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Facebook Goes Public – Nine Things You Should Know About Facebook’s IPO

Facebook could be worth nearly $140 billion by today’s market close

The social network priced its shares at $38 apiece, valuing the company at $104 billion. The average first-day “pop” for a technology company is 32 percent; if Facebook follows that trend, it’ll be worth $137 billion by day’s end. But there’s little about Facebook that’s average, including its public offering. This is the technology’s biggest initial public offering and history’s second-biggest IPO, period, and it will raise about $16 billion. Statistics suggests that the first-day pop—if there is one—will be more modest than average.

A lot of the smart money is getting out

Early investors such as the venture capital firm Accel Partners are selling an unusually high number of shares.Nearly 60 percent of the stock sold today comes from insiders, compared to 37 percent for Google (GOOG) when it went public in 2004. Goldman Sachs (GS) is selling about half its stake, far more than the firm initially planned. “If you really thought that 12 months later the stock would be 50 percent higher, you wouldn’t leave that on the table,” Erik Gordon, a professor at the Ross School of Business at the University of Michigan, told Bloomberg News.

To justify its valuation, Facebook will need to annoy its users …

Thanks in large part to General Motors’s (GM)decision to de-friend Facebook, there are a lot of questions about the efficacy and future of Facebook’s ad-dominant revenue model. And it has high expectations to live up to: The $38 price gives Facebook a whopping 107 price-to-earnings ratio. (For comparison, Apple’s (AAPL) is around 13.) To dramatically boost ad revenues, the two best options are either to put more ads on the site—which would annoy users—or find more places to put ads. The latter means creating a network of ad inventory across the Web, much the way Google’s Doubleclick sells ads and places them on sites like that of the New York Times (NYT). This would give Facebook far greater reach, but could also give users the creeps. Imagine updating your Facebook status (“Really loving that new Carly Rae Jepsen song!”) and then seeing ads to buy the track Call Me Maybe at every site you visit.

… or do something besides advertising

Currently Facebook’s only source of non-ad revenue is its digital currency, Facebook Credits, which people use to buy virtual goods, such as tractors in FarmVille (ZNGA). During the first quarter of 2012, payments grew to make up almost 18 percent of Facebook’s revenue—close to $200 million in total. Overall, though, fewer than 2 percent of Facebook’s users have bought virtual goods with their payments option. There’s a lot of potential growth, in other words, along with hints that a big online operator such as Spotify may begin accepting Facebook Credits in the future.

Facebook has plenty of revenue options beyond payments and advertising

Facebook is a force: It accounts for 9 percent of all online visits in the U.S., according to Experian Hitwise, a company that measures website traffic. Hitwise also says that Americans spend an average of 20 minutes per Facebook visit. Worldwide, nearly 1 billion people have a Facebook profile. As investor Chris Dixon puts it, Facebook has real assets—including “a vast number of extremely engaged users, its social graph, Facebook Connect”—and should be able “to monetize through another business model,” apart from advertising. It could create the Social Smartphone, sell data analytics products, charge for higher-res photo and video storage, or perhaps hawk vintage Mark Zuckerberg hoodies.

There’s already a “Facebook Mafia”

Heard of the PayPal Mafia? Former executives from the online-payment provider have gone on to start big-time tech firms, such as LinkedIn (LNKD), Yammer, and Yelp (YELP). (And one member, Peter Thiel, cut the first big check for Facebook.) A Facebook Mafia has already emerged, and members have founded Asana, Path, andQuora. The Facebook Mafia is real, even though the name could use some work, says Dave Morin, Path’s chief executive officer, who previously developed Facebook’s development platform. “I guess we can’t escape from calling it that,” he says.

Facebook goes where Google won’t in photos

Facebook owns one of the largest photo repositories in the world, and its facial-recognition technology is getting a workout scanning them all, with more than 300 million photos uploaded per day. Facebook stores 60 billion images, a whopping 1.5 petabytes of data. For each uploaded photo, Facebook stores four images of different sizes. The site shows as many as 550,000 images per second. This is an area that has upset privacy critics and represents something that Facebook is willing to do that even Google isn’t: Google’s Eric Schmidt said last yearthat the company had built an app that would let people snap photos of others and identify who they are but decided not to release it, due to privacy concerns. Google and Facebook both have sophisticated facial-recognition technology, but Google requires users to opt into its photo-tagging service. Facebook users are included automatically.

Facebook’s new campus could be cursed

Late last year the social network moved into a 57-acre site in Menlo Park that was previously inhabited by Sun Microsystems. Sun’s fortunes soured shortly after the computer company took up residence there. The same thing has happened, in different times and places, to software-maker Borland, Silicon Graphics, and even Apple (which nearly went bankrupt three years after it moved into its current Cupertino, Calif., headquarters at 1 Infinite Loop). The good news: Companies that move into pre-existing campuses seem to fare better. Google, for instance, took up residence in SGI’s old digs.

Up north, Facebook is the only thing better than hockey

Facebook is one of the top two websites in every country except China. The social-networking site is most loved in Canada, where it wins 12 percent of all online visits.

Source: Businessweek.com

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How Brands are using Instagram to Connect with Consumers

A picture is worth a thousand words, which may explain why Instagram has become the latest social network to catch the attention of brands. With over 1 million registered users, this photo sharing app provides a unique touch point for brands to engage their consumers while telling their story through pictures.

For those who are unfamiliar, Instagram is an easy to use iPhone application for taking, editing and sharing photos. As a user you have the ability to follow, comment and like other pictures. All these interactions make Instagram an ideal outlet for brands who are looking to explore new ways to reach their consumers. Already, nearly a dozen brands have created their own accounts, including MTV, Pepsi and even Playboy.

Instagram has been only too happy to accommodate this new interest from brands, and they have hinted that they’re currently working on changes which will allow brands to communicate more directly with users. One such change, which was rolled out last month is the launch of hash tags.

Hash tags can now be added to pictures via the caption or comment field. These tags help to aggregate pictures into their own special albums. This allows users to view a real time feed of content, based around a particular topic (similar to how hash tags work within Twitter). To view pictures associated with a hash tag tap on the tag text or use the new search functionality located under the profile tab. For those without a smart phone, pictures can be viewed via RSS feeds: http://instagr.am/tags/%5Bhashtag%5D/feed/recent.rss. Simply replace “hashtag” with the name of the tag.

Brands have been quick to take advantage of this new development. Brisk Ice Tea is using the hash tag #briskpics to collect photos, the best of which they will use to create 4000 limited edition cans. Charity: Water are asking people to use the tag #chatirywater to share images of water in their everyday life, while NPR is collecting user generated content using the tags #love and #hate to spark conversation.

So how can your brand use Instagram to reach consumers? Here are a few ideas to get you going:

1. Host a contest. Provide followers with a challenge to take a picture of something related to your brand. Alternatively you could provide the picture and ask viewers to come up with a unique caption. Best picture/caption wins.

2. Give a sneak peak. Whether it’s the first look at a new product or a few snaps behind the scenes, treat your followers to some exclusive content.

3. Create a real time album for an event. Allow attendees to share their event experiences by using a hash tag to aggregate pictures. This will provide you with a variety of content.

4. Connect with influencers. Check to see if your brand is already being talked about. Not only could this give you a hint as to the kinds of content consumers would like to see, but hash tags provide an easy way to track the people who are already connecting with your brand.

5. Show off a different side. Curate images that represent your brand personality. Connect with consumers by creating content around your shared passions rather than just your products.

Are you using Instagram for your brand? Have any other tips or best practices? Tell us below!

Original Source: Antleragency.com by Beth Tucker

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Gucci’s Digital Flagship: Crafting an Intensively Attentive Online Environment

On the eve of Gucci’s 90th anniversary as a luxury retailer, the firm’s CEO, Patrizio di Marco, describes why digital innovation is more than just a matter of relevance and modernity.

2681_patriziodimarco_mediumBesides being one of the most active luxury brands in the social media space – with nearly 3.2 million Facebook fans and a host of online initiatives including the live streaming of its catwalk shows and smart phone applications – Gucci is also the first luxury brand to launch a digital flagship.

“Gucci was in fact a pioneer when it launched its US e-commerce site in 2002 and we [still] believe that new media and new technologies represent a valuable complementary communication and business channel.”

“ The digital flagship is destined to become our highest volume store in the world ”

According to Di Marco, Gucci’s new online retail destination takes advantage of the most innovative technologies available today, integrating rich content, shopping and social networking to provide the site’s monthly 2.5 million unique visitors with an aesthetic and customer-oriented experience that replicates the one customers have when immersed in one of the brand’s signature flagships stores in Rome, New York, London or Shanghai.

From a strategic perspective, Gucci’s recent aggressive foray into digital media channels is a concerted effort to drive the digital flagship to outperform all brick-and-mortar store sales.

“The digital flagship is destined to become our highest volume store in the world, and should be the final destination for any search on the net: whether you are seeking out Gucci through a search engine, or are one of our 3.2 million Facebook fans, or are one of the over 840,000 people who have downloaded our Gucci App or are one of our 32,000 Twitter followers.”

While traditional luxury marketing focused on the protected environment of exclusive networks and publications, Gucci has been at the forefront of the movement which challenges the status quo by utilizing the web to expose the brand. In September of 2010, for instance, the brand invited its fans to virtually join the womenswear fashion show and even showcased the commentary and digital content of fans on a global site alongside the show’s live stream.

“One of the reasons Gucci has been successful in reaching new customers is because of the attention we have paid to the internet… The current site operates in 17 countries in 8 different languages, while e-commerce is offered in 12 countries with over 2000 skus available online.”

The brand has also integrated social media into the heart of the online shopping experience. A live Twitter feed, an interface with the Gucci official Facebook fan page and product page link to ready-to-wear items straight off the catwalk, allows visitors to truly engage with the brand.

Di Marco, together with Frida Giannini, Gucci’s creative director, have championed social networks as an integral part of the new site, suggesting they are a natural extension of the fashion shopping experience in the real world which is often shared and enjoyed with friends as well.

With such an active role in digital media, Gucci is not only using these channels as a very direct and content-rich form of outreach to tap into a broader audience but also to uncover metrics and insight on the site’s visitors in order to become a more attentive luxury brand – something which is difficult to do with customers entering brick-and-mortar stores.

“[Digital] is allowing us to develop more personal and constant relationships with current and prospective consumers. We are also able to understand the desires and attitudes of our customers more quickly and easily through the information that is available to us, which is helping us to be more responsive. Ultimately, our aim is to offer the same values and experience to an online customer or visitor as we do in our stores.”

Source: Luxurysociety.com

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