Does Facebook Make Businesses Any Money? | Hacker News Reader

Does Facebook Make Businesses Any Money?

readwriteweb.com

35 pointsacconrad15 comments

"Of the 24 companies interviewed, only 7% cited social networking as one of their most effective sources of customers."

That's 1.68 companies. Oops.

Looking at the diagram it says 7% out of 102 online retailers. Which, slightly rounded of, is 7 online retailers.

It is obvious that Facebook makes some businesses lots of money (see: Zynga). It would be more interesting to know who is making money, and what their business models look like.

Ex-intern on the Facebook ads team here.

Facebook's role in the marketing funnel is not to get from interested customers to buy from the company. Its role is at the level of TV advertisements and display ads: Build awareness.

RWW is going about it the wrong way. I don't think Facebook is trying to be the #1 in terms of direct sales driver (for the 7%, they're probably like Zynga or on-Facebook apps). Facebook is unlikely to become more effective than search in that regard, but that's because the latter is intentions-driven.

How can they tell whether the awareness being built contributed to sales? Surely they can run randomized (controlled) tests and see if it makes a difference (I think Neilson does research in this field). But it appears from the article that RWW (nor the companies it interviewed) did not do that level of research.

If you want to use Facebook to get from unaware visitor to paid customer, it's going to be harder than using AdWords.

The report leaves hope for certain types of businesses, who it says may be in a better position to make money from their Facebook presence. Among them are what they call "small pure plays", small businesses for whom "Facebook is the 2011 version of Yahoo Merchant Solutions or eBay ProStores."

Can Facebook process payments for third-parties?

It sure can, with Facebook Credits. Today, the margin is a little high for physical goods, but it works well for virtual goods.

That is processing payments for Facebook, not third-parties.

'Do the Yellow Pages Make Businesses Any Money?'

'Do TV commercials Make Businesses Any Money?'

'Do Postcard Mailings Make Businesses Any Money?'

If you can afford TV you can afford to be rich. TV is the top of they pyramid for advertisers

$20?

http://www.google.com/adwords/tvads/

What is interesting is that a social media presence influences your page rank, so all those sites citing SEM might be looking at a partial side effect of something that they don't consider important (not Facebook, but twitter, GetSatisfaction, etc).

I know affiliates who have made up to six figures a day on Facebook in some months but they are not going to write about it because they don't want competition.

Is this still true? How long ago was this?

I have heard Facebook turned their backs on affiliate marketers once the big corporate branding campaigns became ubiquitous.

I have had several ads rejected for attempting to sell Clickbank products (I know, I know - just testing the platform). I had an ad approved, made a sale, and the next day, the ad was disapproved.

It seems they only care about big corporate dollars or local mom-and-pop stuff. No place for affiliate marketers.

social media = branding search = customer acquisition

Our company cannot get their ads to work - the quality is horrendous vs. AdWords/MSN.

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