Marketing & Monetization of Facebook: Prologue

The Facebook Developer Garage event: Face Two, co-organized by Garag3 (Entrepreneur 27) and Singapore PHP User Group will be happening on 5 March 2008 in Microsoft Singapore (21st Floor). The event is happening, thanks to NUS Enterprise (cash sponsor) and Microsoft Singapore (event sponsor). I am invited to moderate a panel discussion on the following topic: Marketing & Monetization of Facebook - Hype or Gold Mine? Here are some of my initial thoughts to set off as a prologue to the event, and offer some questions for both the audience and my fellow panelists to think about in the upcoming panel.

On my own, I have invested in a company which produced a facebook application for different purposes (under an online social network known as iHipo that was featured on the Next Web recently) through Thymos Capital and have worked with the APIs on my own to understand what it can and cannot do.  If you follow the news, the global race for online social networks are on the rise. Currently, MySpace is estimated to have the highest number of users (109M) where Facebook is closing in at 101M with a year on year growth of 305% in 2007-2008. But the question remains, with the number of users and facebook applications increasing, how would any company or internet entrepreneur can exploit it for marketing and monetization purposes. 

Here are a few thoughts that has been passing through my mind that are related to the panel (but I want the audience to keep it on the back of their mind):

• Facebook Fatigue in US: The number of Facebook users are leveling off in the US while growing worldwide. Is the fatigue due to increasing facebook apps, groups and spam?
• Are we fully maximizing the social graph and network effect in Facebook?: At the moment, the search for users in Facebook is not efficient and give false positives. There are suggestions to improve the search engine by making use of localized information and also mathematical models based on the small world hypothesis or six degrees of seperation? Are there new opportunities presented with these possible enhancements?
• The power of peer pressure: Facebook has been a successful marketing tool. The best example is the US Presidential Elections 2008, where the Obama campaign has fully exploited Facebook for gathering voters and grassroots support (in terms of donations). It is touted to be the reason why the youth vote has finally manifested in the election.
• Legal issues about Privacy and Facebook Apps: There are legal issues associated with Facebook. The first is the issue of privacy of an individual. With the platform open for third party developers, how much information are released on the individual to the application makers? That's not the only issue. Recently, Scrabulous, one of the most successful apps faced legal action from Mattel and Hasbro for infringing intellectual property of the game Scrabble. Of course, the lawsuit has generated a strong backlash from the users creating facebook groups to save the game from being taken down.

For the panel, I have decided on the following questions for a quick warm up among the panel made up of :

• Marketing Question: Any useful tricks to share about how to spread the word quickly thru the social graph? What is the fastest to spread an event or application quickly across different users and getting people to sign up for a application? Are facebook ads efficient for the client who launch the marketing campaign?
• Monetization Question: Are there any other monetization strategies than online advertising? So far, online social networks have not really produced any profits. How do we ensure sustainability for people thinking of doing business thru facebook?
• Reliable Metrics for Advertising: What are the reliable metrics for one to measure the success of a facebook marketing campaign? In Google Ads, there are well-defined ways of using impressions, clicks, referals for clients to evaluate the success of their ads.
• Dealing with Increasing Apps (and Spam): Given the increasing number of facebook apps, are the users hitting the point of marginal utility given the spam and endless number of invitations?

With Leonard Lin (Managing Partner, Tyler Projects), Kien Lee (Founder, SENATUS) and Andrew Wee (Internet Marketer), we hope to have an interesting and interactive session with those who are planning to attend the event.

Related Links:

1. Kevin Lim, Workshop Video: Facebook Strategies for the Classroom
   
2. Kevin Lim, Freshly Presented: “Facebook Strategies for the Classroom”
3. Andrew Wee, Monetization Options For Facebook Application Developers.

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Comments

[Nick Jag]

I've always had trouble with the Facebook user search. I'd be really glad if they improve it like you said. And as far as monetization goes, they're really going to have to dig deep with this one, although I think they have some time, unlike other networks that don't seem to have the retention of Facebook.

[Daryl Tay]

Bernard those are really great questions that I'd love to find out the answers to myself. I have no idea if I can make it for the event (just saw the details on Facebook), but I hope I can just to catch this panel discussion.

If I can't, hope you'll post an update!