2. 1. The Lowdown.
Facebook is a social networking Web site, launched on February 4, 2004, by Mark Zuckerberg a former
Harvard student. The name of the site refers to the paper face books given to incoming students at colleges
so they can recognize people.
Here members create profiles that often contain photos and lists of
personal interests, exchange private or public messages, and join groups of
friends. Users often join networks, such as a schools, places of employ-
ment, geographic regions, or social groups.
Facebook has taken over MySpace as the most-popular social networking site in the world.
In October 2007, Bill Gates paid $120 million for a 1.6% stake in Facebook, valuing it at $7.5 billion. Not
bad for something that gives itself away for free, and makes no money.
2. Why do I need to know about it?
Two reasons. First, the sheer scale of people that use Facebook and what that means for more traditional
forms of communication. Second brands and organizations are able to use Facebook to spread their
messages, sometimes very effectively.
a) The numbers.
Facebook membership spread quickly initially from Harvard to the other Ivy League colleges, to universities
and schools all over the world. In September 2006, membership was opened up to anyone in the world age
13 or older.
Currently the site has more than 64 million active users worldwide. A
recent survey among American college students found that Facebook was
the second most “in” thing, tied with beer and sex, after the iPod. In the
U.S. alone, it is the most-popular Web site for uploading photos, with 14
million uploaded daily much more than Flickr, the most famous photo-
sharing site.
What started as a U.S. phenomenon has spread globally. In one month,
between October 26 and November 25 last year, Facebook’s membership
grew by 466% in Turkey, 171% in Israel, 109% in France and 87% in
China. It grew by 31% in Saudi Arabia, and 24% in Pakistan – and 18% in the UK. As Facebook continues to
launch more translation projects these figures are predicted to grow. Although new member sign ups have
leveled off in the US (resulting in some comments that Facebook was ‘over’), there is evidence to suggest
these users are spending more time than ever on the site.
What started as a way for students to chat and share things has grown into a popular destination for ‘silver
surfers’ with a jump of 12% in 2007 of Europeans over 55 years of age.
3. b) Bigger Than Google?
Facebook would like to think that one day millions of people will use Facebook as the instant access provider
for all their Internet needs making Google redundant. There is nothing to suggest users are about to abandon
Google, however Google has launched OpenSocial, a piece of software that encourages applications that work
on many different social networking sites which helps cover its bases.
c) Marketing on Facebook
What is interesting for marketers is that Facebook represents a new way for many people to communicate.
Users can post messages on their status for all their friends to see in their ‘news feed.’ This one-to-many
model replaces the more traditional email or phone call. Word-of-mouth marketing if done sensitively can
become quite successful as it seems that users are also very willing to let their friends know their likes,
dislikes, and thoughts, especially when it comes to music, films and books.
However, probably the most-common form of Facebook marketing is paid-for advertising. Interested parties
can typically purchase mass banner ads that everyone will see or create groups that users become ‘fans’ of or
buy ads that are embedded within the users’ ‘news’ feeds. Two more recent developments in Facebook should
be of note to marketers. First the launch of Facebook Platform, and secondly Beacon, the controversial part of
its ads system.
The Facebook platform lets developers who don’t work at Facebook create applications (apps) that users
download and install on their pages. This is interesting because many new businesses have been set up to
create these apps. Two famous external apps that have been very successful are ‘Scrabulous’, where users can
play Scrabble through Facebook, and ‘Jetman,’ a simple but effective video game. Some brands have tried to
create apps, but these have not been a huge hit yet (see case studies below).
In November 2007, Facebook launched a new part of its ads system named Beacon that published Facebook
users’ activities on partner Web sites such as eBay, Fandango, Travelocity, and Blockbuster to their friends.
This move raised serious privacy issues with many consumers protesting, which forced Facebook to backtrack
on Beacon somewhat and include more opt-in features. Facebook received further privacy criticisms when
some users tried to delete accounts and found it nearly impossible to do so.
Although the Beacon launch and subsequent bad press was fairly high profile it doesn’t seem to have had any
noticeable effect on advertising budgets.
d) Research Through Facebook.
One trend that seems likely to grow is for brands to conduct research through Facebook. In what is a very
simple and cost-effective system, brands can pay for a certain number of users to answer questions and then
have this data packaged and analyzed.
4. 3. Marketing Case Studies.
Target
Target created a ‘Dorm Survival Guide’ group within Facebook. Some of the applications in this group include,
Tip Me product marketing images, “Is it edible?” interactive animation, “Not your mom’s checklist”
eCommerce selector, “Find your soul furniture” customized product wizard, “Snoop for inspiration” design
ideas gallery and a “Good roommate” finder.
This group has 20,000 members, over 1,000 ‘wall’ posts, and 132 discussion topics. Most posts and discus-
sions were deemed to be positive. Target made sure they updated the group regularly with friendly and helpful
advice. They showed a good understanding of their Facebook community.
Other successful marketing campaigns have been Amazon’s ‘Bookshelf’ application that allows members to
see what their friends are reading and then buy those books in a click. Both Hillary Clinton and Barack Obama
have used Facebook in their presidential campaigns to great effect. In fact, Obama hired a former Facebook
executive to run his official online advertising campaign.
4. The thing to remember is…
.
Facebook was 2007’s success story. Although it has posted incredible numbers, it is not the answer to every
advertisers’ dream. As quickly as Facebook has acquired users it could lose users. MySpace was the runaway
social networking success in 2006 but was trounced by Facebook in 2007. There is nothing stopping another
company from coming along to steal Facebook’s market share, however for the time being, there is nothing on
the horizon.
While Facebook is still in its infancy, the marketing success stories on Facebook are a result of advertisers
carefully researching their audiences and taking the time to engage them regularly with useful information and
services rather than simply posting an ad or link and assuming users will do everything else.
Evidence suggests that grassroots organizations, charities, and political parties can use Facebook to greater
effect–through raising issues and creating debate, rather than promoting business-to-business products. It
may well be that in the future, the key for marketers will be to create products or movements that scream to be
talked about.
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