Facebook’s Magic Number 16%

Source: http://www.businessinsider.com/facebooks-entire-brand-advertising-business-boils-down-to-one-number-16-2012-3

 

Sheryl Sandberg at Facebook

One secret reason why Facebook ad revenues haven’t quite taken off like they should – and are, in fact, decelerating – is that for years now, brands have advertised on Facebook without paying Facebook.

Here’s how they’ve been doing it:

  • Brands build a “page” on Facebook.
  • Facebook users become “fans” of that brand page, thanks in part to ad campaigns off Facebook.
  • The brands post video, photos, or text to the page.
  • That content goes into fans’ News Feeds.
Yesterday, in front of more than 1,000 advertising executives here in New York, Facebook announced a new ad product it hopes will finally convince brands to do more than use Facebook’s free features.
The pitch boils down to a number: 16%
When a Facebook page owner posts a piece of content to their page, and that content gets disperse red into the News Feeds of that page’s fans, only 16% of those fans will actually see that piece of content.
Facebook’s new ad product, called Reach Generator, is supposed to take that number, 16%, and push it toward 100%. Test campaigns pushed it past 95% in some cases.
Basically, when a brand buys into a Reach Generator campaign, Facebook will push posts from that brands page into its fans’ News Feeds, mobile News Feeds, and log-out screen until almost all of that brand’s fans see it.

 

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By: Dr. Augustine Fou Thursday, March 1st, 2012 display advertising

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Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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