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Inside Facebook

Inside Facebook

Facebook roundup: Optimal, Instagram, TBG Digital, action spec ads

Posted: 11 May 2012 06:00 PM PDT

Optimal launches free tool ranking brand pages - Optimal, Inc., the creators of Optim.al, a social media advertising and audience data platform, released its Optimal Index to rank brands on Facebook by a metric besides Likes. The index is calculated by taking a brand page's engagement rate, multiplied by the weighted-average of Facebook's cost per click estimate for the page, multiplied by the number of Likes the page has. Walmart is currently the highest-ranked page in the index.

FTC launches investigation into Instagram acquisition - The Federal Trade Commission has begun an investigation into Facebook’s acquisition of Instagram that could delay the closing of the deal. The investigation does not imply any wrongdoing. The agency looks into most mergers valued at more than $66 million. Facebook bought Instagram for $1 billion.

TBG study shows how Facebook ad CTR varies by industry – Ads for beauty and fitness brands had the highest clickthrough rate on Facebook, according to an analysis of billions of ad impressions from 235 TBG Digital clients in the past year. Finance-related ads had the lowest CTR. Other industries’ average CTRs by day can be seen to the right. This information can help companies benchmark their own success with Facebook ad campaigns.

Facebook releases ad preview tools - Facebook now offers developers an Action Spec Preview Tool to help them preview what Sponsored Stories for their apps will look like using the new action spec ad beta. Facebook also launched an ad preview API for previewing ads for existing ad groups, ad creatives and creative specifications.

Inside Facebook’s pre-IPO hype

Posted: 11 May 2012 02:05 PM PDT

Facebook has completed the first week of its roadshow appearances ahead of an initial public offering that could value the company at up to $96 billion when it lists its shares on the Nasdaq next week.

Many analysts are bullish about the stock, with Sterne Agee initiating coverage at "buy" and Wedbush Securities assigning Facebook an "outperform" rating, according to the Wall Street Journal. The social network set its price range at $28 to $35 a share. The range was lower than some might have expected, considering that company shares went for $44.10 on secondary exchange SharesPost in March. Now CNBC reports that the company plans to increase that price range based on the demand it saw this week and Reuters reports that the IPO is already "oversubscribed" with eager investors. Then again, Bloomberg's sources say that demand has been lower than expected.

Executives are expected to continue to meet with investors around the country next week before setting a final stock price on Thursday and floating the shares on Friday. Here is a recap of what happened since Facebook began its roadshow and what effect it might have on the IPO.

Last month, the social network reported revenues of $1.058 billion for the first quarter of the calendar year — a 45 percent increase from the first quarter last year, but 6 percent less than the previous quarter. This worries some investors, and Facebook responded with an amendment to its S-1 filing to confirm that the number of daily active users is currently outpacing the increase in number of ads Facebook shows in part because of increased mobile use and product decisions that reduced the number of ads on some pages. For instance, Timeline shows fewer ads than traditional profiles and pages did. The company says in the filing, "Our culture emphasizes rapid innovation and prioritizes user engagement over short-term financial results."

Facebook also issued amendments to address its ongoing patent battle with Yahoo. The social network received a letter from Yahoo warning that technology used in Facebook's Open Compute Project hardware may violate 16 Yahoo patents. So far, Yahoo has taken no further legal action against Facebook, possibly because of the controversy surrounding CEO Scott Thompson’s false academic credentials. Another Facebook S-1 amendment included new information about $796 million in restricted stock units that the company recently granted to employees.

Many investors continue to wonder how Facebook's monetization efforts will perform on mobile devices, where it so far has shown an immaterial number of ads. The company's current model for mobile advertising is also limited in that an advertiser cannot pay to reach whichever users they want. With Sponsored Stories, a user must already be connected to a brand — or have a friend that is — in order to see the brand's content in their feed.

That said, Facebook this week revealed two potential new sources of revenue it is currently testing: paid apps and a way for users to pay to highlight their posts within friends' News Feeds. These are both limited tests, which the company spokespeople downplayed. Although we're skeptical about whether the highlight feature will ever expand to more users and if paid apps will be successful, the new App Center seems to be a good move to encourage developers to stay on the platform and get investors to make comparisons between Facebook and Apple.

There have been some ups and downs, with news of a potential FTC investigation into the Instagram acquisition, and some critiques against CEO Mark Zuckerberg for not showing up to some roadshow events and not dressing more professionally when he did. Most of this seems to be overplayed in the media and is not likely to have an actual effect on the company’s IPO.

In the next week, Facebook executives are scheduled to visit Chicago, Kansas City and Denver before two more days of meetings in Menlo Park, Calif., according to PrivCo. There is no word whether Zuckerberg will attend this portion of the roadshow. So far he made an appearance in New York City and in Menlo Park, but did not visit Boston with CFO David Ebersman and COO Sheryl Sandberg. Some have said this was for security reasons. Others believe it reflects Zuckerberg's disinterest in the financial portion of running Facebook. That could turn off some investors, but it seems there are plenty of others looking to buy in their place.

Assuming the company does not delay the IPO for any reason, it will float its shares on Friday.

Etsy, Kickstarter, pages, music, more on this week’s top 20 emerging Facebook apps by MAU

Posted: 11 May 2012 09:02 AM PDT

Topping our list of emerging applications by monthly active users this week was Etsy, the e-commerce site for vintage and handmade items. There was no common theme among the rest of the apps on our list this week, but a few marketing campaign apps grew enough to be featured here.

We define emerging applications as those that ended with between 100,000 and 1 million MAU in the past week. This week’s top apps grew from between 20,000 and 220,000 MAU, based on AppData, our data tracking service covering traffic growth for apps on Facebook.

Top Gainers This Week

Name MAU Gain Gain,%
1.   Etsy 570,000 +220,000 + 63%
2.   We Heart It 430,000 +120,000 + 39%
3.   Domino’s Artisan Pizzas 2012 520,000 +90,000 + 21%
4.   CNET 150,000 +80,000 + 114%
5.   Kickstarter 160,000 +60,000 + 60%
6.   Eventbrite 200,000 +50,000 + 33%
7.   KAYAK 120,000 +40,000 + 50%
8.   Marvel XP 220,000 +40,000 + 22%
9.   nana10 310,000 +40,000 + 15%
10.   Sorteie.me 840,000 +40,000 + 5%
11.   Sweepstakes 860,000 +40,000 + 5%
12.   好康活動 Hot Deals 330,000 +40,000 + 14%
13.   MapMyRUN.com 300,000 +30,000 + 11%
14.   Nike 410,000 +30,000 + 8%
15.   Offerpop 400,000 +30,000 + 8%
16.   Profile Covers 640,000 +30,000 + 5%
17.   TuneIn Radio 200,000 +30,000 + 18%
18.   Vaseline Men’s 150,000 +30,000 + 25%
19.   Mixcloud 540,000 +20,000 + 4%
20.   PunchTab 130,000 +20,000 + 18%

A group of apps revolved around brands. Domino’s Artisan Pizzas 2012 topped this list, Marvel XP is a Disney website requiting login credentials, Nike and Vaseline Men’s also appeared. Then there were a series of apps designed for page administrators. Sorteie.me in Portuguese, Offerpop and PunchTab offer various tools.

News apps included CNET and the Hebrew app nana10. Pinterest-like site, We Heart It, was second on the list. Other services dependent upon Facebook for distribution purposes, like Kickstarter and Eventbrite made the list, too.

There was a running app, MapMyRUN.com, and a few music-related website apps, TuneIn Radio and Mixcloud.

All data in this post comes from our traffic tracking service, AppData. Stay tuned next week for our look at the top weekly gainers by monthly active users on Monday, the top weekly gainers by daily active users on Wednesday, and the top emerging apps on Friday.

Facebook gauges interest in new way to monetize users: ‘highlighted posts’

Posted: 11 May 2012 08:01 AM PDT

Facebook is currently testing a way for users to pay to promote their posts at the top of friends' News Feeds, a spokesperson confirms to us.

The test, which is limited to a small percentage of users including some in New Zealand, places a "highlight" button next to Like and comment on a user’s Facebook posts. After clicking "highlight," users will be taken through a payment flow. We've seen prices ranging from free to US$2, and users seem to be able to use PayPal, a credit card or Facebook Credits they have saved. The promoted post will appear at the top of friends’ News Feeds with the word “highlighted” below the post.

Although the social network constantly tests new features that do not become implemented more widely across the site, this particular feature is surprising for a number of reasons. Facebook has previously struggled with rumors that it would charge for its service, despite a note on its homepage that says, "It's free and always will be." Asking users to pay for friends to see their posts seems likely to fuel further speculation and hostility from some users. The company is also in the middle of its roadshow leading up to an initial public offering next week. As we noted when Facebook announced Wednesday it would begin a testing paid apps on its platform, it seems unusual for a company to implement potential new monetization strategies at this stage.

However, if tests show that users are interested in the feature, Facebook would be likely to expand its availability and highlighted posts could become a source of new revenue. The test is likely inspired by Tumblr, which in February began a highlighted posts feature that lets users pay $1 to make their posts more noticeable in readers' dashboards. While this is an interesting approach for a startup that has previously never monetized, it seems odd that Facebook would try a similar test at this stage in the company's development. The experiment reminds us of when in 2009 the company tested a way for users to give give each other Credits for content they shared in the feed — an idea that Facebook quickly scrapped without ever rolling out widely.

If highlighted posts did expand to more users, we can imagine people who have chosen to enable subscribers being interested in the feature. Though in its current state, users do not seem to get any data about the results of highlighting their posts, so it might be hard to determine its value. For example, a $2 cost to show a single post to a user's 130 friends — the average according to Facebook's statistics page in February — is a CPM of more than $15. Most users might not frame the cost in this way, and there may in fact be cases when a user would be willing to pay $2 to make sure that friends see a post. Perhaps a birth announcement, a post about looking for a roommate or a link for fundraising might qualify. Small business owners might also start to use the feature to promote their business this way rather than using pages and traditional ads, which are not guaranteed to show in News Feed.

Hypothetically, if Facebook could get every user in the U.S., Canada and Europe — where the company currently generates the bulk of its revenue — to highlight one post a year for the $2 price, it could bring in about $858 million in additional revenue. This is well above the $484 million it made from its payments business in the same region last year, according to a filing with the Securities and Exchange Commission.

Still, giving users the option to pay to ensure that friends see their posts might lead some users to question what happens to their posts they don’t highlight. It does not reflect well on Facebook’ algorithms if users have to pay to get their most important posts seen. It also seems out of character for the company to make this sort of blatant revenue grab after much of the company's pre-IPO talk involved managing investors' expectations for how the social network approaches monetization. For example, in Facebook's IPO filing it says, "Our culture emphasizes rapid innovation and prioritizes user engagement over short-term financial results." And CEO Mark Zuckerberg wrote in a personal letter to prospective investors, "These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits."

Facebook re-introduced Sponsored Stories to News Feed in January, but these are content that brands and other advertisers pay to promote, not individual users. Last month a company spokesperson told us it would begin testing an option for page owners to more easily pay to promote their content to fans, but it did not suggest that users would be able to do the same for their own posts until a New Zealand blog reported the feature.

Below are images from Neowin.net whose writer, Owen Williams, has tested highlighted posts. If you have access to the feature, please share your experience with us in the comments.

 

 

lørdag den 12. maj 2012 at 07.49