marketing
The Third Screen
In digital marketing, the third screen is often seen as the “holy grail” since it is a device that most users have with them 24/7. However, that doesn’t mean advertisers have the right to “spam” people at all hours with messages, no matter how targeted.
Slideshare on The Third Screen
http://www.slideshare.net/augustinefou/three-screens-the-third-screen-in-marketing
Prediction: Groupon is/will be the biggest pump-and-dump scheme of all time (or in recent memory)
Founders and prior-round investors are very shrewdly taking MOST of the money off the table … this year (or next), when they go public, “joe consumer” will be left holding the bag when Groupon’s shares implode on the public market. Just sayin’…
Here’s why:
- nothing proprietary or even protectable
- big competitors like Google and Walmart, established competitors like Yelp and OpenTable, and startups like Scoutmob (email based Groupon) have already copied their offering in various forms
- large percentages of the funds raised are used to cash out prior-round investors (never a good sign)
- the remaining funds that are put towards operations are spent on “feet on the street” which is manual labor in an age of digital and movement away from manual and offline.
Some more related data for your consideration:
From BusinessWeek
Groupon, Bankers Said Discussing 2011 IPO
From TechCrunch
Groupon Raises, Like, A Billion Dollars
They closed on roughly half of it then, fromDST, Fidelity and Morgan Stanley. We then learnedthat Kleiner Perkins was also in the round.
Now we have the rest of the details, and the company will issue a press release today on the round. True to their never be totally serious attitude, the press release will be titled Groupon Raises, Like, A Billion Dollars.
A whole slew of new and existing investors are participating in the round, which values Groupon at a whopping $4.75 billion. Investors in this round include Andreessen Horowitz,Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Digital Sky Technologies, Maverick Capital, Silver Lake Partners, and Technology Crossover Ventures. As we previously reported, Allen & Company LLC acted as financial advisor.
BIG, well-established competitors already offering the same exact discounting mechanism — including Google and Walmart.
When many of the web 1.0 and even web 2.0 group buying services started, users were not in the habit of sharing. Now they are and they have the places to share, such as Facebook. Walmart is now crowdsourcing deals.
When NOT to use Groupon as an Advertiser
And this was the last straw — this is where Groupon frickin’ lost me … $2,500 off liposuction!!!
Pricing Mistake on Dell’s MacBook Air V13?
V13, the ultrathin laptop unit with Core 2 Duo from Dell was $399.00, half off! Was this too good to be true? Maybe.. Screencaptures below of the whole checkout process…
Anyone else get this deal?
Not 1, Not 2, Not 3, But 4 Display Ads Per Pageview – Shame on You Facebook
Updated May 12, 2012. Freddy Nager, Prof of Integrated Marketing at UCLA sent me a screen shot showing 9 display ads per page. The unscupulosity of Facebook is at an all time high – right up to their IPO.
THANKS Freddy Nager @AtomicTango, Prof of Integrated Marketing, UCLA for the screen grab of 9 and 10 ads per page.
http://atomictango.com/2012/04/20/myspace-facebook-continued/
Updated February 3, 2012. This is how Facebook is growing ad revenues – SEVEN DISPLAY ADS PER PAGE – EVIL!
But despite this kind of “cheating” their revenues are decelerating. And there is the “danger” of advertisers getting smart and changing from paying on a CPM basis to paying only on a CPC basis — paying only when they get the click. That would mean Facebook’s revenue could drop off a cliff.
Source: http://www.businessinsider.com/chart-of-the-day-facebook-revenues-are-decelerating-2012-2
Updated: FIVE (count ‘em) 5 ads per page – SHAME on you Facebook – the highway robbery gets worse. Advertisers, quick, go to CPC (don’t pay CPMs any more).
Multiple ads on the same page run up the impression numbers, but artificially depress click-throughs because even if they wanted to, users can only click on one ad at a time. Shame on your Facebook for overtly and systematically robbing advertisers who pay on a CPM basis.
But then again shame on you advertisers who still pay CPMs when you can easily click a radio button to select CPC — Facebook even suggests a range for you automatically (see inset below).
What is the advantage of paying by CPC (cost per click) instead of CPM (cost per thousand impressions)? Well, remember the old ad industry joke “I know I am wasting half my ad dollars, I just don’t know which half” — well, now you know. In fact, you now know you are wasting 99% of your ad dollars to wasted impressions that get no action/clicks from users AND you know which 99%. See infographic below. So stop paying CPMs and start paying CPCs TODAY. Your ad budget will thank you!
Just how DISMAL are Facebook advertising metrics and benchmarks (click to see )?
According to data from comScore, in Q3 2010, Facebook served 297 billion display ad impressions giving it 23% of the U.S. market for display ads. In digital channels, since there is no longer the physical limitation of time (airtime on TV) or space (area to put ads on dead-tree pulp) companies can create “inventory” out of thin air and magically increase revenue on the backs of advertisers still willing to pay for impressions. I guess it really is caveat emptor.
Proposal for Magazine Companies
Magazine companies should overtly, deliberately, and systematically “cannibalize” themselves by offering to current print subscribers to “go green” by opting out of print issues and opting in to digital issues only, just like credit card companies have allowed users to opt for electronic only delivery of statements, saving millions in printing and postage costs, not to mention trees.
Free #FAIL – another example where “free” does not work
Duane Reade grand opening of a store — had guys offering free coffee — from a BACKPACK dispenser! Let’s just say Duane Reade is not known for its coffee. And even if people stopped for coffee, they didn’t even get the person to enter the store. Anyway, I am sure all of this was thought through when the marketing campaign was planned.
When planning a marketing campaign, ask the hard (or easy) questions — what does the brand stand for? Does the marketing program reinforce the brand? Does it drive desirable actions (like people actually going into the store, not to mention drives sales). And definitely don’t do stuff that will make people go “huh?” and then run away even faster.
What is Web 3.0? Characteristics of Web 3.0
2009 06 16 What Is Web 3.0 – Presentation Transcript
- What is Web 3.0? Dr. Augustine Fou June 16, 2009. June 16, 2009.
- Evolution of the Internet microprocessor 40 yrs 10 yrs 20 yrs 5 yrs present web internet 2.5 yrs social networks e-commerce 1.5 yrs Web 1.0 Web 2.0 Web 3.0? June 16, 2009.
- Evolution of the “Web” content commerce search social networks social content social search social commerce As each stage reaches critical mass, the next stage is tipped into present June 16, 2009.
- Key Characteristics present web 1.0 web 2.0 web 3.0
- Speedy
- more timely information and more efficient tools to find information
- Collaborative
- actions of users amass, police, and prioritize content
- Trust-worthy
- users establish trust networks and hone trust radars
- Content
- content destination sites and personal portals
- Search
- critical mass of content drives need for search engines
- Commerce
- commerce goes mainstream; digital goods rise
- Ubiquitous
- available at any time, anywhere, through any channel or device
- Individualized
- filtered and shared by friends or trust networks
- Efficient
- relevant and contextual information findable instantly
June 16, 2009.
- Illustrative Examples – retail/shopping present web 1.0 web 2.0 web 3.0
- what friends bought or want to buy
- drag-to-share items which friends know friends are looking for
- item collections
- value in the aggregation
overstock.com amazon.com FB app: MyFaveThings
-
- contextual reviews
- reviews of reviews
- what others bought
- individualized recommendations
June 16, 2009.
- Illustrative Examples – social networks present web 1.0 web 2.0 web 3.0
- aggregates all your online identities
- syndicates all your updates to all social networks
- social actions visible to friends
- trust networks across geography, time, and interests
- collection of personal homepages
geocities.com facebook.com peoplebrowsr.com June 16, 2009.
- Illustrative Examples – restaurant reviews present web 1.0 web 2.0 web 3.0
- Yelp content vetted through a user’s trust network and individual recommendations made based on situation and need, in real-time
- user submitted reviews
- related items based on similarity of user preferences
- infrequent publication
- centralized editorial control
zagat‘s yelp need reco for great Italian + GPS + Yelp 5-star Babbo, been there, love it June 16, 2009.
- Illustrative Examples – photos present web 1.0 web 2.0 web 3.0
- real-time, contextual “do you like this knit shirt?”
- friends give immediate feedback
- share photos with friends and strangers
- enable visitors to tag and comment
- individual albums
kodakgallery.com flickr.com ? June 16, 2009.
- Illustrative Examples – real estate present web 1.0 web 2.0 web 3.0
- information vetted by fellow users, recommended directly an in context
- listings plus relevant information like school zones, comparable sales, alerts
- listings based on parameters
corcoran.com streeteasy.com trulia iphone app June 16, 2009.
- Illustrative Examples – encyclopedia present web 1.0 web 2.0 web 3.0
- content is ubiquitous and available through any channel or device
- trust network proactively forwards relevant info to user who needs it
- created, updated, and edited (policed) by user actions
- digitized version of printed encyclopedia
britannica.com wikipedia.com chacha.com June 16, 2009.
- Illustrative Examples – online coupons present web 1.0 web 2.0 web 3.0
- coupons delivered contextually and proactively when user needs it (without the user even asking for it)
- instant feedback
- community action makes it more accurate and useful for others
- collection of online coupons – value in the aggregation
dealcatcher.com retailmenot.com June 16, 2009.
Facebook advertising metrics and benchmarks
Summary
Facebook click-through rates of 0.01 – 0.05% (Facebook CTRs)
Facebook effective CPMs turned out to be $0.01 – $0.19 (Facebook eCPMs)
Facebook average CPCs ranged from $0.05 – $0.25 (Facebook CPCs)
Other social media benchmarks from my experiments (Adwords, StumbleUpon, PayPerPost / Izea) can be found here.
Comparison of click-through rates for search ads versus display ads
As a scientist, I like to run experiments. And I like to make stuff. So my team and I made a few Facebook apps that solved needs that we had (a few samples listed below) and shared them publicly on Facebook to see if they were also useful to other people too.
I beta tested some apps with a few friends by inviting them directly. Then to get it out to a larger number of people, we decided to try Facebook advertising, the much-hyped, holy grail of display advertising on one of the largest and most active social networks.
http://apps.facebook.com/netflixr/
- visual discovery, share, and queue management interface for Netflix
http://apps.facebook.com/musicsamplr/
- visual discovery and sampling interface for music (Amazon backend)
http://apps.facebook.com/phreetings/
- create and send photo or video e-cards by drag and drop (Flickr and YouTube backend)
http://apps.facebook.com/visualfriends/
- visual display of your friends (closest ones have the most recent status updates)
http://apps.facebook.com/myfavethings/
- social commerce – I’ll buy what he bought; things I have, things I want
But what I found was eye-opening to say the least. Despite the potential of social ads where the social actions of your circle of friends could make the ads more targeted, none of the anticipated positive effects were observed. Despite the promise of mass reach, there was not the corresponding attention or clicks. And despite the use of demographics-based targeting, there was no statistically significant difference between different targets nor the control sample, running during the same time period.
What we saw were click-through rates of 0.01 – 0.05% — and the 0.01% often seemed like rounding because they did not report more than 2 decimal places. As a result of these click rates the effective CPMs turned out to be $0.01 – $0.19 and average CPCs ranged from $0.05 – $0.25. I’ve been running these Facebook ads for more than 12 months; and millions of impresisons later, there is no observable improvements to CTRs and thus CPMs and CPCs. But since I set up the campaigns to only pay when there is a click (CPC basis), I can let these run indefinitely because I am getting so few clicks, it’s not even making a dent on my credit card (which I use to pay for the ads).
detail of low click through rates of facebook display ads
Ideas for Facebook
In the spirit of openness, as an advertiser who wants to continue using Facebook advertising, perhaps there are a few things they can do to improve the effectiveness of Facebook display ads.
1. reduce the number of ads per page to 1 – displaying multiple ads artificially depresses click-through rates because users can only click on 1 thing at a time, even if they liked more than one of them. Displaying 3 on a page simply increases the denominator while the numerator does not increase — in the click-through rate equation: clicks / impressions.
2. make ads sharable – in the rare instance a user views an ad, it may or may not be relevant to her, but she may know that it is relevant and timely for a friend. By making ads sharable, she can click and send to a friend, who is very likely to find it useful and valuable, especially having been sent by a friend.
3. let users opt-in to ads in specific topic categories - when users are in the market for specific things, they are more likely to subscribe to pertinent news feeds, offers, etc. related to that topic or category. By giving users more power over what they want to see, it will also give advertisers more targeted and engaged prospects to target.
4. expand search-based advertising – when users search they are looking for something and are open to discovering something they didn’t know to ask for. So ads served up in response to a search is usually a lot more effective than ads served up simply when a page is loaded (display advertising). Facebook can serve display ads based on pertinent search queries.
Earth to Facebook… anyone listening?
By Dr. Augustine Fou. Dr. Fou is Group Chief Digital Officer at Healthcare Consultancy Group a group of agencies within the Omnicom family specializing in pharma and healthcare. He helps clients develop digital marketing programs or improve the efficiency and cost-effectiveness existing campaigns via advanced analytics, social marketing, and digital strategy. You can read more of his writing on digital marketing on this blog and follow him on twitter @acfou.
Revision 6/30/2009: Facebook Click Fraud
Excerpt from TechCrunch: “Click fraud is serious business on the big search engine advertising networks because the bad guys can make serious money. Sign up for an Adsense account and put those ads on parked domain names or wherever. Then all you have to do is start clicking those ads like crazy, using bots or cheap labor.” On Facebook, “advertisers are clicking on competitor ads to drive up their costs and drive down their ROI.”
“So the bad guys just create thousands of fake Facebook accounts with a wide variety of demographic information. This sounds like a lot of work, but it’s highly automated. the going rate was just $10 per 100 accounts if you supply the unique email accounts. Once the accounts are created, they use software to fill out the varied demographic information, and that software also manages all these accounts. The fraudster then logs in to Facebook via these accounts and views the ads that are displayed. The right competitive ads come up and Bingo, the software then clicks them. Facebook rules allow an account to click any advertisement up to six times in a 24 hour period, and all those clicks are charged. All you need is a few accounts to view the ads and then click to the max.”
http://www.techcrunch.com/2009/06/26/facebook-click-fraud-101/
http://www.techcrunch.com/2009/06/21/facebook-admit-click-fraud-problem-says-fix-coming-today/
Despite click fraud, the click through rates are still incredibly low. So if you subtract all the click fraud, is ANY advertiser making ANY money from facebook advertising?
Others have found similarly dismal click through rates from Facebook advertising
Source: http://www.friendswithbenefitsbook.com/2008/04/07/facebook-ad-click-through-rates-are-really-pitiful/
Facebook Ad Click-Through Rates Are Really Pitiful
April 7, 2008 – 5:03 pm
Quite by coincidence, I’ve encountered a few statistics on Facebook’s advertising platform. I thought I’d post links to the results I’ve uncovered, in case anybody is wondering about average CTR rates for Facebook.
First up, Rod Boothby got a click-through rate of 0.01%:
This week, I ran $105 worth of Facebook Fliers. That bought me 52,500 impressions. It looks like the flier bought me about an extra 500 site visits. That’s about $0.21 per hit.
Michael Ferguson ran a bunch of Facebook ads for Kinzin:
Click-through rates are abysmal. I was running the identical ad in about 15 different regions (you need to run them as separate ads to get the stats broken out), getting just over 10M views. Our average clickthrough rate was 0.06% (that’s 1 in 1513, for those counting at home). The best we did anywhere was 0.14%.
He later reports that the conversion rate was “at a pretty reasonable clip” at about 5%. By ‘conversion’, I think he’s meaning people who actually signed up for Kinzin’s free service. All of this stuff is contextual, but if visitors had to lay down money, the conversion rate would be considerably lower.
The folks at Valleywag report similarly dismal numbers:
Media buyers — the agency people who book campaigns — report that the college social network is a truly terrible target. They’re mainly students, with low disposable income, of course; but, beyond that, the users appear to be too busy leaving messages for eachother to show much interest in advertising. Facebook’s members appear indifferent even to movie advertising aimed at their demographic. Clickthrough rates, the percentage of time users click on an ad, average 0.04% — just 400 clicks in every 1m views — according to one report seen by Valleywag.
From AllFacebook:
Fred Wilson has been updating the world about his venture in Facebook advertising over the past week. Today, Fred posted and updated screenshot of his ad campaign’s performance and it doesn’t appear to be too stellar. For one of his campaigns, out of 10,080 impressions there were only 8 clicks. The average cost-per-click for Fred was $0.08 and the average CPM was $0.06. This is a less than stellar performance. This is nothing new though.
And lastly, from a digital student marketing blog in the UK. This would seem like a natural fit for Facebook’s audience:
Our most recent campaign saw 1.4 million page impressions delivered at specific universities – and only a 0.04% clickthrough rate. Ouch.
Click-through rates seem to sit around 0.04%, which is profoundly lame if you ask me. I’m no online advertising expert–it’s not really our thing–but I’ve run a bunch of Google AdWords and other contextual advertising campaigns. We regularly get click-through rates of 3%, and I gather that’s nothing special.
Here’s my theory on Facebook: it’s a silo. People visit the Fun House of Facebook, and conceptually treat it slightly different than the rest of the web. They’re in Facebook, interacting with friends, playing games, sending messages and now chatting on IM. As such, they’re really unmotivated to leave. Who wants to leave the Fun House?
We’ve seen similar results across Facebook. It’s really difficult to drive visitors out of the app and to your own website.
Digital Consigliere
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.
http://twitter.com/acfou
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Prototype Web Services
- drag2share – quickly share news items by drag and drop on email addresses
- LivePhotoFrame – upload and remotely manage a digital photo frame via unique URL
- MedleyTuner – create a continuous listening experience by uploading mp3s
- MusicSamplr – discover new artists and music, listen to samples
- SharedMost – what links on ANY webpage are shared most?
- Signatory – sign and date a document and verify it hasn't been altered since that exact time.
- WebTeleprompter – just what it says it is
