolset as of today. Remember that when it comes to groups and brand engagement, the most powerful activity is for employees to actually participate in the community with their customers –not stand by the idle wayside. With that said, here are some of the other tools available to marketers to engage the Facebook community.
Engagement Ads: (new, and detailed above) allow community members to interact with the ads in the profile and newsfeeds –without leaving the Facebook site, increasing interaction, social spread, and brand engagement. Currently unproven, brands may not be ready for these types of new ads, until they change how they measure success.
Standard Advertisements: These Text and image ads can appear on homepage or profile pages, neatly integrate with the new redesign.
Social ads: Are helpful for brands to increase the velocity or acceleration by marketers, allowing them to buy ads that echo the behaviors “what did my friends do” of opt-in users. These primarily appear on the newsfeed, which will encourage spread to an individuals network. Some brands have been under fire from users who felt this was invasive.
Traditional IAB graphic ads: Advertising laden brands may still purchase the standard IAB skyscraper and banner ads from Microsoft both an investor and partner. With low CTRs, some brands have better places to spend their money for return on investment.
Event Feature: based pages allow marketers to promote events through viral invites, rsvp tools, and event rollups from media and community interaction. While a useful utility, for most brands that market on the web, this is often a side-effort, not the primary push.
Monetization of social networks continues to be a challenge, and Facebook continues to innovate, however for this announcement, brands and Facebook should:
To Succeed, Brands Must Learn Social Marketing
While costly, risky, and foreign to brands, the biggest missed opportunity for brands in social networks is to become part of the community, interact and build real relationships. Although we should expect interaction rates and viral spread to increase with engagement ads, brands should wait and see how these ads CTR perform. For those brands that are ready to forgo the risk, and pursue ‘Engagement Ads’ they should:
Be community themed: Ads created by the brand will succeed if the content is first focused on the needs of the community.
Rely on new interaction activities: The rules of the game have changed, the goal is to increase interaction within the community –not pull them offsite.
Approach with an Integrated Mix: Facebook offers many tools, ‘Engagement Ads’ shouldn’t go it alone, instead increase chances of success by involving other tools.
Change how they measure success: Brands must also change they way the measure success with these interactive ads, rather than weigh success solely on page views or referral traffic.
Marriage of Widgets and Advertisements offshoot: “WidgetAds”
Looking forward, this announcement helps to set in place how online marketing will start to evolve. Widgets have already become advertising units, and now these advertisements are starting to become widgets. Expect Engagement ads, and Widgets created by third parties to start to exhibit these behaviors outside of Facebook. Facebook Connect, Google Connect, and OpenID will bridge social graphs with interactive ads –springing forth a new generation of widgetads.
Although innovative, Facebook must focus on marketers
Although pushing interactive marketing, Facebook must hand-hold many brands with their frequently changing marketing offerings. Facebook must develop a client solution that will help optimize these tools with professional services based on data, results, and demographic information. Marketers can’t afford to experiment with their brand without the help of a trained and experienced group of social marketers provided by the platform.
The only caveat being that the experience of users, always, always comes first, I’ll point to others that cover this aspect.
Above: Over 1000 developers attending Facebook’s F8 Conference, picture above the developer showcase, photo from Brian Solis use with attribution by creative commons
Facebook’s Developer Conference F8
I attended Facebook’s F8 developer conference in SF last week, and met with many of the application developers on the floor, or at their booths. First of all, for those that had booths, it was expected they were demonstrating success within Facebook (who allowed them to showcase). The event itself was a real production, from food, drinks, sessions, panels, the night ended with a private conference from Thievery Corporation, a popular down tempo artist. I also recommend you read my take on what Facebook Connect means for corporate websites.
[“Applications are the Microsites of Social Networks”-Social Media Employee]
Opportunities for Brands Corporations want to reach communities and customers where they currently exist, and many realize that they are gathering in social networks. Brands have several options, but among them include using widgets (mini-applications) to reach them, there are two main ways: 1) Build their own application (or work with a developer 2) Sponsor, advertise, or latch on to existing successful ones.
Overview of Widget and Application Developers at Facebook’s F8 Event
I talked to as many vendors as possible, to understand what’s new, and report back to readers at corporations (who I write for)
Focusing on improving applications like Funwall (the top application with an estimated 1.6 million active users), Topfriends and Superpoke. In addition to deploying on Facebook, they are also on MySpace. Slide says they have a strong sales force, and goes direct to brands. Suggests that advertising on slide apps are greater than going with Facebook themselves. Why? Facebook is a utility, when most are interacting with an application.
Example: Brands like Estee Lauder has been working with Slide to advertise across superpoke.
Example: 10 million vitamin water ‘top friends’ drink on the first eight days. It’s not an ad, it’s an integrated part of the top friends experience. People sent them ‘virtual drinks’. Coke.
Adding more applications and helping more developers to monetize. Rockyou is now more like an ad networks, although Slide and RockYou were compared as competitors in previous months, their business models appear to be diverging. They’ve an active sales force that goes to brands to sell ads across their network,. As well as working with agencies.
Revenue model: Rockyou is doing a lot of ads and cost per install (CPI)
Example: Tropic thunder is an application that used, Superwall, and there was a tab added for top videos that promoted the movie.
Viral application developer mainly focused on Facebook (as the name suggests). Have about a dozen employees. Their current clients include apparel companies such as Adidas and consumer companies such as Pedigree and other Fortune 500 brands. Partnered on projects with RockYou, such as Supewall and Likeness. Price point for deals, Minimum for 30-50k range. They do guarantee the app is up and running, do not guarantee visitor numbers.
Example: Adidas, they designed the app, includes education in hourse, then they do a product spec. then they make the app and manages it for an ongoing basis. Its on fan page
This application let’s users review products of six major types: books, music, movies, restaurants, video games, beers. They’ve recently received 5 million in A round funding. Planning to monetize through advertising and affiliate marketing.
Example: Recently did a campaign with Sony, and promoted a movie (that was an book adaptation) they then used cross-movie promotion on books by that author.
WMS Widget Management system for creation workflow and ad management. This website let’s website owners (non-technical) to create a widget that can be embedded on Facebook. They are opensocial compatible. How they monetize? They have an ad on each of the widgets for tiered CPC, brands can pay to remove the logo of iWidget
Example: A brand that has interesting content on their site (that is frequetnyly update) can quickly and easily use iWidgets to reach the newsfeeds on MySpace, Facebook, iGoogle and Netvibes. Coming soon is Bebo and Hi5.
Wants to reach brand, media, companies. Can help increase exposure of brands on social networking platforms, motto: “Apps are the Microsites of Social Network”.
Example: BMW joyrides application, that lets users create and configure a car, and select friends and where they want to go. They worked with the agency to devlope, although core competency of social media is to leverage their network 95,000 installs. Also working NBC, American Gladiators
Claim to fame: a Social Marketing Company. They aim to build ads, build widgets, and advise.. these are really ‘interactive ads’. Current client base includes EA, Spore, Bank of America.
Example: Microsoft office did a campaign called ‘office poke’ that sent Microsoft branded pokes to each other with business humor. There were millions of pokes were sent. 700.000 installs and continues. Even though the campaign is over the application is downloaded and spread –over successful.
While not a Faecbook developer, I was able to spend time with the founders, as an outlook plugin, that makes outlook a socially aware utility. Recently, they announced a partnership with Linkedin so their social graph is displayed on Xobni, an outlook application. How they can make money? They are evaluating the different ways to monetize such as premium models.
Although startups exhibit great passion…
It’s really great meeting folks at startups, you can often see the fire in their eyes, hear the passion in their voice as they share their dreams. On the flip side, it’s also very hard when you see that they’ve commodity technology, are entering an already crowded market, or have rough marketing skills. I can see the pattern of companies that come and go, after attending so many STIRR events, startup events, and seeing the many early (seed) startups at the Techcrunch party two nights ago.
…Most startups will fail
Many of the early stage startups don’t make it, which is the natural selection process that we know as the market. The ones that are standing on their own (often A, B round stage, sometimes C) are mature enough to have a communications person, or hire a PR firm and eventually brief analysts. This means two things: 1) They’ve traction with their products, 2) They want to reach Fortune 5000, and are getting ready. I care the most about these later stage startups, as they are the ones that I may
Facebook embracing successful apps, punishing others
Mark declared in his keynote that providng a safe and successful experience for users is key, as a result, they are creating methods to filter applications that provide respectful user experiences that are non-invasive and protect users’ identiy first. Others will be penalized. Expect developers to clean up their act.
Developers struggle telling their story to brands
Applications/Widgets are very complicated story to tell to corporations, many corporate folks don’t “get it” and would rather rely on tried and true forms of web marketing like microsites or traditional advertising. More than one widget vendor told me they are having a hard time explaining their story to brands. There’s a lot of truth with this as when I give presentations to Forrester clients about social computing, I often have to explain what a widget is.
Business models rapidly changing
Unless you’re directly in the space it’s very difficult to keep track of who’s doing what, with low barriers to entry (400,000 developers currently exist) there are many entrants. As a result, this petri dish is constantly flexing and remorphing, business models, revenues streams continue to change.
Funding fuels more innovation –but doesn’t guarantee success
In Mark’s keynote, he said there was $200 million total of funding to developers from a variety of investors. This large influx of capital is allowing for many startups that may not have had the chance to launch products. A year from now, it will be interesting to see a string of dead applications that were once funded –but not adopted by users.
Many Developers Pan-Platform focused
While Facebook was the first to offer an open platform for developers, there’s been many containers that have opened up, as such, developers are seeking to widen their network by expanding to new communities.
I’m here in SF at the F8 developer conference sponsored by Facebook. While the primary thrust of F8 Facebook announcements was for developers, I mentally translate what this means for web strategists at brands at Fortune 5000s.
One key announcement is Facebook Connect which allows for authentication on 3rd party websites. Then users can visit third party sites, login with their Facebook ID, connect with their friends and update their Facebook newspage –all without visiting Facebook.com
[Facebook Connect will allow corporate websites to allow users to authenticate, interact, and share with their Facebook network –all without leaving the corporate website]
Essentially, the Facebook experience extends further into the web –beyond their walled garden.
Facebook Connect allows users to authenticate using their Facebook ID
Similair to OpenId (which coincidently was adopted by competitor MySpace) third party developers can allow website visitors to login to their website using their Facebook ID. This “Passport” system (much like what Microsoft tried to do) will let members leave comments on third party sites –as well as identify their friends on these sites.
Facebook Connect Will Allow third party sites to update Facebook Newspage
Facebook Connect allows applications, devices, websites to allow third party sites to embed a small piece of code on your site. Then, as users come to your site, (assuming they are Facebook users) could login to Facebook from your site and choose to share activities that would be shared on their newsfeed on Facebook.
Example via Techcrunch: “Mike Philips from Citysearch is taking the stage. He says they are launching a new site, where sharing information is a big piece. They are integrating with Facebook Connect. When a user looks for a hotel, restaurant, etc., Citysearch already has lots of reviews and data, but not a way to link up reviews from friends.”
[Boring, static corporate websites can now become social]
Recommendations for Brands
Interestingly, I talked to some Facebook employees, and they weren’t even looking as far as I was, (which means I’m doing my job well) so this prediction is something to still watch.
Brands should watch how this impacts the few launch partners first, let them sort out the bugs, and put this on the roadmap. Brands that have websites that have social actions (such as buying a product, rating, ranking, or leaving comments) should keep this in mind, as they can now extend the actions to Facebook streams.
Brands that are already trying to reach the Facebook audience (white collar workers and college students) should plan on experimenting with Facebook Connect as it can bring additional social functionality to corporate websites. First, start with use behavior: Use this interactive chart, the behavior is a cross between “Joining” (a social network) and “critic” (commenting, voting, rating) content. In this case, joining is a prerequisite for being a critic, so the actual participation level will be less.
Your logins could become less relevant if Facebook adoption continues to take off in particular markets, for example, brands that are already trying to reach this segment should be ready to adopt Facebook Connect. I ran this Tim O’Shaughnessy, CEO Living Social, who agreed this is a big change.
I realize that some don’t like this broad sweeping characterizations, but it’s important to look at the larger changes, we all realize that each individual is unique and different. Still with me? Let’s move forward and explore together.
I was speaking to a crowded room at Sun Microsystems a few weeks ago, and I posed this question to the room:
[Who has more information about Generation Y: Facebook or the US Government?]
I polled the room, and there was an overwhelming show of hands for Facebook being the dominant data holder. Next, I gave the example of my friend Teresa Valdez Klein (Pic: who I just saw in NY last week, and let her know about this upcoming post), who is an avid Facebook user and representative of Generation Y. She was an original Facebook user, she was a member while still in college. She self-expresses, she connects with others, and gives her opinion on Facebook and her fabulous blog.
Data found in Facebook about Generation Y
If you’re a Facebook friend of hers (I’m fortunate to have this honor) you’ll be amazed at how much information she shares. What does Teresa list?
Current city of residence
Dating status and preference
Birthdate (some include day, month, and year)
Pictures –lots of ‘em.
Psychographics and Interests
Next, she lists stories, pictures, media and articles that she likes, including some of her own comments
Interests (over 12 items listed for each of the following)
Favorite TV Shows
If you’re connected to her, you can see all the interests that she has by learning from her applications and widgets on her profile page. Some people put maps to where they’ve been, ideal characteristics in a mate/job/friends, and learn about where they’ve recently been on wall comments about parties, travel, birthdays, and other comments from friends.
Her Network Info
Perhaps the most valuable, is that if you’re a friend with her, you know her social graph. Then she lists all the folks she’s friends with, and if you’re connected to them you can see all of this info.
Data that we know the US Government has about Generation Y
I’m in no position to state what level of detail they have, but here’s my best guess:
What does the US Government have?
Demographics including age, sex, where you’ve lived.
Income, Tax information
Recent purchases, loans, mortgages
Travel status from TSA
If you were a person of interest, I’m sure they could easily focus in on you through ATM, Credit card, and cell phone activity (GPS or Cell location tracking)
Marketers drool to get this info, where members self-submit to Facebook
The interesting thing is that all of this content was self-submitted
, and while marketers are hungrily trying to give away sweepstakes and prizes to get you to register, joiners (what Forrester calls those who use social networks) opt in much of this data and more. Marketers must froth at this opportunity.
Of course, all of this leads to even more questions:
Now the real question is, does the Government have access (and use) the information available from our telecommunications companies, and/or Facebook?
So what’s scarier, the fact that Generation Y and others are willing to share so much online, or the fact that others may have access to this information.
Gap in Generation Ideology: Extroverts vs Introverts
Just yesterday, one of my colleagues (Gen X), who sends pictures of her baby to the local office expressed she didn’t want to bombard us with photos. I suggested she put her photos on Facebook, as it’s more of a ‘pull’ content strategy than ‘push’. She said it made sense, bit despite her knowing there are permissions and controls, it still made her uncomfortable for the “world to see”.
Back to you: Who has more information about Generation Y: Facebook or the US Government?
The market pressure to create technology products that protect or at least damage their impact to the environment continues to grow. Sustainability and green-tech campaigns are coming from nearly every tech company –esp hardware manufactures. Dell is no exception and launches this Regeneration campaign.
[Dell Leaned on an Active Artist Community In Facebook to Create, Vote, Self-Regulate what it “Means to be Green” Regeneration Campaign]
I’ve not spoken with the Dell marketing team, but it’s pretty obvious this is a campaign helps to help improve Dell products to be more eco-friendly, and of course, spur affinity torwards the brand from green leaning consumers, the ReGeneration site has more details.
Strategy Dell Computers, along with Federated Media (A social media marketing agency), and Graffiti Wall (A popular self-expression Facebook application), deployed an interactive marketing campaign that encouraged existing Graffiti artists to be involved in a contest that spurred a member created campaign resulting in affinity towards Dell. The artists were encouraged to ‘own’ the message, their creativity would spur a contest, and would continue to fuel the campaign.
Graffiti is a self-expression application in Facebook. It has popular (rated 4 out of 5 stars) Based on 242 reviews, and has 177,506 daily active users. Rather than creating a new application, this campaign took advantage of an application –and community–that already existed.
2) An art contest: What does Green mean to you?
Facebook members who used Graffiti were encouraged to join in a contest to win a 22″ environmentally friendly Dell monitor (appropriate for artists) to create art around the theme of “What does Green mean to you?” The contest lasted for one week
3) Engaged contributors spur theme
Over 7000 pieces of artwork were created and submitted to the contest. If you watch the replay of the art being created, you’ll see hidden messages (like easter eggs) from the artists as they discuss what green means to them. Many of the drawings had the Dell logo or the regeneration logo embedded in it. The Regeneration microsite promotes a few contributors.
4) Self Regulation
There were few negative pics that would detract from the campaign, as the community of existing artists will self-regulate and vote off pics that were not appropriate.
The campaign was a success, thousands of engaged members participated, created the campaign on behalf of Dell (similar to the Chevy Tahoe campaign a few years ago), and the community was rewarded. I don’t know for sure, but I’ll guess the majority of the campaign dollars were spent creating the microsite, then hiring FM, and working with Graffiti. The monitors, were likely less than a $1000 each.
What could have been better
When it comes to social media, the mentality of short lived campaigns should go away. Communities existed before a brand reaches to them and after the campaign stops. Marketers should plan for long term engagements with these people, rather than short two week spurts. There was clearly traction here and now’s the time to step on the gas and continue forward.
Secondly, the artwork created by the winners (and runner ups) should be included in future products, such as digital wallpapers, in the primary branding for Dell, and even the artists should be given an option to continue as sponsored artists. With the relationship forming, take it to the next level. Encourage artwork to be part of next generation green computers, with proceeds going to non-profits or back to the artists to continue forth.
Thirdly, the campaign was limited to Facebook, which isn’t the extent of artists on the web, as well as limited to other social networks such as Bebo or MySpace where similar communities can be found. The contest should have been created not just within the walls of a closed gardens, but also spread to the open web.
Unlike most marketing campaigns that deploy heavy ads, fake viral videos, or message bombardment, this campaign let go to gain more. Overall, this is a successful campaign as they turned the action over to the community, let them take charge, decide on the winners, all under the context of the regeneration campaign. The campaign moved the active community from Facebook closer to the branded Microsite, closer to the corporate website, migrating users in an opt-in manner that lead to hundreds of comments was clever. Well done.
Teresa Valdez Klein (Blog, Twitter, Facebook) delivers a great how to video, describing ‘how to use Facebook’s privacy features’. Apparently, the controls are non-intuitive and requires someone from the community to walk through it.
This is an important feature, especially for my three younger kid sisters who are mainly used to sharing their lives online –two of which don’t realize the impact it will have on their professional lives as they get older. (and unwanted attention)
I’m sending them this video, along with encouragement to protect themselves, I encourage you to send this to your Generation Y family members and friends.
-Create permission groups, one for family, ‘real’ friends, online acquittance, classmates, and colleagues
-Personal pics, content, involving parties, unruly or sensual photos should only be seen by those who were present (often friends)
-Be careful about the content that is left on wallposts, it’s not an IM tool, and should be used as a public blog, this area is very telling of what someone does offline.
-Remember that college and company recruiters now look at social networking sites to see what you’re made out of, so if you’ve not received that phonecall back, this could be one of the reasons.