The Social Media Week Series will focus on insights gained from several sessions from Toronto's version of the Feb. 2011 conference. This post will focus on the current social media behemoth: Facebook.
Facebook - Friend or Foe?
From its humble beginnings in a Harvard dorm room to the multi-billion dollar behemoth that dominates the Internet, Facebook is the social network that has slowly become an integral, if not essential, part of our lives. It has not only transformed the way in which people consume information and interact with each other online, it has also opened up a new channel for marketers to reach and engage with their consumers. But does Facebook's ever-growing stranglehold on the Web result in barriers as well as opportunities?
At "The People of the Web" session at the MaRS Centre for Innovation, presenter Steve Irvine of Facebook Canada took the audience through a few examples of ways in which the social network is changing both how people use the Web and how marketers do business.
In this post, I'll explore how Facebook has impacted (and will impact) both consumers and marketers - for better and for worse.
The Age of Discovery
According to Irvine, the Web of the 90s was oriented around the act of "browsing" - it was linked via a series of web pages and users had to follow hyperlinks to get around, often using portals like Yahoo and Excite as their home bases (see my previous post on this topic, which referenced Wired's article "The Web is Dead"). To get viewed, marketers had to ensure that their web pages had a prominent place within a portal's web directory.
In the 00s, the Web was driven by search - people used search engines like Google as their primary means of accessing relevant information. As such, Google was, and still is, the home page for many people. Its functionality has even been built into most Web browsers. To get viewed, marketers had to optimize the key words and meta tags within their web pages, as well as encourage other web pages to link to their own, in order to get optimal placement within a search engine's results.
In the next decade, Irvine posits, the Web will be oriented around people - users are increasingly looking to their friends, through social networks like Facebook, Twitter, and Mashable, for relevant information and content. Irvine calls this "The Age of Discovery", one in which people no longer need to browse or search for information, but rather "discover" it on an ongoing basis, through their friends online. For many Internet users, Facebook has replaced Google as their homepage - with their newsfeed being their go-to source of information. To get viewed, marketers must plant links and content within these social networks and hope they get spread through friends of friends.
The People of the Web
Another element of the Web that social networks like Facebook have fundamentally changed is the way in which users identify themselves. Over the last decade and a half, users of the Web had been trained to never use personal or identifying information when interacting with others on the Internet. It was the first thing that your mother told you when you got your first Internet connection. Users had screen names, ICQ numbers, cartoonish avatars, and more - all in an attempt to mask their true identities.
Enter social networks like Friendster, MySpace, and Facebook. Unlike past social networking tools, these sites encouraged (and in the case of Facebook, practically mandated) the use of personal and identifying information. Out went crazy screen names and email addresses like "deathtrooper_501@yahoo.com" and in came real names - first and last. Out went avatars and in came real profile photos. New information - which were previously Web no-nos - was added as well: cell phone numbers, education and work history, even relationship statuses. Authenticity in how you represented yourself on the Web is now key, as social networks have worked to digitize your meaningful (and sometimes not so meaningful) relationships from the real world. All of a sudden, users were no longer strangers hiding behind aliases - they had become "The People of the Web".
With people now representing their own personas online and the Web now becoming oriented around the information and content that they shared, the opportunity for people to become influencers on others arrived. This, according to Irvine, has brought forth "The Democratization of Influence". Unlike the past, where people had to rely on a few major personas - like Oprah and Martha Stewart - for advice and recommendations, people are now turning to themselves. In a sense, with social media, we are all Oprah, and we all have the opportunity to influence others through the advice and content that we share.
A New Channel for Engagement
With over 16 million Canadians on Facebook, many of whom log in at least once every day, marketers now have a brand-spanking new channel with which to engage with their consumers, these "People of the Web". In the new marketing mix, owned media (a property or website owned by a brand) and paid media (advertising that a marketer pays for in order to appear in someone else's media property) have become less important. With more people spending their time on social networks and consuming information that is shared by their friends, earned media (formerly the domain of PR and word-of-mouth marketing) has taken center stage. Many marketers are now just looking to be talked about. Everyone wants to go viral.
Facebook allows them to attempt this in several ways. Originally, brands tried to build a following of "Fans" - a group of their core consumers who were proud to include their affinity for a brand as a means for helping to identify themselves. Being labeled as a "fan" may have proven too much for some people, however, and Facebook has since lowered the perceived commitment by using the word "Like" instead. Marketers now lose sleep over finding new ways to get more people to "Like" their brand on Facebook - not only does this broadcast that message to person's list of friends, it allows the brand to communicate with those who "Like" them in the future. And although the quality of a brand's fan base is important, quantity is, too. As Irvine puts it, "Fans are more valuable when they impact their friends."
"We think every industry is going to be rebuilt around social engagement. News, health, finance, shopping and commerce...all of these things will be rebuilt by companies that work with us to put social at the core." - Facebook’s Chief Operating Officer Sheryl Sandberg
Being active in the newsfeeds and pages of "The People of the Web" seems to have a major impact on ROI, as well. "Sponsored Stories," a relatively new feature on Facebook that re-purposes newsfeed stories as ads that appear to the friends in one's network, result in advertising that uses the names and profile photos of one's friends in order to engage. And according to Irvine, it works: when consumers see an ad with their friend's name in it, brand recall increases 1.6x, message recall increases 2x, and purchase intent increases 4x compared to an ad without that information. This type of personalized engagement, made relevant by including the influence of one's friends, represents a huge opportunity for marketers looking to "fish where the fish are".
Trapped in Paradise
There's a problem, however: Facebook is beginning to grow a bit too powerful. According to eMarketer, Facebook's share of online display advertising in the U.S. market has grown from 2.9% to 13.6% over the last two years. A recent article from the Wall Street Journal titled "Facebook's Web of Frenemies" touched upon the increasing fear among other firms that the social network's dominance might not be such a good thing. Why? The more dominant a channel is, the more control it has over how marketers can use it.
"Silicon Valley companies increasingly have to decide whether to treat Facebook like a friend whose reach and user data can help propel their own growth, or a foe that can become a destructive force." - The Wall Street Journal (Feb. 15, 2011)
In fact, Facebook's attempt to become an all-encompassing "Platform for the Internet" has transformed it into a giant walled-garden. Dan Rose, Facebook's VP of Partnerships and Platform Marketing, calls the partner-platform relationship an "equal value exchange". But is this truly the case? Facebook has total control of the means in which brands can interact with and engage with its users. Ad placements and units, though they exist in more than one variety, are tightly controlled and pre-defined. The network is also defined by a series of rules that are placed on both content and how that content is served up. Even the layouts of individual brand pages must follow the same, Facebook-mandated template. In the world of Facebook, the differentiation that brands work so hard to build with unique websites and online experiences is practically lost.
Another problem that may crop up as advertisers begin to jump on the Facebook bandwagon: clutter. Over the past year, the amount of space on one's homepage and friends' pages that is devoted to advertising has increased dramatically. And as brands become more active in engaging with their fans and encouraging them to share brand-related content and news with their friends, newsfeeds will begin to clog up with too much advertising. When that happens, Facebook will have to deal with the problem that traditional media companies have had to face over the last two decades: people will stop paying attention. They will ignore. They will tune brands out. And they will get sick of engaging with brands in this space. And just like media companies, Facebook will eventually have to loosen up and get creative in how it allows brands to use its platform. Brand integration, anyone?
The Portable Social Network
All is not lost, however. The growing popularity of the social network, and the ability for it to integrate itself with, impact, and influence one's choices beyond the Web, offers a realm of endless possibilities. Imagine if Facebook becomes the key identification system for users of the Web, with people using their Facebook account info to log into and facilitate registrations and transactions (this is already starting to happen). Imagine if Facebook could integrate itself with other increasingly-connected devices, like videogame consoles, television sets, fridges, and cars (again... this is already in the works!). People could turn to their social network for recommendations on game downloads, TV shows, what to have for dinner, or what route to take to the cottage. One only has to picture what can be possible when you have your social network with you...
"[Facebook is attempting to] build out what's known as a platform for the Internet, which other websites, cellphones and now even cars can use to build their own offerings to allow people to take their friends and preferences with them." - The Wall Street Journal (Feb. 15, 2011)
What do you think of Facebook - friend or foe? What opportunities are you most excited about? What barriers do you wish weren't there?
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