TO: High-Level Business Executives
FROM: The Executive Whisper
Introduction: Why Facebook Matters
Facebook’s goal, as stated by its 24 year-old founder and CEO (yes, 24) Mark Zuckerberg, is to become the main tool people use to communicate for work and pleasure. His grand plan envisions the social networking site evolving into the central hub where everyone chats with their friends, shares photos, watches videos, plans get-togethers, networks among business colleagues, and plays games. It becomes the primary destination where we – as in all of us who have internet access – go to live our digital lives. An ambitious goal to be sure. But Facebook is well on its way, and may in fact, come close to achieving its desired online dominance.
Half the Story: Facebook is a massive media property
Facebook touts more than 175 million active users and is growing at the astounding rate of about five million new users a week. It’s the 4th most-trafficked website in the world; has over 55,000 regional, work-related, collegiate, and high school networks; and more than 6 million active user groups. If Facebook were a country, it would have a population nearly as large as Brazil’s.
While it began as a website for U.S. college students, it has quickly outgrown that description and now more than half of Facebook users are outside college, and the fastest growing demographic is those 25 years old and older.
Both 2008 presidential candidates made Facebook a significant part of their campaign efforts. The Democratic Party in Maine is using it to organize regular meetings. Accounting firm Ernst & Young relies on the site to recruit new hires, and Dell will soon do the same. Microsoft’s new operating system has a slew of features lifted straight from Facebook’s playbook. And scores of Fortune 500 companies, not to mention hundreds of thousands of small and mid-sized companies, are leveraging Facebook’s pages and groups to highlight their products, run promotions, share information and interact with customers. And most of these companies pay absolutely nothing to Facebook.
There’s no denying Facebook is a massive media property. However, it offers something no traditional media company ever dreamed of. With its addictive, interactive qualities – the typical user spends an average of 169 minutes a month on the site compared to a mere ten minutes a month for the New York Times website – Facebook is gathering a rich, personal data stream of all its users. With this information, it can offer micro-targeting unlike any other media property, including Google, because it’s capturing people’s intent, that is, what they are looking for, what they desire, what they want to learn about, as well as monitoring their current thoughts and activities.
The Other Half of the Story: Facebook is an applications platform
However, media is only half the store. The other half is the Facebook platform. But the platform story, with its enormous potential, is still unfolding and either it may allow the 5 year-old company eventually to topple Google and Microsoft or it may prove to be the site’s ultimate undoing.
The platform story began in May, 2007, when Facebook offered unprecedented access to its API (what is API any way?). This allowed third-party software developers to build applications that enhanced what users could do on the site – a concept similar to the iPhone Apps store. Since then, companies have created thousands of applications that, among other things, enable friends to share restaurant and book reviews, play chess and Scrabble, and even send each other good Karma. An enormously well-known example is the recent Burger King Whopper Sacrifice promotion. This popular Facebook application offered users a coupon for a free Burger King sandwich if they dumped or “unfriended” 10 of their Facebook friends. It garnered tremendous publicity for the fast-food chain, but also broke Facebooks platform engagement rules, saddened many social misfits, and was shut down.
Unfortunately, many shoddy and unscrupulous apps have also been introduced that have led to a great deal of spam and complaints from Facebook users and have threatening the platform’s appeal. This has forced the website to alter its engagement rules and continuously tweak its oversight of the program.
Once, and if, Facebook works through the various issues with its platform system, it has the potential to deliver enormous value to its users, again similar to iPhone apps, keeping them engaged and interacting within the Facebook virtual world, which opens the door to incredible marketing possibilities and data-gathering opportunities to businesses.
How important is Facebook for businesses and the evolution of marketing?
Standford professor BJ Fogg, a pioneering persuasion psychologist who founded the Persuasive Technology Lab at Stanford, offered this to BBC News, “When Facebook came along I was one of the developers at the launch and what struck me was how there was this new form of persuasion. This mass interpersonal persuasion… [B]asically Facebook sets up an environment where your friends do the persuading.”
Professor Fogg concluded, “Facebook has changed the game for all consumer-facing companies. If you want to reach and influence everyday people, you’ve got to understand Facebook.”
Over the next two weeks, we’ll analyze different aspects of this game-changing social phenomenon and present information that businesses today should know and actions they should take to succeed in a Facebook world.
Topics we’ll cover include: Facebook Pages and Groups, Engagement Ads, Facebook Connect, Case Studies, and President Obama and Politics.
