Facebook Business Case - What Is online Social Network?

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: