Facebook > WSJ + Chicago Tribune + LA Times + Chicago Cubs + YouTube

facebook microsoft deal
So you still don’t think Facebook is a big deal? Today’s Wall Street Journal reports that Microsoft (MSFT) has agreed to purchase a 1.6 percent stake in Facebook for $240 million. That pegs the overall value of Facebook at $15 billion.

In the real estate world, when setting a market price for a house my friends Ben Martin (or at least the people in his Virginia Association of Realtors) and Daniel Rothamel look at what they call “comparables.” They ask, “What price have similar houses in the neighborhood brought recently?” Let’s look at the comparables for Facebook. In roughly the last year:

  • Rupert Murdoch’s Newscorp paid $5 billion for the venerable Wall Street Journal
  • Sam Zell bought the Chicago Tribune (which owns the Chicago Cubs and had earlier purchased the Los Angeles Times), for $8 billion
  • Google (GOOG) gobbled YouTube for $1.65 billion
  • Avista Capital acquired the Minneapolis-St. Paul Star Tribune (and a few blocks of prime downtown real estate) for $530 million.

Add them all together, and they’re barely equal to the valuation Microsoft placed on Facebook.

Which just shows that for Facebook there really aren’t any comparables. Why?

  • Facebook has 85 percent of college students in its network, and a similar percentage of recent graduates. At a conference I attended earlier this year, I heard that David’s Bridal has found that people spend more money in the five years after they get married than they do in any five-year period. Facebook has the ability to help advertisers reach these people in their golden spending years. If, as David Walker said about Medicare, “Demographics are destiny,” Facebook’s future is bright indeed.
  • Facebook’s growth in other demographics is similarly astonishing. In adding 200,000 new users per day, Facebook ran out of college students to bring in a long time ago. The great majority of the growth this year has been in older adults and internationally. Shel Israel said yesterday that in Israel, where the primary language is Hebrew, Facebook now has nearly 100,000 users, which is up 33 percent in the last 9 days.
  • Facebook users don’t (mostly) just sign up for an account and forget it. Over half of its users visit the site at least once a day, and the average time spent on Facebook is 20 minutes per day.

I will confess that when it was reported last year that Mark Zuckerberg had turned down $1 billion or more for Facebook, I thought he would regret it.

That was before I actually tried Facebook. If you haven’t tried it, you should. Shel Israel says it’s the most beneficial professional networking tool he has ever used. My other friend Shel, Shel Holtz, and his partner (in the podcasting sense) Neville Hobson, in their For Immediate Release podcast for PR professionals, talk about Facebook in every program. They’ve joked that they have a rule that they have to mention Facebook at least once in each of their twice-weekly podcasts, but the reality is Facebook is that important.

Steve Ballmer obviously thinks so. And if you’re in sales, marketing, PR or have any need for professional networking, so should you.

Lest Shel Israel take me to task for that last line, I want to emphasize that you need to understand Facebook and social networking, and not see it as just another channel to force-feed your marketing messages to a captive audience. They (we) are not an audience. We’re creating content, too. Markets are conversations, and that involves both speaking and listening.

Microsoft is betting big that Facebook is where a lot of those conversations will be happening.

TechnoratiTechnorati: , , , , , , , , , , , , , , , , ,

Congressional Creativity

town hall meeting creativity

Social media tools are just that: tools. What’s needed is creativity in how you use them to accomplish your organization’s goals. “Off-label” uses can be among the best uses, because they involve creative thinking to solve a business problem.

Here’s an “old-media” illustration of the concept from one of my previous jobs, when I worked for a member of Congress. Members, as they’re known, typically hold town hall meetings in the communities they serve. (For the humorously senseless, that previous link is a parody, not a definition.) Depending on the size of their congressional district, they may get to each community once or twice a year.

Traditionally, members have used the franking privilege (which lets them send mail using their signature as the postage stamp) to send postcards or letters to each household in the community. These notices must be approved by a bipartisan group called the Franking Commission to ensure that they aren’t political or campaign-oriented, but are related to the member’s official duties.

Some members also used commision-approved newspaper ads to announce their meetings.

One problem with town meetings is you typically get the same crowd each time you go to a community, especially if the meeting is during the day. Or rather, the same non-crowd. Often it’s just a handful of people, and they are either retired or political partisans. Not that there’s anything wrong with either category, but it doesn’t represent the broad cross-section of the population.

One day I heard that another member had received approval for a different approach. Instead of using mailers or newspaper ads, he got a script approved for radio ads to announce the meetings. Attendance in his district had been somewhat better.

That gave me an idea: what if instead of just advertising the meetings on the radio, we held them on the radio?

So was born the Radio Town Hall. We would purchase ads in the week before the meeting to announce that we would be having a live call-in town hall from the studio of KXYZ, and the station would donate the hour of airtime for the actual meeting as a public service.

This was quite successful; we typically had more callers during the hour than we had total people attending the in-person meetings. The callers also were more diverse and reflective of the community population. We knew that we were multiplying the number of people who were able to at least listen to the proceedings from home or work. And it was less expensive than sending a postcard to every address.

I’m not sure whether I was the father of the Radio Town Hall; someone else may have done that first. But I think I can claim paternity for another innovation: the networked, district-wide radio town hall.

One of the drawbacks that remained with the local radio town hall was we still could only be in each community twice a year. We wanted more frequent and regular interactions with constituents. So we approached nine stations from across the district and asked: “What if we did this every Friday for a half-hour?” We could give a brief update on the week’s proceedings in Congress, and then open up the phone lines for questions or comments. We hooked the stations together by a phone bridge to an 800 number.

The important point of this example is that it didn’t involve any technological breakthroughs. It was just a different way of using technology that hadn’t changed much since the break-up of AT&T and deregulation of phone services. The pieces were all there. It was just a matter of reorganizing how we used them.

The possibilities for such creative combinations in the Web 2.0 world are amazing. Blogs through WordPress.com or Blogger, social networking sites like Facebook and MySpace, photo-sharing sites like Flickr, microblogging tools like Twitter, Jaiku and Pownce, VOIP services like Skype and transcription services like Jott are just some of the examples. They’re all free. And they increasingly can be mixed and matched so you can use them together through APIs that let them interchange data.

I’ve been out of the government service arena for about seven years now, and obviously the internet has become increasingly important in political campaigns, from macaca to online fundraising. All the presidential candidates have Facebook and MySpace pages. Barack Obama has 144,799 supporters on Facebook, and has an application that put his most recent campaign video on your personal profile. Hillary Clinton has just over 42,000 Facebook supporters. Rudy Giuliani trails badly in Facebook, with only 2,700. John McCain has 10,300 and Mitt Romney seems to be the Republican leader, at 17,679 supporters plus this Students for Mitt application (not many users, though.)

I would be interested in hearing how or whether any of these web 2.0 tools are being used in official government capacities, i.e. for taxpayer-funded offices, instead of just campaigns. It seems all of the politicians use Facebook for their campaigns, and it’s interesting that the “friends” are called “supporters” instead (and the 5,000 limit Robert Scoble encountered obviously doesn’t apply.)

Does Facebook charge these campaigns for that kind of account? If not, maybe Scoble should run for something so he could add more friends!

So how are you applying and combining these tools in creative ways to accomplish your business goals? Here’s a compilation of my thoughts on Facebook business use.
TechnoratiTechnorati: , , , , , , , , , , , , , , , ,

Facebook in USA Today

Facebook in USA Today
Many in the mainstream media have written articles recently about Facebook that are helping to make it, well…mainstream. Both Newsweek and TIME have had major articles in the last couple of weeks, and here are excerpts from a couple more stories about Facebook in USA Today from the last few days. Click the title links to read the whole articles.

Travelers arrive at Facebook

Since opening its virtual doors last fall to anyone with an e-mail address, Facebook has graduated to more than 37 million users, and the 25-and-over crowd is its fastest-growing demographic.

A key factor in the site’s rapid ascent: development of more than 3,000 free, third-party software applications that let Facebook “friends” trade everything from travel tips, Scrabble scores and books they’re reading to hedge fund advice via a fantasy stock exchange.

The most popular of Facebook’s 100-odd travel applications, downloaded by more than 2.6 million members since its launch by a freelance Web developer in June, is Where I’ve Been — a map that highlights places users have been to, lived in and hope to visit. The interactive map includes a smattering of facts for each destination.

Facebook plans to offer targeted ads

Social-networking site Facebook is ramping up efforts on a major new advertising plan that would let marketers tailor ads for the millions of Facebook customers who provide a mountain of information about themselves on the site, according to major advertisers and analysts briefed on the system.

But the potential volume of ads, and their proximity to the personal content of customers, could stir privacy concerns, say tech and advertising analysts.

Facebook’s new format may display more prominent ads on the news feed — a list of updates on the activities of a user’s Facebook friends, according to those briefed on the new system. Facebook ads also currently appear as banners on the left-hand and bottom borders of Facebook pages.

Eventually, Facebook hopes to refine the system to deliver ads based on users’ interests, says Debra Aho Williamson, senior analyst at market researcher eMarketer.

Obviously, Facebook has to walk a fine line. If it does this right, it will be seen as a service, helping people find goods and services that interest them. It reminds me of David’s Bridal and its arrangements with various vendors that provide special offers to its wedding-dress customers. The feedback I heard at a recent seminar was that brides-who-had-been were thankful to David’s for “all the bonus goodies you get when you buy your wedding dress there.”

If Facebook does the advertising tastefully, in keeping with its current understated approach, it can create similar feelings among its users. It will be much better if it can grow its page views and time spent, with a light sprinkling of ads, instead of killing the golden goose with a heavy-handed mix. Better to triple the user base in the next year (which is not at all out of the question based on current growth trends) with the same advertising level than to ratchet up the advertising and slow the growth.
TechnoratiTechnorati: , , , , ,

Fruitful Facebook YouTube Advertising

Fruitful Facebook YouTube Advertising

Susan Reynolds drew this Fruit of the Loom video with Vince Gill to my attention, and it illustrates several important points about marketing and advertising and how it is changed with the advent of social media and networking, in the era of TiVo, YouTube and Facebook.

[youtube=http://www.youtube.com/watch?v=OjGruchlKGw]

  • In the post-TiVo world, there is a great premium on great creative in advertising. You may have seen the :30 version of this ad on TV, in which Mr. Grape’s cell phone rings as the music is swelling to its peak. If ads are interesting to watch, people are less likely to skip them.
  • Great creative should draw attention to the brand being advertised, not just to the creative itself. How many clever ads have you seen that make you laugh, but you can’t remember what product or service was being advertised? Anybody over age 30 is likely to recall the Fruit Guys from previous Fruit of the Loom advertising. So even without an explicit underwear message in the TV :30, people get it.
  • Viral Distribution is Free. The full version of the ad is over two minutes long would be prohibitively expensive on TV, and yet it costs Fruit of the Loom nothing for distribution through YouTube.
  • Facebook multiplies the YouTube effect. YouTube placement makes it easy for people to recommend a video commercial to friends, and in Facebook it’s almost automatic. I had seen the :30 a few times on TV, but then saw in my Facebook News Feed that Susan had posted it on her profile. I commented on it and also posted it to my profile, which placed it in my mini-feed and in the News Feed for my friends. I also sent it directly to 9-10 of my friends. As my friends interact with the video in Facebook, the news will spread virally to their friends as well.

Everything about this video is done well, from the soulful playing of the Fruit Guys to the groupies mouthing the words as they gaze at the performers to the touching home videos. It isn’t slapstick viral and it probably won’t get millions of views, but this is about underwear, after all. You need to have reasonable expectations.

Note that every step after putting the video on YouTube was free for Fruit of the Loom. As of right now the two-minute version has been seen 5,300 times on YouTube. It will be interesting to track how this does over time.

Update: Here’s another good Fruit of the Loom music video from last year. Between the two versions I’ve seen on YouTube it’s had over 90,000 views so far.

[youtube=http://www.youtube.com/watch?v=JLj4YgDiRW4]

TechnoratiTechnorati: , , , , , , , , ,

Integrated Web Marketing Tidbits and Tips

A continuation of this post on integrated web marketing, with some interesting tidbits and tips:

  • 75 percent of viewers can’t remember a URL from a TV spot, so you need to make it easy to search for and find you once you’ve piqued their interest.
  • It makes sense to buy misspellings of keyword searches, too…these go really cheap. Also incorporate buzz words from TV spots. And if you bid on longer and more descriptive phrases the cost for each will be lower, too…and you’re more likely to get people who are more pre-qualified for your product or service.
  • Kristine pegged search engine share at 62 percent for Google, about 20 percent for Yahoo, perhaps 10 percent for MSN and minimal for Ask.com
  • One interesting idea used in the distilled spirits industry was buying keywords to drive searchers to an online news story about a given brand of vodka winning a NY Times taste test. Google won’t sell to hard liquor sites. So just because you buy the ads doesn’t mean you have to send the traffic directly to your site; you can send to a site that speaks favorably about you.
  • comScore has a panel of 2 million people worldwide who have agreed to be continuously and passively observed when they are on the net.
  • 83 percent of the sales impact of search is latent or offline. In other words, people may not buy right at that minute, but search does affect their eventual decisions.
  • 31 percent of internet users regularly delete cookies. You can get the comScore cookie deletion white paper here.
  • In calculating the ROI on search campaigns, you need to remember that for every $1 spent directly online, another $1.20 is spent latently online within the next 60 days, you should factor in $.40 for cookie deletion, and $4.00 for offline sales.
  • Incorporate keywords/creative supporting PR, viral, word of mouth efforts and regional events
  • Make images part of press releases, with appropriate tags
  • Closed captioning for video makes it searchable. You may want to put this text in the metadata.
  • The example Kristine gave for Engagement was Dexter on Showtime. Among other things, they created an on-line game. Fox did something similar with Drive, not a great show, but the director Twittered his comments and insights during the debut.

Again, I wish I had been able to stay for the whole presentation, but maybe others who attended can fill in more details.

TechnoratiTechnorati: , , , , , , ,