MI021/CS021: Computers in Management Oct. 14, 2011 Facebook Case Prof. John Gallaugher written case...

MI021/CS021:Computers in Management

Oct. 14, 2011

Facebook Case

Prof. John Gallaugherwww.gallaugher.com

written case available at www.gallaugher.com/chaptersCopyright ©1997-2010 John M. Gallaugher, Ph.D. All rights reserved

Note: not all images cleared for commercial copyright.

http://www.gallaugher.com/

Issues Covered

• Background on Facebook– Competitive advantages– Facebook vs. the Competition

• Key efforts– Feeds– Platform– Beacon– Facebook as The Web’s Plumbing

• Advertising challenges & opportunities

• 800+ million users• solidly profitable• avg. time online ~55 mins.

“We Want In!”

Source: http://www.emarketer.com/Article.aspx?R=1008598

http://www.emarketer.com/Article.aspx?R=1008598

http://www.emarketer.com/Article.aspx?R=1008598

Feeds = Ebola for Data Flows

Organic or Earned Ads:Free ads that come from people

promoting products on their own.



Facebook Encroaches All

Source: TechCrunch: http://www.techcrunch.com/2008/09/05/googles-picasa-becomes-more-flickr-like-adds-new-ways-to-explore-interesting-public-photos/

Bye-bye Digg

Facebook - Apps Platform

Copyright / Scrabulous

BeaconOnce every 100 years, the way that media works fundamentally changes

Beacon Busted

Content Adjacency

15

Hunt vs. Hike

• Click-through rates– Google: 2%– Facebook: .04%

• CPM– TechTarget: as much as $100 and above– Technology Review: $70– Mashable: $7 - $33– Facebook (via Lookery): 13¢– Facebook (targeted ads): 15¢

15

A Volume Biz:Lots of Impressions at Less Revenue

Sources:http://news.cnet.com/8301-13577_3-20004779-36.html?part=rss&subj=news&tag=2547-1_3-0-20http://online.wsj.com/article/SB10001424052748704436004576297310274876624.html#ixzz1LCFVtMRC

BUT all this with NO ad network!(Google, Microsoft, Yahoo, AOL also run ads on other sites)

BUT all this with NO ad network!(Google, Microsoft, Yahoo, AOL also run ads on other sites)

http://news.cnet.com/8301-13577_3-20004779-36.html?part=rss&subj=news&tag=2547-1_3-0-20

A GLOOMY FORECASTCan social-networking sites continue to make significant inroads into the U.S. online advertising market? The outlook is uncertain. A shaky economy and setbacks in targeted-advertising initiatives have caused leading online marketing research firm eMarketer to project more modest revenue growth for social-networking sites over the next four years than it had previously predicted.

THE GLOBAL VIEWSocial networking is a global phenomenon, and reaching users outside the United States will become increasingly important as advertising dollars flow to Western Europe, Asia, and beyond. Source eMarketer / Technology Review

Revenue Per Unique Visitor

Source: Business Insider March 18, 2010

http://www.businessinsider.com/chart-of-the-day-revenue-per-unique-visitor-2010-3

Better Targeting

Facebook Knows Where I Am & What I Do

Which Ads are Targeted at You?

You are Part of the Targeting





Value?

Engagement Ads

Facebook Integration

Auto Login Catalyzes Signup / Experimentation

Partners Ask Permission

CNN & Facebook Feed Integration

Buy, Opt-in, Post to Feed

Viral Invites

Viral Giving

APIs & the Free Rider Problem

Mobile

What Happens in Vegas Stays on Facebook (& YouTube, Flickr, Twitter, ...)

Source: CNet, Wonkette, and CBS Evening News, quote from Socialnomics

http://www.theatlantic.com/technology/archive/2011/10/what-you-shouldnt-post-on-your-facebook-page-if-you-want-a-job/246093/

MI021/CS021: Computers in Management Oct. 14, 2011 Facebook Case Prof. John Gallaugher written case...

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