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Facebook’s New Virtual Currency is YOUR Reputation

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… by Dennis Yu

What do these 3 things below have in common?

If you guessed advertising, you’re only partly right, since one of the three items is an ad. If you guessed personalized results, you’re warmer, but missing the bigger picture. If you ventured that it’s Facebook’s attempt to mine you for all that you know and what you’re worth; you’re exactly right.

Facebook is a free service in the sense that you’re not paying a monthly subscription fee. It’s ad supported. Verizon charges me a few hundred dollars a month for service, which I’d gladly pay over listening to a 30 second ad every time I wanted to make a call. But Facebook chose to use ads, not subscriptions, to make a profit—yet Facebook users expect service as if they were paying customers.

These freeloaders who don’t pay also don’t realize how their activity continues to build value for Facebook’s advertisers. In this article we’ll explore the mechanics behind this system and why Facebook’s revenues will outstrip Google’s in less than 3 years (provided they have no major privacy bumbles).

Let’s start here: Any information you reveal about yourself on Facebook you can pretty much think of as information you’re handing over to advertisers. Sure, there are privacy settings, but do you know of anyone who actually unchecks the pre-checked box to have personalized ads served to yourself and for your image and name to be included in ads? I consider myself more knowledgeable about the platform than the average Facebook user, and even I’m not sure if it’s fully possible to opt out of things like Sponsored Stories.

Sponsored Stories work tremendously well for advertisers. They should, since these ads show you pictures of YOUR friends, creating the ultimate high school cafeteria, enquiring-minds-want-to-know, rubbernecker situation. Who doesn’t want to keep up with what their friends are doing?

Recently, Sarah Bird, the chief legal expert for SEOmoz, and I had a discussion about whether this is okay. If I’m a fan of SEOmoz, and Facebook uses my image to help SEOmoz, a Facebook advertiser, get more fans— doesn’t that mean SEOmoz is benefiting from my endorsement without asking me for permission? What if the advertiser is not even aware that they are achieving stellar results because of this technique? Is this Facebook’s fault or perhaps no one’s fault at all? What if the profile pictures of 13 year olds are being shown to all sorts of people without parental consent in the United States or other countries that have varying privacy laws?

Before you brand me as a privacy shrew or Facebook hater, let me tell you that I don’t think there’s a significant problem here, and there won’t likely be a problem. Here’s why:

  • People routinely sell their information for almost nothing:

    Give up your email address to earn 5 Farm Dollars? Sure! Sell out 10 friends to get 20 coins in some silly game that has no real world value? Absolutely! How about join an airline loyalty program or sign up for a supermarket rewards card? This has been going on for a long time. If you travel a lot like me, you know that many airports have “free” Wi-Fi that activates only upon you watching an ad. Don’t know about you, but I watch the ad versus pay $10 for 45 minutes.

  • We’ve been testing this for FOUR years inside Facebook:

    It was June of 2007 when Facebook released the F8 platform. To the best of my knowledge, it was our team that first came out with ads within Facebook that were personalized with user profile pictures and names. Facebook came out with Sponsored Stories only a few months ago, but arguably they have learned from what we did. If you remember back in 2007, Facebook’s own ad product, not our 3rd party ad-served unit, were those pesky “flyers”—basically static banner ads that had zero personalization and almost no targeting.

  • Advertiser gain doesn’t have to be consumer loss:

    This is not a zero sum game. Scott Richter, one of the pioneers of online advertising, tells me that spam is really just bad advertising. And I agree. Unwanted, irrelevant ads are like the yellow page books being dropped off at your door, killing who knows how many trees. That stuff on your doorknob or windshield when you get back to your car—that’s spam. But a highly targeted, interesting ad that highlights something your friend did—I would appreciate the recommendation, like a personal concierge of sorts.

  • Most users probably don’t know it’s an ad:

    Now this one is devious. How many blog posts or stock recommendation are written by authors with bias (think Michael Arrington of TechCrunch who writes about companies he has ownership in)? How about the free webinars that are put on by Google and Facebook for how to increase your marketing effectiveness—or even those little tips inside AdWords that keep recommending that you spend more money in various ways? Any content anywhere has hidden bias—even what’s in your News Feed, the super positive reviews posted by restaurant employees, or your comments about your friend’s cooking and whether that dress makes her butt look big. As an advertiser, you pay your email company to send emails on your behalf, so how’s that so different than paying Facebook to send messages to your fans?

Whether the delivery channel requires payment or not, is independent of whether that content is relevant and appreciated by the recipient. Some would argue that if the CPC advertisers pay is dependent upon Quality Score or CTR, that there is a built-in mechanism for good behavior. But we know of a plethora of big advertisers who spent millions on untargeted nonsense.

There is definitely a move towards more personalized, daresay more enjoyable, ads on Facebook. In the research study that we put out in January 2011, we observed that the average CTRs on Facebook were 0.051% in 2010. Some folks took this to mean that Facebook traffic was bad, as opposed to Facebook advertisers being unskilled in their methods.

Even today, the average marketer trying to create social ads is like shoving a bus driver into the cockpit of a fighter jet. They might have driven that bus competently for years, but they are going to need some training for this new vehicle that has so many more knobs to twist. And it’s no wonder that most Facebook advertisers crash and burn.

Last we checked, Facebook made $1.7 billion in 2010—let’s round that up to $2 billion for sake of simple algebra. And Google does about $30 billion a year. So right there, Facebook earns less than 1/15th of Google’s revenue.

Facebook also earns about 30 cents per 1000 impressions served (eCPM). It varies by country, device, and other factors, but we can use this number for now. And Google earns about $80—not 80 cents—per thousand queries. That means Google is 260 times better at extracting value.

Some search die-hards will jump in and say that search queries are more valuable because people were actively looking versus just goofing off when the boss isn’t looking. They will argue that search intent is more valuable than display because the conversion figures prove it. Several PhDs in statistics on staff will calculate it down to the 99%th percentile and 5 significant digits. But they might have overlooked the difference between demand generation and demand collection—and then the distortions that occur in last click attribution.

When marketers are able to give credit to clicks that are non-branded and not navigational, they’ll appreciate the value of word of mouth; which is what Facebook is.

The reality of advertising for us online marketers is that only a fraction of what influences purchase behavior is actually trackable via links and cookies. Marshall Sponder calls this the “ultraviolet” layer. It includes testimonials, peer pressure, TV advertising, and other things in the real world that don’t have pixels attached to them.

When advertisers realize this, and are able to assign value to these “assists”, and have tools that allow them to properly fly their jet aircraft, (punch in the destination, and the autopilot takes over,) then it’s possible that Facebook’s earnings could catch up to Google’s. Further, I believe that Google’s eCPMs will slide over time, as we have witnessed in any channel that matures, since advertisers will not be willing to count conversions that are actually navigational versus search. Maybe Google and Facebook could both meet in the $30 eCPM range.

The price of traffic MUST decrease from a pure economics standpoint. The growth rate in available traffic is outstripping the value of goods being sold, so mechanically this must be true. Unless you double the money supply overnight, a doubling of traffic globally because of more information across more devices on a more connected population gives each ad impression fractionally less value.

Watch as the waters equalize; with Facebook increasing their earnings with traffic being more valuable, and traditional search losing power, as advertisers are smarter about assignment of credit influence and demand generation.

Dennis Yu is Chief Executive Officer of BlitzLocal, a Webtrends partner that builds social media dashboards to measure brand engagement and ROI, specializing in the intersection of Facebook and local advertising. You can reach him on Facebook, Twitter, LinkedIn, his blog, or good old-fashioned email at dennis@blitzlocal.com. BlitzLocal is a leader in social and local advertising and analytics, creating mass micro-targeted campaigns. Mr. Yu is an internationally sought-after speaker and author on all things Facebook, and has been featured in National Public Radio, TechCrunch, Entrepreneur Magazine, CBS Evening News, and other venues.

Facebook Adds New Mobile Security Features

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Facebook announced yesterday two new mobile security features. They realize more people are using mobile devices and want their security tools available everywhere you use Facebook.

Social reporting was rolled out in March, which is a tool that helps you resolve issues with posts, profiles or other content on the site. If users see content they don’t like, you can alert members and Facebook. Let’s say you don’t like a photo of yourself that has been uploaded by someone, you can use social reporting to ask that person to take it down.

Facebook says that almost 70% of the reported photos are taken down by the owner. Over the coming months, they will add social reporting to all mobile devices.

Another security feature is the password reset for times when you forget your Facebook log in information. They are testing different improvements for resetting your password from your mobile phone. As of now, you can choose the email address where you want the reset information sent to and soon they will offer other ways to confirm your identity.

It seems Facebook is doing what they can to make our accounts and personal lives more secure. Have you seen those Facial Recognition ads yet?

Social Media Pulls People Together to Clean up After London Riots

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It’s 2011. How do you reclaim the streets of your city that has been destroyed by riots? You use the power of social media, which is exactly what London is doing.

If you’ve been on Twitter this morning, most likely you have seen that #riotcleanup is a trending topic. Thousands of Londoners and supporters have gone to social networks, like Facebook and Twitter, to do what they can to help. Social media has been proven as a fantastic tool for organizing events and bringing people together for a cause.

Here are a few of the social network accounts in support of getting London back to order after the riots that broke out on Saturday.

  • @RiotCleanup Twitter page – It currently has 74,000+ (and growing) followers and is broadcasting cleanup locations and times, as well as other useful information
  • London Cleanup Facebook page – This page is being used as a central location for information, as well as supporters offering up their kind words and encouragement to the city
  • riotcleanup.co.uk website – This is being updated with riot cleanup information and was put together by a resident of rural Shropshire, England. Although he’s not in London, he saw a need and wanted to help, he told Mashable in an email interview.

Remember the study that showed people who use social networks are actually more connected in real life? I think this shows that networks like Facebook and Twitter can truly bring people together for a cause greater than themselves. Social media isn’t only a way to connect during disasters, but it’s also proving itself to be a reliable resource to bounce back after something like the London riots.

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You Can Now List Your Unborn Child as Family on Facebook

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Back in 2010, Facebook unveiled the feature where you could list people as family on your Facebook profile. And now you can easily let everyone know you are expecting with their new “Expected: Child” option. You can add the due date and baby’s name if you’d like.

A Facebook spokesperson told CNN, “We’re always testing new features. Earlier this year, Facebook started providing the option to add an ‘Expected: Child’ as a way for users to more accurately express their identity.”

Oddly enough, the option has been there for awhile, but no one picked up on it until this week.

Some are asking if this new option is weird or if it makes the personal part of telling everyone you’re expecting, impersonal.

The Mommy Files says, “Women used to pick up the phone to share their exciting news with parents, aunts and uncles, and close friends. They’d slowly spread the word as they bumped into friends at the grocery store or at the park. They’d map out when to alert co-workers. When you’re pregnant, it’s fun to tell people in person and receive congratulatory hugs.”

Some are also saying this new feature could potentially cause problems. For example, what if you announce your pregnancy, forgetting you didn’t want your employer to know yet? Or, what if you have a miscarriage? It’s hard enough telling those close to you that you’ve just lost a baby and now you have to let all of your FB “friends” know?

One blogger wrote, “A pregnancy that doesn’t work out is much sadder than a relationship that doesn’t work out. The risk of a situation involving possibly hundreds of ‘friends’ knowing details that turned out to be too tragic or personal to share is very great”.

So, what do you think about this new option? Are there potential pitfalls?

How Travel Bloggers Can Best Use Facebook & Twitter

Author:

… by Jessica Spiegel

Once upon a time, posting high-quality writing or photos or videos on your travel blog was pretty much the first and only step to blogging. Now, unless it’s just your Aunt Jane who’s reading about your trip, there’s all sorts of social media marketing to think about. Whether Google+ (or any other new site popping up in the next three days) is a long-term threat to existing social media platforms remains to be seen, but for now the biggest players are Facebook and Twitter.

Travel bloggers, like bloggers in all genres, are – for the most part – engaged on both Facebook and Twitter, but in different ways and to different degrees. It’s not a science, and can involve quite a bit of trial-and-error, but here are some helpful hints before you dive into the deep end.

How are travel companies using Facebook and Twitter?

It’s not just travel bloggers who use social media – travel companies are, too. Wendy Perrin of Conde Nast Traveler asked a few travel industry pros how their companies use both Facebook and Twitter, and if you’re familiar with the two platforms then the answers aren’t exactly earth-shattering. Still, it’s interesting to hear that big companies like Virgin America and Travelocity not only understand that the platforms are different but also how to use each one in an effective way.

Both Travelocity and Virgin America acknowledge that while Facebook does better with “long-term engagement,” Twitter is better at handling customer service issues, often in real-time. Another perk about the immediacy of Twitter is the ability to generate sharp (albeit brief) peaks of interest, sometimes through promotions like freebies or travel deals. Because Facebook users tend to be on the site longer, that’s where conversations between users of a particular travel brand occur, alongside conversations with the brand itself. It’s a place where hotel or cruise ship guests – self-declared “fans” of a brand or product – can communicate with each other, strengthening brand loyalty and increasing word-of-mouth referrals.

While travel bloggers can learn a bit from the way big travel companies use social media, it’s impossible to keep up with their pace – jetBlue, for instance, has 17 people on staff just to handle the company’s Twitter account. Seventeen people just for Twitter. Can you even imagine what your travel blog’s Twitter account would look like with 17 handlers?

Travel bloggers can, however, engage in personal real-time conversations with readers on Twitter, work toward long-term “fan” cultivation on Facebook, participate in travel chats on Twitter to expand readership/community, and encourage Facebook fans to chat with each other to generate a sense of community. Take your cue from the travel companies – a big part of your time invested in social media is about being responsive.

Which is more valuable for travel bloggers, Facebook or Twitter?

Let’s assume from the outset that you’re going to be on both Facebook and Twitter. Which one deserves more of your time and energy?

As you can probably guess, there’s not a simple answer here. Most people will need to put a certain amount of time and energy into both Twitter and Facebook, but each blog’s readership will help dictate which venue produces the best results and proves most worthwhile. Not only that, the content you post to each platform also has the potential to determine how successful it is. There’s some evidence that Twitter users are more apt to hit the retweet button rather than click through and read something, whereas Facebook users are more likely to click through and read many more posts than they share. Again, tracking traffic will help you figure out what your audience is responding to most so you can adjust your posts accordingly.

Since you probably don’t have a staff of 17 to deal with your Twitter followers, you’ll need to be judicious about how much time you devote to social media. It’s a good idea to try out a few things and see what works for your audience, but here are a few important things to remember:

  • There’s some overlap between Facebook and Twitter users, but it’s far from 100%. When, for instance, you publish something new on your blog, you’d be crazy not to post a link on both Twitter and Facebook. Yes, some people will get the link twice (more times if they subscribe via email), but they voluntarily signed up to receive those updates.
  • Some duplicate posting is fine (see above), but try not to duplicate everything. It can be annoying to think about keeping your blog, your Twitter stream, and your blog’s Facebook page updated on a regular basis without just auto-posting the same thing to each – but it’s a good idea to keep each venue unique. Otherwise, what reason does your audience have to visit? This can be as simple as sharing interesting/related links via Twitter and Facebook to sites other than your own that you think your readers would also enjoy, or doing giveaways that are Twitter- or Facebook-only.
  • There are tools that can make managing multiple social media platforms easier. Heavy Twitter users are likely already familiar with tools like TweetDeck and HootSuite, but did you know you can also update Facebook pages using those tools, too? I’ll confess that I’m a TweetDeck fan but have (as yet) been unable to set up my TweetDeck desktop account to post to my site’s Facebook page (there’s some sort of bug in there I can’t figure out). From HootSuite, however, I’m able to do it easily, including scheduling updates for later times. Having one tool to keep track of both Twitter and Facebook is a huge time-saver.
  • You can’t just be a megaphone – you have to listen and react, too. Posting your links (and other interesting links) to Twitter and Facebook is great, but the critical part of both of these platforms is the “social” part of social media. It’s a conversation, and in order to generate brand loyalty (where your travel blog is the brand) you need to put in the time conversing with your audience – through comments on your blog, Twitter @-replies, and Facebook comments on your page. If you’re not prepared to do that on one or the other of the social media platforms, you might as well not even be there.

You’ve got to go where the community is.

Back in the days of message boards and forums, community was everywhere – and nowhere. These days, the communities on Facebook and Twitter are huge, and any attempt to create a message board now would seem a little silly. The bottom line is that if you want to be in on the conversation, you have to go where the community is – you can’t expect them all to come to you. And for now, that means being involved to some degree with Facebook and Twitter.

>> What are your experiences using Facebook and Twitter to promote your travel blog?

Jessica Spiegel is a Portland-based travel writer with BootsnAll, the RTW travel experts, for whom she writes the WhyGo Italy travel guide. She also writes frequently about things like business travel and finding cheap airfare, and although she participates on both Facebook and Twitter she’s more of a Twitter fan. You’ll find her on WhyGo Italy’s Facebook page and on Twitter as @italylogue.

Image Source: SXC

Doodle with Doodle.ly and Share It with the World

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We take pictures and share them on Twitter and Facebook. We update our statuses or timelines to let every one know what we’re up to. We all love to express ourselves. But what if we want to just doodle and share it with the world? Now you can.

Doodle.ly is a new website that lets you doodle anything your heart desires and then share it on Twitter or Facebook. I shared my doodle on Twitter. I also took a screen capture so I could share it with you. I know. That was nice of me.

And no, my 7 year old didn’t draw this. I am fairly certain he would have done a better job than me.

Doodle.ly is very easy to use and quite a lot of fun. Just head over to the website, choose your favorite writing instrument (pencil, sharpie, ink pen) and doodle. Once you’re done, add a title and click “Publish My Doodle”. You can choose to share it on either Twitter or Facebook.

As of now it’s web based, but I read it’s headed to the iPhone and iPad.

Now, go draw me a picture and share it on Twitter!

New Facebook Ads Tell Users How to Opt Out of Facial Recognition

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Back towards the end of June, Facebook rolled out a feature which made tagging your friends in photos even easier. What made some people unhappy and felt that it violated privacy, was that this tag feature or facial recognition feature, was made a default setting.

You could disable this feature (if you even knew about it in the first place) by making a few tweaks under your “Privacy Settings”. Basically you needed to find “Suggest photos of me to friends” under your privacy settings and edit according to your preferences.

After being contacted by Connecticut Attorney General George Jepsen who expressed concerns about this new feature, Facebook decided to make the public more aware of how to turn off the tag suggestions setting.

Jepsen said in a statement, “Facebook has made significant changes that will provide better service and greater privacy protection to its users, not only in Connecticut, but across the country”.

In an effort to make “significant changes” that supposedly provides better security for its users, Facebook has launched a set of ads to show users how to turn off this facial recognition default setting.

The ads began running in July. Facebook said that every U.S. user should see the ad twice. I have yet to see an ad for this, have you?

Image Source: LA Times

Facebook Rolls Out Facebook for Business

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There’s a lot of buzz right now around the fact that your business cannot have a Google+ profile. Businesses left and right have seen their Google+ profiles shut down. It’s not that they’re never going to allow businesses to have a profile page (that would be dumb), they’re just still working out all of the details of what it would look like exactly.

How do you get your business name out there when doing a Google search then? Facebook has the answer. They’ve rolled out Facebook for Business, which shows you how to use Pages, Ads and Stories to get the word out and increase your business presence on the web.

The tagline says “Learn how to grow your business with Facebook’s powerful marketing tools”. Here are a few of the key points and how it works:

  • Build a presence by creating a page, claiming your place and making your website social by adding special features like the “Like” button.
  • Engage your community by joining the conversation, building relationships and gaining valuable insights about your audience
  • Get the word out with ads and sponsored stories

Overall this seems like a great addition to Facebook and I plan on digging in a little more to see how I can improve on what I already have set up with them. If people can’t find you and don’t know about you, what’s the point?

What are your first impressions of Facebook for Business?

Has Google+ Decreased Your Facebook and Twitter Usage?

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ReadWriteWeb author Richard MacManus asked a question on Google+ about whether or not people’s Twitter and Facebook usage has gone down since they started using Gooogle+. He received over 60 responses (more than he received on Facebook or Twitter) and it seems the census is a yes. It has significantly changed how much his followers are using the other social networks.

Some of the comments were:

  • “it’s replaced Twitter totally for me… and will slowly replace Facebook as more friends get over here”
  • “Living here now. I find it interesting because I’ve circled a lot of people who I don’t know and am gaining a wider perspective than on any other social network I’ve used before”
  • “Don’t read twitter any more, Reduced facebook usage, increased use on Quora and Namesake”
  • “Using all three, but am using FB and Twitter less than usual. Still trying to figure out exactly where G+ fits in (and wait for others to join)”

MacManus also gave 2 examples of Google+ power users who were previously avid Twitter users, and showed that  both have decreased their Twitter usage quite a bit.

Although he admits the survey was both unscientific and a little biased, it still makes you ask the question if Twitter and Facebook should be worried.

So, let’s do our own little survey here: Has Google+ decreased your Facebok and Twitter usage?

Facebook Will Not Allow Google+ Ads, So Don’t Even Try It!

Author:

You might have seen this story over the weekend where Michael Lee Johnson ran an add on Facebook asking people to add him to their Google+ account. What happened? Facebook removed the ad after only an hour and also suspended his entire advertising account with them.

Ouch Facebook. Ouch.

Here’s the email Johnson received from Facebook after his account was suspended, which he posted on his Google+ profile:

Your account has been disabled. All of your adverts have been stopped and should not be run again on the site under any circumstances. Generally, we disable an account if too many of its adverts violate our Terms of Use or Advertising guidelines. Unfortunately we cannot provide you with the specific violations that have been deemed abusive. Please review our Terms of Use and Advertising guidelines if you have any further questions.

The moral of the story: Don’t try to advertise a Facebook competitor on Facebook.

What was Johnson’s message to Facebook on his Google+ posting?

P.S; Facebook – You Suck.

He’s deleted his personal Facebook account, but not the one he uses for work.

Do you think Facebook is justified in deleting the ad and suspending his entire account?

Source: ReadWriteWeb

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