Excited by the Facebook-Marin integration and Chris Copeland’s “Life After Google” speech at SIS Captiva, we scoured the Web for money quotes on Facebook’s monetization strategy.
We learned Facebook wants to position as a demand-generation channel, against Google, in the 90% of the funnel above the point of purchase. Expect Facebook to join Microsoft’s Atlas in speaking out against the last-click attribution model and bringing innovative multi-attribution solutions to the table in the coming months.
Here’s how ex-Googler Sandberg laid it out for Vogue:
“Google makes money because it commands 50 percent of online advertising dollars spent on that final stage, the one that gets people to make a purchase. But that stage represents only 10 percent of all ‘ad spend’— here she writes “$690 billion,” then draws an arrow to her ‘online ad spend’ column. Facebook can dominate the other 90 percent devoted to ‘demand generation’ ($621 billion a year!). It’s not unreasonable, she thinks, that Facebook could wind up getting a substantial part of that, every year.”
Mashable’s article on Vogue’s profile is here:
Tags: Atlas, Chris Copeland, demand generation, Facebook, last-click attribution, Life After Google, Marin, Mashable, microsoft, monetization, shawn cheng, Sheryl Sandberg, Vogue
April 28th, 2010 at 1:19 pm
In your other article for 4/27, you say “Speak the language.” Well, I have no clue what this sentence means: “We learned Facebook wants to position as a demand-generation channel, against Google, in the 90% of the funnel above the point of purchase.”
Please explain in terms this non-SEM expert can understand.
April 28th, 2010 at 7:13 pm
Happy to, Ace — thanks for asking. Marketers use “the funnel” to visualize the audience for advertising messages. The idea is that the population of any ad’s audience falls along a continuum of likelihood to purchase. The biggest share is only aware of the ad message. A smaller share is considering a purchase. An even smaller share is engaged with the brand in some way. The smallest share is ready to act. It’s particularly easy for search marketers to picture this distribution pattern as a funnel, because of our experiences with data visualization and drinking keg beer from big plastic funnels.
Mass-market ads designed to stoke demand for famous brands are said to be aimed at the top of the funnel. The more targeted an ad, the lower in the funnel its intended audience. Search ads, targeted exclusively at customers taking action, are about as low in the funnel as a marketer can get. That’s why they’re so efficient, and why organizations that enforce search budgets insufficient to meet search demand are said — to utilize a marketing term engineered by Google’s Avinash Koushik — “to suck.”
Facebook seems to be positioning against “the Googs” by insinuating that low-funnel prowess is actually a weakness in that it does not generate demand. It’s quite a shot across the bow, given the need of big brand advertisers with young targets to replace traditional mass-market advertising with something less asinine than YouTube.
A company called Avenue A used to claim that eventually all advertising will be digital. That’s about $250 billion at last count up for grabs ($368B total, roughly $110B already online), most of it top-of-funnel. Facebook’s going for it! Of course this only adds to the mystery of wildly irrelevant Facebook ads — or did someone “share” about my belly fat?!