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  1. #1
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Facebook: Marketers Are Your 'Friends'
    I like to poke fun at everyone claiming facebook is the greatest marketing opportunity since search, facebook is everything, facebook is the next step in internet evolution, social marketing is going to be huge and wonderful and shiny and blah, blah, blah...

    Basically, I think social apps are very cool, but they're for socializing. While some marketing can be done there, they are not the holy grail the hot knobbers want to pretend they are. Even though any place that people hang out can be made to be a legitimate advertising venue, what's being said about facebook today, in my opinion, is mostly hype, if not super hype.

    Before marketing begins in real widespread practice, people can claim "it" will be whatever they can imagine... well, I think today marks the end of the dream stage and the beginning of reality... I think it also marks the top of the $15B worth of facebook (implied market value of facebook via MS ~$240M purchase of 1.6% of facebook).

    So, if you're sick of me being right all the time, here's your opportunity to stake your claim to future bragging rights about proving me wrong! Post your best hype and take some guesses at the future value of facebook... I think right now is exactly the time when the founder and owner should sell it all, while the hype is sizzling white hot!

    So why does today mark a turning point for me... read this article...

    Facebook: Marketers Are Your 'Friends'
    The social network's new ad system delivers everything you say, do, and buy to marketers—with no opt out
    http://www.businessweek.com/technolo...116_289111.htm

    Read the whole article please, there's some real insight there into how important people are viewing facebook and what they think can or cannot be done there.

    Stuff like...
    On Nov. 6, Zuckerberg unveiled the details of a new advertising system that will let marketers deliver ads to individual Facebook users based on the details they share with friends on the site. Those tidbits include not only the kinds of data commonly available to marketers, such as age, gender, and general location, but also more personal information such as work history, relationship status, and political leanings. In all, more than a dozen categories are available to help marketers pinpoint the users they most want to reach. "This is some really powerful stuff," Zuckerberg said at a presentation in New York.

    I see someone in their founder who thinks all these people socializing will just lay there and offer up their private info for free... most will for a while, but then when abuses start happening, word will spread... an opt out will come first... and the smartest and most valued shoppers there will do exactly that... later, a facebook competitor will come along that offers to do pretty much exactly what facebook does with zero marketing and information disclosure... then the slow slide will begin.

    Some will say I'm a doom sayer - I'm not, there's real value in facebook, tons of it. But not $15B and it's not internet marketing's nirvana. I predict that in 3 years time, facebook's value will be less than $1B, less than 7% of it's value today. Yep, 93% hype, that's my swag on it.

    PS: swag = scientific wild ass guess.

    PS: Snib, precise figure for 11/7/2010 would be nice, closest to the pin contest kind of thing... i'm laying at $1B mark... take a shot?

  2. #2
    ABW Ambassador
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    The difference between you and I on facebook.

    You made your analysis public and I did not ..


    Right on .. Go Donuts.

  3. #3
    OPM and Moderator Chuck Hamrick's Avatar
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    Facebook demographic is 70% women age 18-24 or in other words female college students who don't spend money online. If you have tested media campaigns on MySpace then you know the conversion sucks. I am going to ask my daughter in her second year of college who first introduced me to FB what she would buy if she had money?

  4. #4
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    FWIW - MySpace demographics http://www.quantcast.com/myspace.com/demographics
    and Facebook demographics
    http://www.quantcast.com/facebook.com/demographics

    Facebook clearly leads the pack when it comes to users aged 18 to 24.

    If you found that demographic did not work for you on MySpace, Facebook will only have much worse results.

  5. #5
    Analytics Dude Kevin's Avatar
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    Interesting thoughts, Donuts.

    Definitely, Facebook will have to change the way people look at conversions for those campaigns. It's not targetted BUYING traffic regardless of the demo info they make available to you.

    I do think some branding opportunities exist, but I wonder what percentage of affiliates are really concerned about branding for their own sites.

    Sure, some of the big ones are, but again, I'm asking about percentages.

    We've been looking into building Facebook apps, both to pass to our affiliates, as well as to do some branding for merchants we represent on that level.

    I think one of the biggest opportunities is for targetted local advertising, if 85% of folks don't opt out down the road.

    But my guess on value, 11/7/2010: $4.35B
    Kevin Webster
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  6. #6
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  7. #7
    Affiliate Manager Alan Hamilton's Avatar
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    Great points Donuts,

    No disagreement from me oh pragmatic one. ;-) Yep, eventually people will come forward and acknowledge that the king is wearing no clothes! Until then, I'd love to own FB. (p.s. I'd sell it NOW)
    Join the Spicy Aprons Affiliate program on ShareASale Visit us on Facebook www.facebook.com/spicyaprons Follow us on Twitter @Spicyaprons

  8. #8
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Adam, great story you linked to there. They gave a lot of details about the specific scam being used, enjoyed seeing the details.

    Alan, yeah buddy, if we even owned a small piece, we could go fishing for years if we sold out our shares now.

  9. #9
    AM Navigator Geno Prussakov's Avatar
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    Quote Originally Posted by Donuts
    Alan, yeah buddy, if we even owned a small piece, we could go fishing for years if we sold out our shares now.
    and to your soooo-right-on-the-money post (again), D.

  10. #10
    ABW Ambassador Snib's Avatar
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    A couple things need to happen before Facebook becomes a flourishing marketing community like Google. First, Facebook users need to grow up. They're too young. Second Facebook needs to offer a long-tail search. Hopefully they can consider spidering apps and providing even more detailed search results within their walled garden. If these things change they might just be a strong contender for Google.

    The thing Facebook has going for it is smarts. They've got some brilliant developers. It's the only company that can compete with Google in terms of rapid development and implementation. If things continue as they are and Facebook continues to evolve at their current pace who knows where they'll be in 2010. They're going for the gold and only time will tell if they can take on Google.

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  11. #11
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Snib, just for fun, can you take a guess? Mine's just a guess, I have no real idea what they'll be worth in 3 years. Shoot, we may have a very hard even valuing them then, if they're acquired or still private or whatever. But c'mon buddy, take a shot in the name of fun please.

    Google today is worth roughly $207B (market cap, 11/11/2007, $663 / share), so if you think Facebook may be able to compete with Google on any level, it'd be my guess that you'd be way above my $1B guess. In closest to the pin, you can guess $1.01B now and still beat my guess for everything over that... easy for you to essentially take the "over"... play?

  12. #12
    ABW Ambassador Snib's Avatar
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    Quote Originally Posted by Donuts
    Snib, just for fun, can you take a guess? Mine's just a guess, I have no real idea what they'll be worth in 3 years. Shoot, we may have a very hard even valuing them then, if they're acquired or still private or whatever. But c'mon buddy, take a shot in the name of fun please.

    Google today is worth roughly $207B (market cap, 11/11/2007, $663 / share), so if you think Facebook may be able to compete with Google on any level, it'd be my guess that you'd be way above my $1B guess. In closest to the pin, you can guess $1.01B now and still beat my guess for everything over that... easy for you to essentially take the "over"... play?
    Alright, if you insist, $50B

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  13. #13
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Snib, thanks man! See, you're having fun with it already.

    Anyone else want to take a swing in the Facebook future value closest to the pin contest?

    Facebook value on 11/7/2010:
    Donuts: $1B
    Noth: $4.35B
    Snib: $50B

  14. #14
    ABW Ambassador
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    $2.5 Billion

  15. #15
    ABW Ambassador Lanadili's Avatar
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    I'll say 1.5B

  16. #16
    Moderator MichaelColey's Avatar
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    I'll say $25 Billion. I think it would be overvalued at that, but I think that's what the market will think.
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  17. #17
    The "other" left wing davidh's Avatar
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    Depends on what you're marketing and how. The people on Facebook, Myspace, etc are the same people that visit your sites and everybody else's. They all wear clothes and eat food any buy stuff they don't need and poop in a toilet just like you and I and everybody else does.
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  18. #18
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    Quote Originally Posted by davidh
    Depends on what you're marketing and how. The people on Facebook, Myspace, etc are the same people that visit your sites and everybody else's. They all wear clothes and eat food any buy stuff they don't need and poop in a toilet just like you and I and everybody else does.
    Majority of facebook demographic is under 24 or 18. Majority of them do not have credit cards or still are dependent on parents/guardians for their clothes and stuff.

    What do you market to them if you are an affiliate?.

    However this segment is good for Branding, especially teen/kids related brands (e.g. Abercrombie / Aeropostale etc.).

  19. #19
    The "other" left wing davidh's Avatar
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    Many teenagers these days are given some access to/use of their parent's cards, and most of them know how to go to CVS or Walgreens or the local mall to get a Visa debit card. Or they can just say "Daddy, can you get me this?". How do you think they pay their cell phone bills? Hell, my son is only 11 and he's spending money online.
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  20. #20
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    "Majority of them do not have credit cards or still are dependent on parents/guardians for their clothes and stuff."

    The 18-24 age group is when most of them first get a credit card. Get at them, get them in debt, they should max them out, then turn around and sell the some debt help

    Having said that, I have no idea how they convert. Guess you have to test and maybe some offers turn out to work better than others.

  21. #21
    ABW Ambassador Snib's Avatar
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    I've got some experience with the audience so far and there are conversions. It's nowhere near as easy as converting search engine traffic, but it's possible. You just can't convert everything and there are only a few select markets that really work. I expect this to expand quite a bit as technology gets more advanced and the users mature. Nobody goes to Facebook to shop, but there are a lot of companies, including Facebook, who are putting a lot of resources into changing that.

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  22. #22
    Newbie gokce's Avatar
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    Hi Donut,

    Quote Originally Posted by Donuts

    Basically, I think social apps are very cool, but they're for socializing. While some marketing can be done there, they are not the holy grail the hot knobbers want to pretend they are. Even though any place that people hang out can be made to be a legitimate advertising venue, what's being said about facebook today, in my opinion, is mostly hype, if not super hype.

    I completely agree with your argument. People come to social networks to get socialized not for searching or shopping. However, what do you think about the possible outcomes of facebook's shopping tool which enables users to show and discuss the things they bought and let them share with their friends? As far as I have concerned people will not be happy if they see what they wear or what they use on others. http://www.bizreport.com/2007/11/fac...s_network.html

  23. #23
    Moderator MichaelColey's Avatar
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    Shopping can be a very social experience to the right people.
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  24. #24
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Facebook value on 11/7/2010:
    Donuts: $1B
    Lanadili: $1.5B
    RedTagDeals: $2.5B
    Noth: $4.35B
    MichaelColey: $25B
    Snib: $50B

  25. #25
    Newbie gokce's Avatar
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    My guess is less than $1 B

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