The human in Social Media is often overlooked.
You Are the Ad
Facebook has emerged from a privacy scandal to become online advertising’s next great hope. Its goal: turning us all into marketers.
Three years ago 1-800-Flowers, long a pioneer in Internet marketing, became the first national florist to create a fan page on Facebook. It used the free page to build relationships with customers and sell selected products, but it spent very little money advertising on the site. In January, however, the company began buying a different kind of Facebook advertisement. “Sponsored stories,” as they’re called, let marketers pay to turn actions people take on Facebook into promotional content. When members click a thumbs-up button to signal that they “like” a product or brand, for example, a simple ad appears on their friends’ pages: “Julia Smith likes 1-800-Flowers.com.” Those friends can click a Like button on that ad, which then shows up on their friends’ pages, and so on.
Thanks in part to those ads, the company now has more than 125,000 Facebook fans, more than twice as many as it had at the start of the year. Now, says 1-800-Flowers president Chris McCann, “We look at Facebook as core to our marketing program.”
So do dozens of other major brands, including Ford, Procter & Gamble, Starbucks, and Coca-Cola. Suddenly, large companies are running multimillion-dollar ad campaigns on Facebook. Startups, such as the social-game maker Zynga and the daily-deal service Groupon, are mounting similar though smaller campaigns, and so are hundreds of thousands of local businesses, such as fitness salons and photographers. Facebook ads hauled in nearly $2 billion in revenues last year, according to the business information service eMarketer, and a leaked document belonging to investor Goldman Sachs revealed that the privately held company made a profit of about $500 million in the same period. This year, revenues are on track to reach $4 billion—making the $75 billion valuation investors are placing on Facebook seem slightly less crazy.