Make Money Online

Use CPM (cost per impression) to test your Facebook ads instead of CPC (cost per click). When testing your ads using CPC it diverts the focus from testing the actual ads to testing the landing page or pages. There will be plenty of time to test landing pages but right now we want to test which ads produce the lowest CPC.

Pay Per Click equals 1.08 USD per click

Pay Per Impressions equals 0.38 USD per thousand

Remember, using CPM to first test the ads, you can determine what the true CPC rate is based on the actual performance of the ads. Testing your ads this way requires a tad bit more effort but will pay back big time when you save some of your budget testing the ads.

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Another Facebook Advertising Tip

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It would be easy to dismiss Places as Facebook’s attempt to simply keep up with the Foursquares and Gowallas of the world. But the recent announcement that Places will incorporate a directory of 14 million businesses proves Facebook has other ideas, and they’re all about business.

Localeze, the largest business listings identity management company for local search, announced that its 14 million record “Enhanced Business Registry” will be featured on Facebook Places. Facebook will use Localeze’s premium business content, including nearly 600,000 business-verified and managed listings, which have been enhanced directly by local businesses, to offer accurate data for people to easily share where they are with friends on Facebook, find friends who are nearby, and discover new places from a mobile device.

Earlier this month, Localeze signed an agreement with TomTom to provide the same local information to TomTom GPS users starting in 2011. According to PC Magazine, “the combination will undoubtedly help TomTom compete against companies like Google, which already has a database of local POIs [Points Of Interest] and a free Google Maps Navigation app for smartphones, to boot.”

Indeed, if you read into it, the same competitive positioning could be true of Facebook, who more and more seems to be gearing up for head-to-head combat with Google.

Jeff Beard, president of Localeze, said that by using its listings,

“Facebook will provide an unsurpassed user experience, limiting the possibility of people entering an incorrect or incomplete business name, address of phone number when checking in.”

Beard adds that he views Facebook as “an important piece of a local business’ footprint giving them more visibility for current and potential customers.”

Already, social networking experts are recognizing the business applications of Facebook Places. For example, David All, writing in The Huffington Post, says a business can “claim its Place” on Facebook Places now “so that you can manage how it’s being read by those who are checking-in or are curious because they’re seeing their friends check-in at your Place.” He advises businesses to “keep tabs on the way your competition is using Places and be ready to make counter-offers via advertising.”  All recommends being proactive by asking visitors and staff to participate by checking in, and asking clients or top customers to “give a review of your place.”

The Facebook Places and Localeze connection is yet another piece of solid evidence that Facebook is aligning itself with the interests and needs of local businesses. Facebook is creating a valuable business-oriented utility that goes far beyond the original casual friend-to-friend connections. The bottom line is Facebook Places isn’t just for fun; it’s very much about driving people to local businesses, and for Facebook that’s big business.

Read more here:
Facebook Places Means Business

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I’m looking forward to the change because iFrames allows to do so much more than the static FBML pages. I’ll keep you posted for anything new coming out of Facebook about FBML, but in the mean time I would start getting cozy with the iFrames…

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Facebook Saying Adios to FBML

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So they’ve finally gone all in: Facebook has launched Places, they’re internal location-based-service (LBS) marketplace, and when the third largest (yet poorest) country in the world does something new, the world watches.

For the moment, Facebook Places is only in the US, and still doesn’t have a writing API, but that will all change quickly. As that changes, it will have some serious implications for the Internet. Here are 3 ways in which Facebook Places is going to change the digital landscape:

1. The web just got a bit more closed

Earlier this week, Chris Anderson and Michael Wolff of Wired proclaimed that the web is dead. Their reasoning was that as we use apps more and more to consume content and interact with others, the internet becomes “less about the searching and more about the getting“.

Well, with Facebook Places, your run-of-the-mill Facebook app will start doing what you once needed a Foursquare, Gowalla, and Yelp app to do. This means Facebook has secured much more of a stake in how the net’s evolving.

More importantly, though, it means Facebook users have that much less of a reason to go beyond the walls of Facebook. And that is precisely the behavior Google should be worried about.

2. LBS is going mainstream

The advent of Facebook Places may be the big push we need to take LBS mainstream. And the way LBS will reach that level of adoption is through its Facebook smartphone apps.

Social media apps and consumer engagement with them is the reason that smartphones will push LBS mainstream. Those little apps are gold and consumers are infatuated with them. Such apps will let the marketing industry take LBS advertising beyond mere SMS spam.

Now, sites such as Foursquare and Gowalla already offer apps and user-experiences that make LBS advertising possible, but they don’t quite yet have the user-base. As Michael Lazerow of AdAge points out:

Foursquare and Gowalla combined have just a few million users. Facebook has north of half a billion. When Facebook gets into a market, they bring everyone. Literally, everyone.

So while Foursquare and Gowalla have had potential LBS technology all along, they lacked the audience. Facebook, on the other hand, has had both the audience and the advertiser base all along. Now that they’re rolling out the technology, LBS advertising (via Facebook apps, of course) shouldn’t be too far behind.

3. Foursquare & Gowalla condemned to mediocrity

In a nutshell, Facebook Places won’t kill off these services completely. But it’ll hinder their growth potential and dash any acquisition hopes they might have had (that is, at least any hopes of Facebook acquiring them).

On one hand, many users will simply choose not to integrate their current LBS network (e.g. Foursquare) with their Facebook network. We’ve already seen this in how many users use Twitter very differently than they do their Facebook status updates. So these pre-existing LBS networks will probably retain an entrenched user base.

On the other hand, these incumbent LBS networks will probably have trouble growing their existing user base. Given Facebook’s scale and reach, for example, many users will discover Facebook Places before they discover Foursquare or Gowalla. These users, then, will probably be less likely to see the value in joining a separate LBS-only network.

You see, just like Twitter, Foursquare and Gowalla are more of individual features than stand alone social networks. This much is evident in how Facebook Places is usurping their entirely functionality as a mere feature.

So these networks will continue to be relevant, but only marginally so and for what will be a stagnant if loyal user base.

Taming the wild wild web

The Internet is in its 20s. It’s starting to grow up and past the awkward, experimental years of its teens. It’s time for the Internet to get down to business.  Companies can no longer launch just to say they did so, but they will launch to have an answer to their investors’ questions of, “How will you make money?”.  Part of that maturity will lead to an increased competition between close competitors and there will be attrition.

So while Google and Apple try to fence us in at the OS level, Facebook seems to be moving to middle-man them (and might be working on their own OS). After all, if users only use your OS to run someone else’s apps, who really controls those users? Facebook clearly intends to address that weakness.

Read more here:
3 Ways Facebook Local Will Change the Internet

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So they’ve finally gone all in: Facebook has launched Places, their internal location-based-service (LBS) marketplace, and when the third largest (yet poorest) country in the world does something new, the world watches.

For the moment, Facebook Places is only in the US, and still doesn’t have a writing API, but that will all change quickly. As that changes, it will have some serious implications for the Internet. Here are 3 ways in which Facebook Places is going to change the digital landscape:

1. The web just got a bit more closed

Earlier this week, Chris Anderson and Michael Wolff of Wired proclaimed that the web is dead. Their reasoning was that as we use apps more and more to consume content and interact with others, the internet becomes “less about the searching and more about the getting“.

Well, with Facebook Places, your run-of-the-mill Facebook app will start doing what you once needed a Foursquare, Gowalla, and Yelp app to do. This means Facebook has secured much more of a stake in how the net’s evolving.

More importantly, though, it means Facebook users have that much less of a reason to go beyond the walls of Facebook. And that is precisely the behavior Google should be worried about.

2. LBS is going mainstream

The advent of Facebook Places may be the big push we need to take LBS mainstream. And the way LBS will reach that level of adoption is through its Facebook smartphone apps.

Social media apps and consumer engagement with them is the reason that smartphones will push LBS mainstream. Those little apps are gold and consumers are infatuated with them. Such apps will let the marketing industry take LBS advertising beyond mere SMS spam.

Now, sites such as Foursquare and Gowalla already offer apps and user-experiences that make LBS advertising possible, but they don’t quite yet have the user-base. As Michael Lazerow of AdAge points out:

Foursquare and Gowalla combined have just a few million users. Facebook has north of half a billion. When Facebook gets into a market, they bring everyone. Literally, everyone.

So while Foursquare and Gowalla have had potential LBS technology all along, they lacked the audience. Facebook, on the other hand, has had both the audience and the advertiser base all along. Now that they’re rolling out the technology, LBS advertising (via Facebook apps, of course) shouldn’t be too far behind.

3. Foursquare & Gowalla condemned to mediocrity

In a nutshell, Facebook Places won’t kill off these services completely. But it’ll hinder their growth potential and dash any acquisition hopes they might have had (that is, at least any hopes of Facebook acquiring them).

On one hand, many users will simply choose not to integrate their current LBS network (e.g. Foursquare) with their Facebook network. We’ve already seen this in how many users use Twitter very differently than they do their Facebook status updates. So these pre-existing LBS networks will probably retain an entrenched user base.

On the other hand, these incumbent LBS networks will probably have trouble growing their existing user base. Given Facebook’s scale and reach, for example, many users will discover Facebook Places before they discover Foursquare or Gowalla. These users, then, will probably be less likely to see the value in joining a separate LBS-only network.

You see, just like Twitter, Foursquare and Gowalla are more of individual features than stand alone social networks. This much is evident in how Facebook Places is usurping their entirely functionality as a mere feature.

So these networks will continue to be relevant, but only marginally so and for what will be a stagnant if loyal user base.

Taming the wild wild web

The Internet is in its 20s. It’s starting to grow up and past the awkward, experimental years of its teens. It’s time for the Internet to get down to business.  Companies can no longer launch just to say they did so, but they will launch to have an answer to their investors’ questions of, “How will you make money?”.  Part of that maturity will lead to an increased competition between close competitors and there will be attrition.

So while Google and Apple try to fence us in at the OS level, Facebook seems to be moving to middle-man them (and might be working on their own OS). After all, if users only use your OS to run someone else’s apps, who really controls those users? Facebook clearly intends to address that weakness.

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3 Ways Facebook Places Will Change the Internet

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Have you seen the latest JVC ad, “Like it to Win it”? Did you know this generated over 35,000 fans in just 30 days? The promotion requires Facebook users to “Like” the JVC page. Every day the company gives away a product which shows up on your wall and you are asked to click the “Like” button. Full disclaimer, I “Liked” the page, and the products, but haven’t won anything….yet!

Does this violate the Facebook policy, YES!!!! However, according to Dennis Yu, “Facebook requires that brands get approval in advance and spend at least $10k, which is what JVC did.” The company went from 1,000 fans to now having over 35,000 in just 30 days!

So let me get this right, if a company is willing to spend money to advertise on Facebook, they don’t have to follow the rules? Are companies able to buy our friendship? Is that right? Should a company that’s willing to spend money be able to break the rules?

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Are Companies Buying Friends On Facebook?

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Jambool, creator of Social Gold and former provider of virtual currency for Facebook games and web apps, was sold to Google for a reported $70 million. This follows the trend of game and social app providers LabPixies and Slide we covered here.

In a post about the Slide acquisition, I discussed how Facebook, which originally welcomed developers in 2007 with open arms by dangling the possibility of riches, changed the game and pulled the power back in, away from developers. But why did developers originally flock there? In a blog post, Paul Allen called it the “true spirit of Wikinomics”, explaining:

“Mark Zuckerberg made three big announcements. 1) Applications can be deeply integrated with Facebook 2) Distribution of the applications will occur through the network, and 3) The business opportunity Facebook is providing will give 100% of advertising revenue (for third party applications) and 100% of transaction revenue to the application developers.”

That move had a huge impact. First Round Capital, a venture capital firm, describes this step: “By providing a clear roadmap – and business opportunity – for the widget makers, Facebook has just increased its virtual R&D budget by over $250 million dollars.” First Round correctly predicted that companies like Slide, RockYou, and other developers would enrich the user experience and likely enrich Facebook.

One such company, Jambool, took on the task of building a virtual currency business on Facebook, facilitating the buying and selling of virtual goods and services for application developers. This gained them some traction with other app developers and helped to build a growing business.

But that was the past, and now, as Facebook has grown in size and influence, it has changed the rules. Just as Slide, RockYou, and others have seen their fortunes wane as Facebook grew more powerful Jambool literally had  the rug pulled out from under them once Facebook introduced credits and negotiated deals where these credits would be the exclusive virtual currency on the site. It’s no mystery then that Jambool was snapped up by Google.  Like Slide before them, Jambool’s market valuation and market viability took a hit when Facebook changed the game, making them more likely to embrace an acquisition by Google.

This expands the Google fold to include game makers, experts in viral widgets, social advertising, expression tools, and now virtual currency. What’s next? Who else has been hurt by Facebook changing the game? What gaps need to be filled in Google’s social strategy?

While there are many utility apps and games that fit the bill, the one missing piece are offers – the trend where users don’t pay directly for points, credits, or virtual goods directly, but instead they do tasks, trial products, or spend money on other things that get them what they want.

The two most obvious candidates in this space are OfferPal, which was flying high until the scamville problem we covered here and the choice by Facebook to use TrialPay and PeanutLabs for their offers. This dramatically cut OfferPal’s profile and instantly cast doubt on how big they could become, and now, with a reduced valuation but solid technology implementation, Google could pick them up and round out their portfolio. However, while OfferPal is one obvious choice, Google could also choose TrialPay – a successful, and less controversial, but smaller provider in the offer space. If Google was willing to be aggressive, they could buy TrialPay, which is the favored integration partner for Facebook and currently the main provider of offers that yield Facebook credits. Such a move, at the right time, could not only give Google a solid technology and team, but also temporarily disrupt Facebook’s ability to leverage offers for credits.

Google is building an army of technology,  social tools, and people to challenge Facebook’s dominance in social media. While it has successfully executed on many technologies, it’s only now buying the companies with the traction, experience, and the mindset to put the social back in Google. The only remaining questions are around their ability to they integrate the recently acquired companies and if/how they will move into the offers market.

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Over the last two days, the dust from Affiliate Summit East 2010 has settled and most of us have recovered from the jet lag and three consecutive days of late nights and early mornings (for some there may have been some drinking involved).  And now that we’re starting to settle back into an everyday pace, a lot of us are assessing just what we took home from the conference. Well, here are the top 5 things I took away from ASE 2010.

1. AdWords faces some tough competition

From Facebook Ads to Plenty of Fish, advertisers seem to be turning to user-driven-networks spread their message. And it’s no surprise why.

While AdWords only lets you target by location and intent, user-driven networks let advertisers reach users by both location (great for localized offers) and demographics while at the same time fostering a network affect of like-minded shoppers. So while Adwords only helps you reach users that are already aware of the kinds of services/products you offer, user-driven networks allow you to reach a completely untapped customer base through their social interests.

2. Facebook Ads are the new big thing

Despite the fact that Facebook Ads are bupkis advertisers are drinking the Kool-Aid. No matter if it was a session or a one-on-one interview, everyone seemed to be talking about Facebook Ads. Those who’d figured out the platform heralded positive results, and those who hadn’t figured it out weren’t ready to give up on it just yet and wanted to know more about how to leverage it.

In a nutshell, Facebook Ads let advertisers target users by demographics and personal network; and that affords them a bit more trust currency. And as we know, belief is essential to selling. For instance, your ad might tell a user that one of their friends “liked” your product/service, and that seems to help with conversions more than a run-of-the-mill banner ad or sponsored result. Of course, the flip-side of that is that your product/service can’t completely suck.

3. Email remains a vital component

Believe it or not, email is not just still important, it’s more important than ever. And the reason is that email notifications are an integral part of the social networking experience. Just think about it: whenever a contact takes any action on your profile or content on a social network, you get an email notification.

As Declan Dunn pointed out in his session, marketers should pay attention to users’ email experience for two reasons. First, email is obviously integral to keeping users engaged in whatever community you’ve built-up through social media.

Secondly, and more importantly, depending on the platform you use to manage that community, either you can’t advertise directly to them or it’s inappropriate/inadvisable to do so because it infringes on their community experience. So email notifications become one of your best opportunities to promote any product or service.

4. A picture is worth a thousand clicks

During his awesome session on Facebook Ads, Jeremy “Shoemoney” Schoemaker broke down the most important elements of a Facebook Ad. And the most important piece of the puzzle was, you guessed it, the image.

Essentially there are three elements to a Facebook Ad: the title,  the ad copy, and the image. From his own personal experience with Facebook Ads, Jeremy has found that the image impacts an ad’s performance much more so than the body or the title. So much so, in fact, that between the three elements, Jeremy focuses 70 percent on the image, and only 20 percent on the body and a mere 10 percent on the title.

5. Sex still sells

Credit: Adrants

Of course, this isn’t exactly a revelation. But sometimes, it helps to be reminded of  age old truths — if only to not lose sight of them.

For starters, there were no shortage of pretty face representing the CPA networks and merchants. One network even had a pair of bikini babes prowling the conference floor.

But sex seems to work even on a performance-basis (no pun intended). In fact, one of the examples Shoemoney offered during his session (linked above) was an experiment where he sent US traffic to ad pages where some of the ads featured a cleavage pic and some foreign text. The cleavage/foreign language pics got more clicks than the non-cleavage ads that had English copy.

So it seems that sometimes, it doesn’t matter what your call-to-action or value propositions. Users seem to judge books by their cover, and have their minds in the gutter.

The sum of it all

Overall, Affiliate Summit East 2010 is the best conference I’ve been to this year, and maybe one of the best ever. Unlike a lot of other industry conferences, everything was extremely well organized (from sessions to parties), and the networking opportunities abounded in both quantity and quality.

More importantly, all the intelligence to be gained through sessions came directly from the front lines. After all, these are affiliate marketers. They live and die by their performance, so there’s no margin for error. They’re very focused on results, and very quick to figure out what works and what doesn’t.

In a nutshell, everything I learned was about what is working, not what was fun or cool to do with someone else’s money. I’m looking forward to doing it all again in Las Vegas in January.

The rest is here:
Top 5 Take Aways from Affiliate Summit East 2010

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Over the last two days, the dust from Affiliate Summit East 2010 has settled and most of us have recovered from the jet lag and three consecutive days of late nights and early mornings (for some there may have been some drinking involved).  And now that we’re starting to settle back into an everyday pace, a lot of us are assessing just what we took home from the conference. Well, here are the top 5 things I took away from ASE 2010.

1. AdWords faces some tough competition

From Facebook Ads to Plenty of Fish, advertisers seem to be turning to user-driven-networks spread their message. And it’s no surprise why.

While AdWords only lets you target by location and intent, user-driven networks let advertisers reach users by both location (great for localized offers) and demographics while at the same time fostering a network affect of like-minded shoppers. So while Adwords only helps you reach users that are already aware of the kinds of services/products you offer, user-driven networks allow you to reach a completely untapped customer base through their social interests.

2. Facebook Ads are the new big thing

Despite the fact that Facebook Ads are bupkis advertisers are drinking the Kool-Aid. No matter if it was a session or a one-on-one interview, everyone seemed to be talking about Facebook Ads. Those who’d figured out the platform heralded positive results, and those who hadn’t figured it out weren’t ready to give up on it just yet and wanted to know more about how to leverage it.

In a nutshell, Facebook Ads let advertisers target users by demographics and personal network; and that affords them a bit more trust currency. And as we know, belief is essential to selling. For instance, your ad might tell a user that one of their friends “liked” your product/service, and that seems to help with conversions more than a run-of-the-mill banner ad or sponsored result. Of course, the flip-side of that is that your product/service can’t completely suck.

3. Email remains a vital component

Believe it or not, email is not just still important, it’s more important than ever. And the reason is that email notifications are an integral part of the social networking experience. Just think about it: whenever a contact takes any action on your profile or content on a social network, you get an email notification.

As Declan Dunn pointed out in his session, marketers should pay attention to users’ email experience for two reasons. First, email is obviously integral to keeping users engaged in whatever community you’ve built-up through social media.

Secondly, and more importantly, depending on the platform you use to manage that community, either you can’t advertise directly to them or it’s inappropriate/inadvisable to do so because it infringes on their community experience. So email notifications become one of your best opportunities to promote any product or service.

4. A picture is worth a thousand clicks

During his awesome session on Facebook Ads, Jeremy “Shoemoney” Schoemaker broke down the most important elements of a Facebook Ad. And the most important piece of the puzzle was, you guessed it, the image.

Essentially there are three elements to a Facebook Ad: the title,  the ad copy, and the image. From his own personal experience with Facebook Ads, Jeremy has found that the image impacts an ad’s performance much more so than the body or the title. So much so, in fact, that between the three elements, Jeremy focuses 70 percent on the image, and only 20 percent on the body and a mere 10 percent on the title.

5. Sex still sells

Credit: Adrants

Of course, this isn’t exactly a revelation. But sometimes, it helps to be reminded of  age old truths — if only to not lose sight of them.

For starters, there were no shortage of pretty face representing the CPA networks and merchants. One network even had a pair of bikini babes prowling the conference floor.

But sex seems to work even on a performance-basis (no pun intended). In fact, one of the examples Shoemoney offered during his session (linked above) was an experiment where he sent US traffic to ad pages where some of the ads featured a cleavage pic and some foreign text. The cleavage/foreign language pics got more clicks than the non-cleavage ads that had English copy.

So it seems that sometimes, it doesn’t matter what your call-to-action or value propositions. Users seem to judge books by their cover, and have their minds in the gutter.

The sum of it all

Overall, Affiliate Summit East 2010 is the best conference I’ve been to this year, and maybe one of the best ever. Unlike a lot of other industry conferences, everything was extremely well organized (from sessions to parties), and the networking opportunities abounded in both quantity and quality.

More importantly, all the intelligence to be gained through sessions came directly from the front lines. After all, these are affiliate marketers. They live and die by their performance, so there’s no margin for error. They’re very focused on results, and very quick to figure out what works and what doesn’t.

In a nutshell, everything I learned was about what is working, not what was fun or cool to do with someone else’s money. I’m looking forward to doing it all again in Las Vegas in January.

See the original post:
Top 5 Takeaways from Affiliate Summit East 2010

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The title of this post is the name of a classic book by Dr. Seuss, but it also refers to the introduction by Facebook of its newest service, Places.

Places is Facebook’s long-awaited entry into the location-based services marketplace. As I’ve discussed previously, this area is an outgrowth of the social networking/smartphone connection and it’s quickly becoming the next major growth sector. Facebook’s Places is an attempt to counter the momentum of such services as Foursquare and Gowalla, if not crush it altogether, as well as capitalize on user activity in local over the long term.

As with Foursquare and Gowalla, Places enables users to “check in” at places and tell their friends where they are. The difference, of course, is Places users can seamlessly alert their friends on Facebook. Attempting to distinguish Places from competitors, Michael Sharon, the Places product manager, tells The New York Times:

“This is not a service to broadcast your location at all times, but rather one to share where you are, who you are with, when you want to. It lets you find friends that are nearby and help you discover nearby places.”

Not surprisingly, Foursquare and Gowalla told The Times that they see Places “as a complement to their own services and as an opportunity to gain additional distribution.” Foursquare actually was present at Facebook’s headquarters for the news conference announcing Places – so at least for the present time, the two companies are playing nice.

Facebook’s move comes at a time when it is increasingly positioning itself against Google in what could be the mother of all Internet battles. With its 500-million user base, anything new Facebook offers could have widespread adoption. “Facebook’s long-term goal with Places appears to be to capture the largely untapped advertising opportunity that local and small businesses offer,” says The Times, although Facebook says it currently has no advertising products for Places. Google, of course, generates most of its income from ads; in fact, AdWords is responsible for over 90 percent of Google’s revenues.

Walter Mossberg, the renowned technology reviewer for The Wall Street Journal, said his test of Places showed that it was “easy to use and reliable, with mostly logical privacy controls, an issue on which Facebook has been bruised in the past.” He does mention, however, that Places is “more stripped down and leaves out some attractive features others [like Foursquare and Gowalla] include.”

But it isn’t really the features that matter, as much as the fact that Facebook is now squarely in the location-based game. That could be good or bad for services like Foursquare. However, Places is definitely one more piece of evidence that Facebook intends to face off with Google head on. Google is making the inevitable move towards social networking features and trying to attract small businesses through location-based initiatives. Places is clearly focused on the small business market as well, because it is expected to help drive consumers to local businesses and will likely take advantage of developing options like pushing coupons or offers to users as they check in.

At the moment, Places is in early stage availability in the U.S. and available only on the iPhone. That will surely change as Places rolls out. And Places will just as surely add fuel to the fire in the Facebook-Google battle.

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Join Margie Schneider, VP Operations of TenGoldenRules.com, as she presents, “Targeting 500 Million of Your Best Prospects – Best Practices for Facebook Advertising”. This webinar will review best practices for advertising in Facebook using enhanced filtering. Learn how you can leverage the unique advertisement features Facebook offers to reach your desired audience.

This presentation will explain the following topics:

• How to Successfully Set Up Facebook Campaigns
• Proven Methods for Using Facebook Filters
• Advanced Campaign Filtering Strategies
• Best Practices for Testing Ads
• Tactics for Gaining “Likes” and Reaching “Friends”
• Understanding Facebook FBML Landing Pages vs Website Landing Pages

This free webinar will take place Wednesday, August 18, 2010 12:30pmEST – 1:30pmEST. To register and for more information please visit: Targeting 500 Million of Your Best Prospects – Best Practices for Facebook Advertising

Originally posted here:
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With over half a billion users, if Facebook was a country, it would be the 3rd largest country in the world. But it would also be, by far, the poorest. New revenue projections for 2010 would place Facebook’s GDP per capita in 2010 at just over $2, less than 1.3 percent of the world’s lowest GDP.

Of course, Facebook is not a country, it’s a business — it produces revenue, not GDP. And its revenues are expected to more than double in 2010. But even at that rate (and partly because of it), the numbers still leave some room to doubt  the company’s business model and future.

Average Facebook User Worth Less Than $3

Between the company’s ad revenue and virtual currency trade, Facebook is expected to more than double its revenue in 2010. As AdAge reports:

A new estimate from eMarketer says the company will book $1.285 billion in global advertising alone this year, almost double the estimated $665 million the company took in last year. That figure doesn’t include Facebook’s so-called virtual currency trade, which would nonetheless account for a fraction of the company’s overall business.

With more than 500 million active users, this places the average value of a Facebook user around $2.57. Not surprisingly, however, the average US user is worth a lot more.

As TechCrunch reports, “ US ad spending on Facebook is estimated to be $835 million this year, up from $500 million in 2009.” With the US accounting for about 30% of active Facebook users, that puts that average worth of an American Facebook user around $55.

Even though the average US Facebook user is worth about 22 time more than the average, that still places the value of Facebook’s “richest citizens” at about only one-third of world’s poorest – Burundi (see link above).

Bad Math

Of course, any economist of mathematician would scoff at my calculations. First, calculating GDP per capita is a bit more complicated than this.

Secondly, not all US ad spend is being driven by US users. For example, just as many US advertisers target users abroad, many non-US advertisers are targeting US users.

Nonetheless, the analogy, while purposefully absurd, does bring to light some interesting challenges still faced by the social networking giant.

Facebook Revenue & User Value in Context

There are three important ways we should look at these number before jumping to any conclusions.

First, revenue is not profit. Facebook is a private company, and we have no idea what its overhead is. Essentially, we don’t know how much of that projected $1.285 billion will be tied up in salaries, infrastructure, and debt.

Second, the rate of growth itself is not sustainable. Many savvy investors would be wary of such growth trends. After all, growth rates can’t continue forever at this rate. So some hard questions loom:

• When growth slows, how much will it be stunted?
• And when it does slow, will it be enough to cover overhead, such as salaries, maintenance, and debts?
• Is the indicator used my eMarketer, about the amount of money advertisers are spending on Facebook, one of good marketing strategy or lemming-like mentality?

Finally, what is a profitable user value for Facebook? Many affiliate programs will pay more than $2.50 for a lead or new user. So we have to wonder at what point does Facebook break into the black with their average user value.

Meaningless Speculation

As with all things digital, all this speculation is worth bupkis. Just as Facebook could find some way to revolutionize ecommerce, it can also end up being the next MySpace.

For now, there are only two things of which we can be sure: (1) with advertisers spending that much on Facebook, it’s an advertising opportunity we can’t afford not to at least  explore; and (2) given how ads are targeted through Facebook, the social network will most certainly change advertiser expectations across the board.

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Facebook Is The Poorest Country In The World

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In my article about RockYou, a comment from a ReveNews author led to a discussion of Slide likely facing similar market pressures as RockYou. Both RockYou and Slide were darlings of MySpace and expanded to Facebook as it became a more dominant platform. Early on, both RockYou and Slide did well, using all the smarts and experience they developed on MySpace to tweak the viral loop driving their user numbers upward. No one thought they could be stopped. Well, no one that is, except Facebook, who controlled the platform and wanted to participate in the riches and valuations that RockYou and Slide were taking in.

Back in 2008, while Facebook allowed it, Slide and RockYou worked the viral knobs like artists, so much so that Slide commanded a hefty $500M valuation as it took more institutional money.  Max Levchin, founding of Slide even stated “I’m convinced it will be bigger than PayPal”

The belief was that unlike PayPal, which was mostly dependent on eBay, Slide could ride on top of MySpace, Facebook, Bebo, and other social networks. By using their knowledge of social networks and viral loops, they believed that they could grow anywhere online using their viral techniques.

Of course we now know differently.  Facebook took several steps to show app vendors who was in control.  One step was to ‘clean up’ the User Interface (UI), hiding and/or removing applications from the default view of users, forcing users to take one or two clicks to access an application, and putting those applications out of mind. Users had to be passionate take the extra steps to even see these apps, driving app vendors to pay for advertising to gain more visibility. Another move by Facebook was to ratchet down the viral loop, limiting the methods and frequencies by which users could tell other users about new applications. Again, app vendors turned to Facebook advertising to regain the visibility lost.

As Facebook cleaned up their UI and turned things to their favor, other social networks followed suit changing to look more like Facebook, further pushing Slide and other personalization/expression apps to the fringes where only the dedicated would engage. A side effect of visually blanching Facebook and other social networks was that the ‘personalization and expression’ habit and viral loop was also killed. Less people saw cool slideshows and interactive apps, so fewer people commented on them or tried them out themselves. A vicious downward spiral that bled users away from apps.

So today, Facebook holds the cards, having crushed most app providers and especially personalization and expression apps without the sizable budgets needed to stand out in a crowd of more than 200,000 apps. Facebook dictates terms to most app makers, forcing them to accept 70 cents on the dollar for Facebook credits and locking them into 5 year deals. Five years ago, MySpace was multiple times the size of Facebook, and who knows if the tide will rapidly shift again to another network in that same time.

Realizing that popular shifts happen Google decided to capitalize on the number of skilled social network and viral experts who had found themselves on the losing end of Facebook’s changes to control its app market and UI.

It was only a matter of time before Google acquired a company with the background of Slide, and I expect that they will acquire a number of other companies with social network DNA to bulk up on their capabilities in engagement widgets, engagement ads, games, and viral growth.  Slide fits the bill well, as does LabPixies, which was acquired in April. Those two are not enough, as Google seems to have finally recognized that not only has it lagged in its attempts to do social, but that Facebook is a serious threat to its own dominance in advertising.

Google can start by setting the Slide team loose on the Google Buzz data for a Gmail situated social network launch. Let the Slide team apply their viral loop mastery on allowing Gmail users to quickly and seamlessly participate in the new Google social media offering by leveraging an existing email social graph. This time focusing on opt-in and relationship strength, as available from aggregate email data. This sounds like a bastardized, with a more functional feed and an email portal similar to, but more interactive and functional than, Google Buzz. There would be games from Zynga and LabPixies, both Google investments, with more gaming companies to follow, with added personalization apps plus widgets from Slide, and a network-wide integrated game mechanics system to engage and acquire users.

Google investment Zynga started rolling out a non-Facebook identity system earlier this summer for Facebook users, and last week Zynga modified their authentication system in a way that should allow them offer the same game to users on multiple social networks.  This step, would allow players on Google’s new network, Tagged, Yahoo, MySpace or elsewhere to join the same game and not be locked in to staying on Facebook to keep their characters.

Imagine that – being able take your Facebook Farmville or Mafia Wars character and play them on Google with no need to restart a new game.

Facebook has done well with the steps it has taken to make more money and control its platform. In the process, it has negatively impacted the businesses of game, widget, and app providers that are now more than willing to join Google, the largest Internet company with the most to lose from Facebook’s rise. With Google’s help, game developers are realizing that Facebook may not have all the cards.

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Google Buys Slide, Puts On Social Warpaint

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Wave, which was once touted as the email and social media killer by Google, has been phased out by the search giant. It will still be around, hovering on the web with its diehard users, but Google plans to let it die on the vine.

Somehow the billion-dollar bully of the Internet wasn’t able to put together a social networking success. Despite its commitment to the promotion and development of Wave, the product was always met by a collective shrug by the public. Google should be worried because its Buzz product is getting a somewhat similar reaction right now; when it’s not clogging up the GMail inboxes of curious onlookers that is.

So why was Wave, which allowed real-time email threads, playbacks and drag-and-drop sharing, such a big failure? It had the features that users were interested in, but despite coming out as social networking fervor was picking up steam, it never got any traction.

One of the biggest reasons was the exclusivity that Google used to first roll it out. Since Wave was first opened by invitation only, the initial excitement involved with getting an account was soon eclipsed by the simple fact that none of your friends were there to talk to.

And that type of exclusivity is a sign that Google still really doesn’t understand what drives social media.

For many, Google Wave was an empty room that no one had the patience to fill up. Why mess with waiting around and yelling your name into the darkness on Wave, despite its cool features, when you go log on to Facebook and talk with everyone you knew, share pictures, videos, links and — probably an overlooked key — ease of use.

Sure, when you signed up for Wave, you were given invitations to email to your friends. But if you were tepid and awkward about using the site, they would be too. Telling someone “Hey, let’s try Wave and see if we can figure it out” is a lot different than saying, “Dude, you need to get on Facebook so we can chat.” While such an invitation rollout strategy worked for Gmail it crashed for Wave.

Wave was innovative and slick, but in the end it was clunky and not-intuitive, which put it at a disadvantage when compared to Twitter, Facebook and other sites.

For its part, Google is doing what innovative companies should do: kill bad products and move on. According to TechCrunch, Eric Schmidt, CEO of Google said the company has a try, fail and keep creating mentality.

Wave may have been too ahead of its time, but most of all it was just too much of a closed system to matter to the public at large. The products Google has rolled out that have worked have been exceptional – Docs, GMail, Google Talk not to mention search. So for that, we should give Google some credit, they are smart enough to move on.

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Google Wave, We Hardly Knew You

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Once all a buzz, this week Google announced that Google Wave was no more. They no longer plan to develop it as a standalone product. It seemed as if Google Wave never really took off, as many people struggled to find meaningful ways to use it. I wonder if it is because many people use existing communication tools such as Twitter and Facebook, and Google Wave was just too much to integrate into people’s lives. Also, it was exclusive at one point, and many people did not have access to it, which may have hurt the success of Wave as well. Google is continuing to work on launching a social product, although so far, they haven’t been very successful yet. Another Google product, Google Buzz, hasn’t gotten much traction either, even though it is integrated into Gmail – which many people use daily as their email client.

I personally use Google Buzz since I use Google Reader and like to share blog posts with my followers there, but only those who follow me on Google Buzz see it, which isn’t many. Because many of my friends use Facebook and Twitter, I see more response there when it comes to sharing news or interesting blog posts. Unless Google can find a way to integrate through Twitter and Facebook, it’s likely that they won’t see much success – unless they create something bigger and better than these two very popular social networking tools.

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