Facebook at 10: How it grew from a social network to a social phenomenon
Besides changing the status quo of the business world, Facebook has also had an impact on how companies interact with customers. As Coffee alluded to earlier, it’s a change in social behavior that’s at play here. Before, digital marketing included programs involving email, banners, websites/microsites, and text-messaging. There was also this notion about online advertising, but that was a cost-per-impression / pay-per-click model whereby businesses would pay to have a text-based ad featured when a specific search query was entered into Google, Yahoo, and Bing.
Over the past few years, Facebook has been releasing new advertising products aimed at helping monetize its platform and also giving businesses a reason to use it. Instead of displaying banner ads, Facebook decided to leverage the data it holds about users to make sure that the campaigns are relevant to them.
It hasn’t always been an easy road to implement updates to its ad platform. In 2007, when it released Beacon, the community responded saying that it was no good, citing privacy concerns. After a class-action lawsuit, Facebook changed the program to require explicit opt-in from the user for third-party sites to publish data to the social network.
Amid the controversy, Facebook’s advertising offering has given businesses the ability to reach their targeted audience. Unlike with search engine marketing where you’re hoping that the people typing your targeted search queries are your intended audience, Facebook’s platform enables a marketing manager to schedule ads to be displayed when specific ages, locations, interests, and other conditions are met.
To help mobile app developers gain more downloads, Facebook has become one of the first to introduce mobile app install ads. These are ads that appear when a user is on a mobile device, offering the option to install an app compatible with that device. Facebook touted that these install ads generated a 50 percent higher click-through rate and 8-10x reach for its trial partners.
Since their launch, Facebook has been modifying mobile app install ads occasionally, giving advertisers more ways to customize targets. Now ads can be displayed based on a user’s data plan, operating system, or even by unique calls-to-action like “Open Link”, “Use App” and “Shop Now”.
Based on last quarter’s earnings, Facebook’s ad platform is a success — at least for Zuckerberg’s company. In Q4 FY2013, it generated $2.34 billion just from advertising — a huge chunk of the company’s revenue (payments and other fees was $241 million). Of the amount generated from advertising, 53 percent came just from mobile.
And while Facebook has offered businesses new tools to converse with their customers, like Pages, Questions and more, perhaps the biggest win for the company is its ad platform. No longer do you need to pay, spray, and pray when doing advertising — social media has evolved the game and Facebook certainly capitalized on it.
Next: Growing offline and supporting the community