Over the years we’ve compiled a large database of contacts who did not respond to our attempts to engage them regarding our services. Last month we decided to try and connect with these, “not viables”, through the social media site, Facebook. We weren’t expecting much. However, much to our surprise, 98.2% of those business contacts, those who already had Facebook pages, people who wouldn’t return an e-mail or a voicemail, accepted our invitation to be “friends”; thereby allowing us access to intimate details about their lives, families, and friends.
To be clear; we didn’t, and still don’t, try to hide the fact that we’re marketers; it’s right there on our Facebook page under the “Info” tab. We were, and still are, stunned by the positive response to our invitations. Why would they do that? Why invite us into their private worlds when they wouldn’t, otherwise, give us the time of day?
Maybe people just automatically respond to a “friend” request. There’s a likelihood that the branding process we initiated with our repeated attempts to contact them achieved enough of a familiarity where that person felt they probably knew us. I suspect that there’s no easy answer. However, Facebook has succeeded in creating a positive experience which, in turn, breeds trust. Another key driver may be the need, particularly when times are tough, to feel good about ourselves. Membership in a community and the accumulation of lots of friends, who without fail will post positive comments about our pictures, and musings, is a way to do that.
Speaking of which; we’ve yet to see a negative comment from, or directed to, any of the hundreds of people who are now in our circle of “friends”. This attests to the power of “Social Proof” which means we determine what is correct by what other people think is correct. The downside is that, as Walter Lippman put it, “Where all are thinking alike, no one is thinking very much.”
Facebook has been able to create the illusion that it and all participants within it are well-meaning. Fortunately for the people who accepted us as “friends” we are. We have no intention of marketing to them through Facebook, for to do so would violate their trust, and degrade an experience that brings them comfort and fun. We’ll continue to try and interact with them the way we always have, through e-mail and phone calls.
But not everybody is trying to make the world a better place through Facebook, although we applaud those who are. There are predators in their midst, and we’ve read the most breathtakingly intimate posts by people who should know better. What could that information be used for by unscrupulous individuals? You can think that through as well as we can.
What if Facebook, still unprofitable after five years, does own the rights to all of the data it has stored? Our guess is that it would prevail in court. The reason that social media sites are such a hot business opportunities is that the members do all of the really valuable work. They constantly create new content, and while doing so, teach marketers how to sell to them. The fact of the matter is this; Facebook is a business. Right now, investors are paying for the server farms, the talent, the office space, and everything else that goes into running a business, and they expect to see a return on their investment.
Let’s look at this more closely.
The last we heard Facebook has about a 175,000,000 members. Most have posted information regarding their preferences, likes, dislikes, and more on their wall, and on the walls of others, along with time stamps. In addition, Facebook people have posted countless pictures which can be analyzed for characteristics that can be included in the biographical/psycho-graphical profile along with everything else. Or those images could be licensed out to third parties for a fee payable to Facebook.
The potential power to market supremely targeted offers is stunning. Facebook could send “Sponsored by…” e-mail on behalf of third party vendors so targeted; conversion rates would go through the roof. They could append offers to each e-mail sent. They could sell the data to medical, pharmaceutical, or insurance communities at $50 a lead like Real Age does. Real Age guides a guest through a series of health related questions, and purports to give that person their real age or biological age based on the guest’s answers. Instantaneously the information gathered is sent real time to a prearranged buyer in the medical research field.
As you can see from the small sampling we just presented; the possibilities for monetization of the data are endless. And Facebook has that power if it owns, or at some later date, takes ownership of all of the data it’s accumulated over the years. The fact is that Facebook could be selling these profiles as leads right now, and no one would know. We’re not saying they are but it could be done.
Okay, lets look a scenario just for the sake of discussion. We do not claim this to be an accurate representation. As stated Facebook has at least 175,000,000 “friends” each with an e-mail address. At minimum, there are 175,000,000 e-mail addresses. If only 5% of the 175,000,000 e-mail sent generates conversions, at an average order value of, let’s keep it low, $25, that mailing would generate, 8,750,000 conversions worth, $218,750,000. With just one mailing, not factoring in the improvements the targeting will generate, and the fact that the open rates should be phenomenal because fewer messages are sent back and forth to in boxes within the site. In other words Facebook inboxes are not stuffed everyday with e-mail.
Now consider that each of those people uploaded all of their contacts, we did, and the numbers grow exponentially. What if, on average, each member uploaded one hundred contacts, with e-mail addresses, and more? It surpasses the national debt…about 17,500,000,000 prospects to market to at their e-mail addresses.
Again these marketing scenarios are pure speculation on our part. We don’t know Zuckerberg, and have no idea what his intentions are, but Wow! What a goldmine. Our experience leads us to guess that he’s under tremendous pressure, on a number of fronts, to do something with that data.
To us, the question isn’t, will it happen; it’s going to happen but when and how? The data is too valuable. In closing we ask you, how do you think Facebook can make money? But don’t tell us they can run ads at the top of pages, and on the right hand side. Those placements historically have the lowest click-through rates, and, thereby, the lowest prices. If not the UGC, then what can they do to satisfy investors?