Category Archives: bubbles

The 1-out-of-6,250 math of Facebook fan pages

Is this a sign of a bubble? Lately you can’t watch a TV spot without seeing a major brand bray “visit us at Facebook.com/Brandname.” This would be a bit funny if we hadn’t seen it before, a decade ago, when firms cried out their AOL keywords in every advertisement. We surfed over to an old discussion board about “What happened to AOL keyword ______?” and found these prescient comments:
Question: I remember about 10+ years ago, whenever a tv commercial or something had an add [sic], they would give a website or “aol keyword food” or something like that… however, you never hear this anymore… ist it even around still… just wondering, does anyone even remember this.. or heck, did anyone ever even use them, i didnt.

Answer: It is no longer fashionable to advertise AOL keywords, since the better companies have their own websites, and the members of the buying public are now savvy enough to visit REAL websites instead of AOL keywords (even though a number of them still aren’t smart enough to ditch AOL as their ISP).
Sound familiar? So let’s do some quick math on how well Facebook, the modern AOL portal, is performing. To see how one of the world’s largest banks fares on today’s largest social network, we visited Bank of America’s Facebook fan page.
1. Bank of America has 9,367 Likes.
2. Bank of America serves 1 out of 2 homes in the U.S., about 57 million households.
3. Do the math, um, carry the 2, and that is a 0.016% Like rate.
Of course, not everyone is on Facebook, but households typically hold more than one person, so we’ll call it a wash. We’ll also not discuss that Bank of America has 300,000 employees and operates in 40 countries, so the % response is actually much lower. Conclusion: 1 out of 6,250 U.S. Bank of America customers Like them.
It is curious that so many brands are rushing to stake a place inside the Facebook portal, when the potential Like payoff has so little value. Facebook users don’t really care to connect, in the majority, with companies; if they want to find your brand, they can do so via Google or by typing in your URL. And if they want to Like you, you can promote the option with a button on your own website. Truth is, much of the rush toward Facebook is a lemming-like leap off a cliff, hoping that the glowing Facebook aura will infuse your own brand with a halo. And maybe, just maybe, with all those FarmVille-chatty connections, your brand will go viral.
Yeah. We could calculate this another way: The typical U.S. consumer sees 166 TV commercials each day (5 hours and 9 minutes of average television viewing with 16-18 minutes of commercials per hour, most 30-seconds long). Does anyone want to have a relationship with 166 brands? Of course not. Marketers have always chased audiences, and as Facebook nears 700 million viewers, it certainly has a sweet customer goldmine. We don’t dismiss a Facebook fan page for brands that really can build communities of passionate support. But like sneakers, bras and Bank of America financial accounts, in media, one size does not fit all. Instead of building a microsite inside Facebook hoping the throngs there will find you, perhaps your energy is better invested in building a reason for an audience to come see where you already are.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

The Economist to Facebook: Blah blah blah


Some people just don’t understand Americans. Look, if we believe it, it must be so. Harper’s just noted that despite all the gloomy press about recession, 55% of us Yanks believe our homes are still rising in value. That’s right! It’s too bad those guys at Bear Stearns lost their shirts by hyper-leveraging derivative instruments created in brimstone by dark computers based on a home loan some guy in a shiny suit sold to people with FICO scores in the 300s who didn’t need to authorize their income and whom you wouldn’t let baby-sit your kid. Whatever. Our house is rising in value. Former Federal Reserve governor Laurence Meyer just told NPR that no one could see that crash coming. Of course not! Our house is rising in value.

Now, The Economist has a piece claiming that Facebook and MySpace are vastly overvalued because they can’t really monetize their user base, and goes so far as to compare AOL’s recent snap up of the Bebo social net to Microsoft buying Hotmail a decade ago. Sure, The Economist says, back in the day web-based email was lauded as an incredible communication innovation, but no one really made a buck by advertising on it.

And, to really throw cold water on us, The Economist suggests that all these social media will eventually morph into one big, ubiquitous feature of life. Just like that Charlene Li over at Forrester.

Come on, Economist. Does it matter if Beacon bombed, or if you can’t monetize widgets that toss sheep, or if social media users have changed modalities and block out advertising? Does it matter if people soon control their own online social network without 25 passwords? Those are details. We need a hot new thing. We need to believe. We need our home to rise in value. And besides, that Bebo has a really cool URL.

Google slippage, or how to predict a decline


So analysts bashed Google stock today after seeing that pay-per-click ad revenue is slipping. We’ve noted that Google Trends shows global searches for common phrases are sliding as well, with demand down about 50% in the past four years. Seems Google is also playing with its formulas to wring more money out of click budgets — a potential sign of desperation. Google may be in decline.

Which brings up a point: Why can’t anyone see changes like this coming? Take any infatuation — AOL, Google, MySpace, Facebook, widgets, real estate, the 17th century tulip craze — and people jump in as if the ride will last forever. But the reality is almost everything in life follows a bell curve path toward the future. By the time you hear something is hot, chances are that same something is about to peak.

Look at your own life. If you work in marketing but aren’t CMO or agency president yet, you’re probably in your 30s or 40s, have rising income, good job prospects … but chances are, eventually your earnings power and title and circle of colleagues will peak, and then diminish.

In marketing, clients and agencies are always hungry for an edge, so they tend to disregard the future downward slope and leap into every bubble. We recently had the opportunity to talk with BusinessWeek.com about widgets, and the reporter mentioned that everyone who produces these things proclaims them to be the future of marketing. Uh-huh.

Don’t get depressed. Just, when planning your future, remember that what goes up must come down.