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The Value of a Friend, Follow or Connection?

Social media usage, activity and revenue are on the rise. No matter what the stat, fact, figure out there, Facebook dominates the social media (SM) space.

As you know Facebook finally filed for an IPO http://abcnews.go.com/Technology/facebook-ipo-billion-filing-sec-sell-stock/story?id=15483472#.TywhOJis-5A this past week. To no surprise it’s predicted to be one of the biggest tech IPOs of all time. Pundits are saying it’ll be about a whopping $100 Million USD. This 800 pound gorilla in the social media (SM) sphere claims 800 million active users that have made over 100 billion connections with people in the network. The average FB user has 245 friends and growing. Half of all users go online daily.

Facebook had profits of $1 billion on sales of $3.7 billion last year. Its money is mainly made from ad revuenue. CNBC referenced web measurement leader ComScore in a recent article http://www.cnbc.com/id/45063391/Facebook_Dominates_Display_Ads_N.ew_ComScore_Report. As ComScore simply dubbed it, “Facebook’s winning in the battle for display advertising dollars.”

According to the company’s findings:

Facebook accounts for 15% of total (ad dollars) spent online (Google and Microsoft are at 10% each)

It is responsible for 28% of all display ads seen online in the US  (that’s up 5% from last year)

ComScore reveals online advertisers on Facebook:

  • Telecom giant AT&T spent 25% of all its ad impressions on Facebook last year (10 billion impressions)
  • Experian Interactive, which markets financial products like Freecreditreport.com and Lowermybills.com with 18.5% percent of display ad impressions
  • IAC had 33% of impressions
  • Walt Disney Company had 28%
  • Google came in at 19%

Of course the appeal of Facebook ads is sheer reach. In a traditional digital display environment, only the big spenders can get a share of voice (SOV). Well on Facebook, the ace-in-the-hole is that more than 61% of Facebook ads come from advertisers outside the top 1,000 (ComScore 2011).

Of course, lest we forget the long awaited big tech IPO of the professional networking site LinkedIn http://www.linkedin.com last year? According to an EWeek article http://www.eweek.com/c/a/Cloud-Computing/Facebook-IPO-to-Dwarf-Recent-Groupon-Zynga-LinkedIn-Stock-Market-Debuts-365667/ LinkedIn went public at $83 May 19, 2011, and shocked the high-tech world by soaring to $122.70 before closing at $93.86 (today its at $72.)

The company is still hot. It boasts that every second two people are creating their professional networking profile on its site. There are 135 million members. The company said its revenue is $139 million USD.

LinkedIn makes its money selling Premium Subscriptions ($28.4 million), Hiring Solutions products ($71 million) and Marketing Solutions products ($40.1 million) <Source: http://techcrunch.com/2011/11/03/linkedin-beats-the-street-q3-revenue-up-126-percent-to-140m/>.

The company continues to offer new products and features. One is called Classmates that allows users to connect with fellow alumni. It also redesigned its mobile offerings.

What will be the next big tech IPO? Many say microblogging platform Twitter. In fact, Twitter was rumored to IPO in 2011. Reuters http://www.reuters.com valued the company at $7.7 billion USD.

The company has successfully garnered 500 million active users globally. There are over 200 million Tweets sent out daily.

Twitter has been scrutinized by being too slow to roll out its ad platform. However, last year it ramped up Promoted Tweets, Promoted Trends and Promoted Accounts. There is also a way advertisers can push Tweets regardless if the user is a follower or not. It is also working on a revshare deal with third-party developers serving Promoted Tweets in their Twitter apps. It’s no doubt that we will see an increase in US revenue from political advertisers.

The company launched a photo sharing service last August. In less than six months it became the largest surpassing social media veteran company Flickr http://www.flickr.com founded back in 2003 and sold to Yahoo for about $40 million USD in 2005.

All Things D asked real-time search engine Topsy to pull numbers about photo sharing on Twitter from the past year. Twitter users shared 58.4 million photos in December, and the number of photos shared grew 421% over the course of the year. <Source: http://www.mediabistro.com/alltwitter/twitter-users-shared-58-4-photos-in-december-stats_b17536>.

As an online marketer I am impressed and admittedly a bit blurred by the sheer numbers. On one hand it is my dream come true: to see such engagement and loyalty. On the other it’s a bit of careful-what-you-wish for.

So if you don’t know them already look at social media monitoring companies like Radian6 http://www.radian6.com owned by Salesforce http://www.salesforce. The company is one of several that monitors whats being said and done on the social web.

In the meantime, I’ll be trending and tracking as I steep in the social web. I’ll leave you with a question, how do you value a friend, follow or connection?

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