30 Nov 2009

What’s a Facebook Fan cost? When is $10 a better deal than 10 cents?

2 Comments facebook marketing and advertising

icon_facebook-300x300Nick O’Neill of AllFacebook.com wrote today about a service that sells fans for 10 cents. On the surface, sounds great, right?  You could have 10,000 fans for only $1,000.

But wait a minute.  What share of those fans are based in the US?  Probably very little, since the unsold inventory is for Turkey, Chile, India, and countries that don’t monetize.  If you want to see the top countries for Facebook, you’ll notice that Turkey is #3.  So just what “are” you going to do with those Turkish fans of your page? 

You might also consider the general quality of such fans. Are these incentivized fans, meaning that they’re fanning your page because they’re earning virtual currency in some game, and not really interested in your product or service?  Or maybe these are just random people who, for some reason, have nothing better to do than click on pages– don’t laugh, I ran surveys on Facebook that shown this to be true, as some people are bored and/or hate their jobs.  Whatever the case, are these truly fans of your page or just random people (or even robots) who clicked a button?

If you buy fans by doing CPM ads on the Facebook homepage, we’re told it works out to $5 to $10 per fan– thus, 50 to 100 times higher.  But is that necessarily more expensive?  With the Facebook homepage, you’re advertising among trusted brands– and you’re able to hypertarget in ways well beyond what is available even on self-serve.  For example, you can target all small business owners in the US who are male and over 30 years old.

If you’re paying at the rate card of $20 CPM and your ads work out to $5 per fan, that means you’re getting 4 fans per 1,000 impressions.  That’s decent, but by tweaking your ads as well as your targeting, you can perhaps get a 10x improvement on your performance.  So now you’re down to between 50 cents and a dollar a fan– and it’s a real fan.  Plus, you can show video and have interaction, such as polls– not possible in other ads on Facebook.

Considering that Google PPC is about $1 a click, paying the same price for a fan on Facebook as for a click on Google may make a lot of sense depending on the category you’re in.  For point of reference, when we sold installs on Facebook 2 year ago, we sold them for between 25 cents and a dollar.  Really, it was whatever we could get folks to pay.  And initially, we just sent all that traffic we couldn’t monetize with affiliate ads– so no US installs.  RockYou told us that they’re still selling installs (which are not the same, but similar to fans), so I’d love to hear experiences from other advertisers on what’s working for them.

30 Nov 2009

Unexpected ways that social media will ROCK your world

3 Comments social media
You’ve heard about the rise of Farmville on Facebook– 63 million users and growing, representing 20% of Facebook’s farmvilleusers, not to mention that Facebook represents 25% of pageviews in the United States.
But have you considered how game dynamics are beginning to permeate your life and that of your friends’ in ways that aren’t directly like video games?  Examples:
  • Frequent flyer programs are another form of “more than virtual” currency.  When I was at American Airlines, we saw grown men do nutty things for points.  For example, they would fly from Dallas to Austin and back on December 31st, just to keep their Executive Platinum status.  Other friends will pay $300 more per night for a hotel room just because they can earn points on it if they pay the regular price.  The inside joke at American was that it was amazing what people will pay for a free ticket.
  • Facebook itself is a video game: Consider the factors of game dynamics of collection, unlocking, immediate feedback, levels, randomization and you have the most addictive video game ever– that also draws in your friends.  Not a gamer, you say?  What apps are you playing?
  • Las Vegas: These guys are the granddaddy of points-based mechanisms.  I think of that city as a giant hotel chain that levies a tax on people who are bad at math.  But really– you have to appreciate how much effort went into every little detail of the casino experience– the exact sounds that slot machines make, the reward cards that give you “comps”, and the way you’re in general just sucked in.
Now consider examples of what the future holds:
  • time-management-main_FullMulti-level marketing: MLM has historically been known as a system where you sell out your friends to make a little more money.  At the worst, it’s a pyramid scheme — at the best, it’s a way for some people to make a nice side income. But now that social networks have made visible the connections between people– imagine what is possible when you unleash a points-based referral scheme on Facebook.  It’s already happening.
  • Local Internet marketing: We already talked about how BlitzLocal is building an army of local entrepreneurs , driven by an expert system, points, and real hard cash earnings.  Imagine playing a fun video game, but where you can make real money and help your friends who own businesses in real life.  Instead of fertilizing their crops, you can drive calls and use our system to learn how in a step-by-step way.  It’s already happening.
  • Time management: Imagine earning points to brush your teeth, get your oil changed, weigh yourself in the morning. Now, productivity management can be a video game that’s fun.  It’s your life, but like FarmVille.  Systems like lifehacker.com and GTD (Getting Things Done) apply points-based tracking to make the mundane enjoyable.  It’s already happening.
We have joked about naming our system BlitzVille, but I think that would send the wrong message.  Regardless, you can’t discount the power of points-based motivation, especially when compounded by the peer pressure effects of a social network that allows for video game-like measurement and leveling.
Now I’m off to harvest my peas before they wilt….

Dennis Yu


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