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Kelsey ILM Coverage: Facebook Pitches Local Story
By Kirby Winfield | November 29, 2007
Facebook VP of Product Marketing and Operations Chamath Palihapitiya shared a powerful message for local advertisers today at ILM: We’re as big as the US newspaper audience, we’re doubling every six months, and you can setup a homepage in five minutes and reach our users for free.
In addition, the message to the big three search engines and the IYP’s was clear: We’re here, we’re huge, get used to it.
With the launch of its “webification” initiative to drive SMB’s online by providing free, simple, frictionless setup of a multimedia and social networking enabled homepage, as well as a paid advertising and analytics platform for any advertiser, Facebook has become the largest new player in auction based local advertising.
First, the numbers: Facebook claims 55M “active” monthly users. 250K new users join each day. Users average 40 page views per day. Facebook will exit 2007 on a run rate of 1 trillion page views for 2008. 50% of users use Facebook every day. The ad platform has a minimum daily budget of $10.
Facebook is spinning its advertising opportunity as “demand generation” (traditionally achieved in local via print, radio, tv and outdoor, where the consumer is in a passive communitication mode) in addition to “demand fulfillment” (the PPC search model where the user knows what they want and clicks a link to purchase it). It is wise to do so, as the clear advantages of the search PPC model are missing from its chatter/upload/share-based value proposition.
Instead, Facebook focuses on the facts that a) they know a lot about each user - not in aggregate or based on comScore-style sample-based demographic profiling, but based on who users actually are, where they actually live, and what they actually do OFFline; b) people trust people - trusted word of mouth local business recommendations are traditionally the key driver of offline decision making and will be online as well; and c) their advertising platform is really just a way to “amplify” positive word of mouth about your business.
So, via the “push” mechanism of its News Feed (where users see the latest actions and content from their friend network dynamically updated on their start page), Facebook can enable users to share information about and links to their “friend” businesses. If I visit and enjoy a local restaurant, and I share this fact via my Mini Feed (which feeds into the uber-News Feed), my friends will see this and be able to interact with the restaurant’s Facebook page if desired.
And if I really want to get the word out, I can choose to pay to expose an endorsement to as extensive a network as I wish, sliced however I want (demos, pychos, behavior, location etc.). So now, if the restaurant buys in, my restaurant endorsement gets blasted to all Seattle residents on FB aged 24-35 who have reported dining out in the last month.
Pretty powerful stuff, for local and national advertisers alike. FB claims their analytic platform will, aside from providing transparency into the usual metrics, also show a “Pulse” report, mapping the increase in “conversation” about the advertiser/brand/product to the dollars spent.
Concerns? Well, I would imagine privacy will be at the top of the list for users. And clutter; this is somewhat like softcore spam - imagine if every time your friends made a local purchase an email shot into your inbox. But Google has proven that a killer application and a trusted brand can overcome the perceived (by users) ill efffects of commercialization. FB should be able to do the same.
The two big questions are: is the ROI there, and will advertisers come? If the answer to the former is yes, the latter is a no brainer.
Topics: Local Advertisers, The Kelsey Group, Events, Community, Content, Advertising, Uncategorized |