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Clara Shih On The Facebook Era (Part 4)

Posted on Sunday, Apr 12th 2009

By Guest Author Clara Shih

Clara’s series ends with an excerpt from Chapter 5, “Social Network Marketing”.

“Facebook advertising doesn’t feel like advertising because it comes from your friends.” –Tim Kendall, Director of Monetization at Facebook

Marketers need to be where their customers and potential customers are, and increasingly, this is on social networking sites. There are hundreds of millions of active users across sites like Facebook, Hi5, and MySpace. 2.6 billion minutes are spent on Facebook each day. Social networking is a rapidly growing global phenomenon sweeping across every continent. According to Alexa, two social networking sites (Facebook and MySpace) are among the top-five trafficked sites in the US, and four social networking sites (Facebook, MySpace, QQ, and Hi5) are among the top-twenty trafficked sites in the world.

Meanwhile, enhanced distribution on the Internet has resulted in information overload, making it difficult for businesses to differentiate their marketing messages and regular people to find what they’re looking for (as we talked about in Chapter 3). “Hyper-targeting” and social filtering solve this problem. These aspects of online social networking are enabling brands to engage the right people in the right conversation at the right time. They are enabling people to take greater control over their web experience and use friends to find content that is interesting and important.


Figure 5.11

Social networks are emerging as a powerful and sophisticated new kind of marketing channel. Marketing is becoming precise, personal, and social: social networking sites are giving marketers new abilities to hyper-target campaigns using profile information, engage community members by tapping into social capital within friend groups, and systematically cultivate word-of-mouth marketing across their existing customer base. The opportunity for social network marketing can be equally compelling for B2B, since B2B decision makers have social networking profiles that can be targeted and advertised to. For many products and services, recommendations and referrals from trusted friends and colleagues are important factors in deciding whether to buy.

 Figure 5.11 is an example of a social network ad that takes advantage of hyper-targeting and social distribution. This ad for men’s pants is hyper-targeted toward males between the ages of 25 and 49 who live in New York, San Francisco, and Los Angeles – the audience identified by the advertiser as most likely to purchase this product. The ad uses a Facebook friend of whomever is viewing the ad to try to appeal to him socially.

Hyper-targeting

Hyper-targeting (also called microtargeting), the ability on social networking sites to target ads based on very specific criteria, is an important step toward precision performance marketing. Facebook and MySpace are leading the charge with sophisticated targeting tools. Their advertisers can target member profiles based on filters like location, gender, age, education, workplace, relationship status, relationship interests, and interest keywords. For example, MySpace members who recently changed their relationship status to “engaged” might be shown ads for wedding planning services.

Here is another example. If your company’s product is meant only for men in California between ages 40 and 55 who are interested in golf, you can for the first time design an ad campaign that gets shown to exactly those people only. In effect, both you and the social network waste fewer ad impressions because the targeting is so precise.

Hyper-targeting is possible because of the information social networking members elect to share on their profiles. In order to establish their presence, express identity, and emotionally connect with friends, people reveal a tremendous amount of demographic and psychographic information. For example, it is standard to share gender, birthday, hometown, employer, college, and high school information, and not unusual to share relationship status, political views, religious beliefs, activities, interests, and favorite music, TV shows, movies, and books. All of this information is fair game for ad hyper-targeting. Even if certain information, say birth year, is hidden based on privacy settings, Facebook and MySpace still use the information for targeting ads. As a result, ad campaigns are reaching a new level of precision and efficiency.

Social Distribution

Hyper-targeted ads, engagement communities, and branded apps are tremendous innovations—but they become even more powerful when you combine them with social distribution. Especially in today’s crowded marketplace—the average American is exposed to over 3,000 advertising messages each day—social distribution from customer to customer rather than from vendor to customer is by far the most affordable and effective way for brands to stand out.

Among the social networks, Facebook has been the clear leader in social distribution. Facebook News Feeds, which broadcast members’ recent activity to all of their friends, have transformed how messages spread by automating social distribution of information. What would have been isolated incidents before become highly publicized updates on Facebook. The new mantra is don’t advertise to people, advertise between people. Recommendations and referrals from known and trusted friends can be powerful influencers of purchase decisions.

Read more at thefacebookera.com.

This segment is part 4 in the series : Clara Shih On The Facebook Era
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