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Facebook Business Case - What Is online Social Network?

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Chapter 13: Facebook

What is Online Social Network?

  • A place where people who share interests, activities, backgrounds, or real-life connections can interact with one another
  • The internet removes the geographic and time limitations of offline social networks
  • Bilateral Relationship: If you wanna communicate with one another, you need to get approval of other (Interaction between Users) (like Whatsapp)
  • Unilateral: Follower (e.g. Twitter, Instagram for spreading message)
  • Profiles, Friends Connection (can be bother bilateral or unilateral), Network Discovery, Favourites(Liking sth), Instant messaging, Discussion Groups, Games, widgets, apps, Storages (for storing fotos)

Facebook History:

  • Mark Zuckerberg
  • Alexa rank No.3 (1st Google, 2nd Youtube, 3rd Facebook)

Things You Do on Facebook

  • Social Games
  • Post (things you want to share): Text, Photo, Video
  • Get accessed to info (Stalking) 🡪 “Facebook Depression”
  • Events organization/Joining
  • Shopping/Selling

Value Proposition:

  • Reinforces and expands the real-world social connection of users
  • Creates an enormous opportunity for businesses to stay more connected to people and generate powerful word of mouth
  • Companies/Business as Facebook’s customer
  • Facebook platform enables third-party developers to build applications on top of Facebook to attract users

🡪 Many potential user on Facebook and Many user Data

Revenue Composition:

  • 95% Advertising, 5% Payments & Other Fees

Facebook Advertising – Display Ads: (on RHS of Facebook)[pic 1]

  • Pay-per-click or Pay-per-Impression (as long as it posts the ad, have to pay to facebook)
  • Based on Max Bidding Price, e.g. $300 instead of price per click

How do Facebook Ads target users?

  • Search Query/Keyword
  • Activities: Search/click/view/like/post/share
  • Demographics: Age,  gendor, interests, locations
  • Connection: friends/ network 🡪 target your friends, or based on your friend target you

** All the 3 above are the way to collect information and targeting

Facebook Advertising –Company Pages

  • Allows businesses, brands, products and public figures to create free Facebook pages and attract Facebook users to “like” them

Facebook’s News Feed Algorithm

  • Only a tiny proportion (5%-10%) of the content published by Pages that you “Like” actually reaches your News Feed (For company, only 5-10% of the content is shown)
  • Facebook uses a machine learning algorithm that takes more than 100,000 factors into accounts to determine which articles should be displayed in a user’s news feed
  • Determine what kind of post to show to you
  • A.k.a Edge Rank

[pic 2]

[pic 3]

  • Recency=Is it a new post? More recent 🡪 Higher ranking
  • Edge Ranking: Only top rank contents will be shown to user 🡪 force user to pay

Facebook Advertising – Promoted Posts

  • Allows the advertisers’ posts to be seen by more of their fans and even friends of those fans (fans=followers of the brand)

Facebook Ads or Promoted Posts:

Facebook Ads:

Promoted Posts:

Based on demographics

Doing advertisement based on follower’s action

Target larger group, reach more audience

Best thing can do is reaching your follower, maybe friends of the follower

Good if you want to raise brand awareness

If you want to send some promotion or offer of your company

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