Archive for the 'Facebook' Category



Gaming’s golden age, as seen by one of its veteran lawyers (interview)

Friday 21 November 2014 @ 7:15 am
Oculus Rift

Dan Offner spent a couple of decades as a game industry lawyer before he joined a little company in January 2013: Oculus VR. He helped clean up its books, get its legal house in order, and then joined its rocket ride.

Oculus VR’s virtual reality goggles became a sensation for their potential to create new kinds of gaming experiences, drawing the attention of the entire world. As general counsel, Offner helped the company negotiate huge venture capital rounds and then the biggest deal of all: the sale of Oculus last spring to Facebook for $2 billion.

Offner stayed through the close of the transaction, and then he left to start his own new law firm, Offner & Associates, to go back to both investing and offering legal advice for startups. I talked with Offner about the legal issues that game companies big and small face in the times ahead.

As we closed our talk, we talked about whether there was a bubble or not. That turned into an interesting conversation that went beyond legal matters and into the topics of investing and timing.

Here’s an edited transcript of our conversation.

Dan Offner

Above: Dan Offner

Image Credit: Dan Hontz

GamesBeat: You seem to have disappeared for a while. Maybe disappeared inside of Oculus, I guess?

Dan Offner: I took a break, yeah. I got swallowed by the Oculus momentum and just came out the other side at the end of the summer.

GamesBeat: Are you returning to your old firm or starting a new one?

Offner: I’m starting a new law firm, Offner & Associates. I’m also starting a small angel fund, Blue Heron Ventures. That was the entity through which I invested in the series A in Oculus.

GamesBeat: How many years were you there? A couple of years or so?

Offner: Not even? I joined Oculus in January 2013 as outside counsel. I became their general counsel shortly thereafter, when my partner George Rose, the former GC of Activision, went back to being GC at another company. I was Oculus GC from that time early in 2013 all the way up until the close of the acquisition. Then there was some time afterward as I was wrapping things up and handing them off to Facebook legal. I took a little time off to regroup and got things like letterhead and business cards sorted. Now I’m getting ready to kickstart, no pun intended, my own practice and my own angel investing firm.

GamesBeat: How many years of legal practice related to games is that for you now?

Offner: Technically, since 1992. That dates me. 22 years.

GamesBeat: Is most of that as outside counsel?

Offner: I started off working for a firm that represented the Teenage Mutant Ninja Turtles. I was doing a lot of Game Boy deals. Then I started my own firm in 1995. That was originally Offner & Associates as well. It became Offner & Anderson. In ’95 I started working with THQ. Then, in ’96, I started working with Ubisoft, and it went from there. I sold that firm to Nixon Peabody in 2006. In 2010, I went over to Loeb & Loeb to build up their interactive entertainment practice.

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For ‘Facebook at Work’ to work, it will need to prove it’s worthy of our trust

Monday 17 November 2014 @ 2:46 pm
For ‘Facebook at Work’ to work, it will need to prove it’s worthy of our trust

It’s not hard to see that Facebook’s (reported) “Facebook at Work” product could bring something unique and useful to the enterprise space. But regardless of what’s in the product, Facebook may not be able to offer trust.

The social network has so far limited itself to use in people’s personal lives and has stored away petabytes of photos of drunks and people making duck-faces. Of course, it’s also stored away lots of information on demographics, preferences, favorite discussion topics, group likes, etc.

Facebook has said that its business platform would be separate and distinct from the personal platform we all know. It’ll also offer a “groups” feature and messaging.

Many businesses — like health care, for example — could benefit from organizing data in a database structure that looks like the social graph. Businesses may also be attracted to the newsfeed algorithms that Facebook has developed to put the most relevant data in front of the user.

But unless Facebook intends to sell licenses for its enterprise product, you have to wonder what its motivations are for launching such a product.

Facebook’s whole business is organized around servicing its advertiser partners. How will these advertisers be served by a new Facebook enterprise collaboration tool? If we know Facebook, it will likely keep all that behind the curtain. Would it really try to serve ads via the platform to people while they’re working?

While Facebook gets points for data center mastery and for having never suffered any major breaches, it has also been perceived as a company that plays it fast and loose with user data. It has, in the past, taken the tactic of claiming certain data elements as “public” (that is, usable for ad targeting), then asking forgiveness later — but never really reversing its original move.

If it’s unclear who really owns the information we give to our personal Facebook pages, that question will become ten times as important when business-critical data is being thrown onto the network. Given Facebook’s history and its focus on advertisers, will businesses really feel comfortable entrusting their data to the social networking giant?

“The problem isn’t the actual mechanics of the program, which are simple,” says David Lavenda of the Microsoft productivity app company Harmon.ie. “It’s the context – people won’t want to interact with colleagues using FB.  Remember FB’s attempt to add email a few years ago — same idea.”

Facebook will need a very compelling “trust” story to gain a beachhead in the enterprise.

Perhaps more seriously, enterprises of any size want to buy a full stack of services on one platform. Microsoft offers a full menu of cloud-based services that include everything from messaging to cloud storage to email to voice service. Facebook won’t be able to offer a full stack coming out of the gate.

But Craig Walker, whose company makes the enterprise voice communication platform Switch, says Facebook might be able to build out a full suite of enterprise communication and collaboration services, in time. He points out that Google started as a purely consumer-facing service but built a full suite of products for businesses. Google now goes head to head with Microsoft to win enterprise accounts.

“It makes a ton of sense,” Walker says. “There’s a trend where products that were initially built for consumers are now coming to the enterprise.”

Walker says, however, the Facebook will have to work on building trust in the enterprise. “That will be the biggest challenge for them; I don’t know if enterprises will feel good about using it.” Walker explains that enterprise IT people are very concerned about where data is being stored and how long the data will be stored there.

He points out that the hot enterprise messaging platform de jour, Slack, hasn’t faced hard questions on trust. “Slack doesn’t necessarily have any trust built up with enterprises —  but it also doesn’t have any experience with violating trust. [Facebook] have a little more checkered history on that.”

The best thing Facebook could do about its trust issue is offer enterprises a product that does things the competition simply can’t do.

That’s exactly how Facebook has dealt with privacy issues on the consumer side. It’s simply made itself the only game in town. You either trust it or you pick up your toys and go home.


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Facebook is the world’s largest social network, with over 1.15 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 w... read more »











Gillmor Gang: Silent Noise

Saturday 15 November 2014 @ 10:12 am
Gillmor Gang Artcard The Gillmor Gang — Robert Scoble, Keith Teare, Kevin Marks, and Steve Gillmor. Recorded live Friday, November 14, 2014. Topics include: Pono, Bob Dylan’s Basement Tapes, Twitter Investor Day, @scobleizer’s Top Two Tips to Improve Facebook, Notification News, Amazon Echo. Time passes slowly up here in the mountains when you’re lost in a dream. Read More



Facebook will start to reduce promotional Page posts next year

Friday 14 November 2014 @ 2:10 pm
Facebook will start to reduce promotional Page posts next year
Image Credit: Facebook

Facebook is messing with its News Feed again, but this time for the better: It will start reducing “overly promotional Page posts” from your News Feed next year, the company says.

Facebook has been surveying its users for feedback, and says that users have consistently expressed they’d like to see less of certain kinds of posts:

  1. Posts that solely push people to buy a product or install an app
  2. Posts that push people to enter promotions and sweepstakes with no real context
  3. Posts that reuse the exact same content from ads
Example of "overly promotional page post"

Above: Example of an “overly promotional Page post”

Image Credit: Screen shot

What’s interesting here is that while Facebook has been closely monitoring the ads in people’s News Feed, it hasn’t been doing so with posts from brands and Pages that are promotional in content, until now, that is.

“Now we’re bringing new volume and content controls for promotional posts, so people see more of what they want from Pages,” Facebook says.

But despite the reduction in this type of unpaid content from pages and brands, this won’t mean fewer or more ads, or even any changes on that side of News Feed content, the company says. It seems that Facebook just wants to make sure that content from Pages is just as well designed, relevant, and “pleasant” (as much as brand content can be) to users as ads are (or are trying to be, at least).

Nevertheless, this is likely concerning to a lot of marketers. Facebook is essentially telling them that they have to be subtle and pleasing all the time. Being bold and asking for installs and other actions, or just plain “working the system” is not okay anymore.

So marketers and advertisers just might turn to ads in order to get that explicitly promotional content in front of eyeballs.


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Facebook rearchitects its data center networks, increases capacity 10x to make room for even more growth

Friday 14 November 2014 @ 11:00 am
Facebook rearchitects its data center networks, increases capacity 10x to make room for even more growth

Above: A Cisco top-of-rack switch in a Facebook data center in Prineville, Ore.

Image Credit: Jordan Novet/VentureBeat

Just outside Des Moines, Iowa, Facebook has developed a whole new way of moving data around its data centers.

The social networking company clearly wants to support an increasing number of users. To that end, it’s redesigned the orientation of the network for its newest functioning data center, in Altoona, Iowa, according to a Facebook blog post today. The new fabric architecture, which increases capacity by a factor of 10, is aimed at supporting traffic between servers.

“We are constantly optimizing internal application efficiency, but nonetheless the rate of our machine-to-machine traffic growth remains exponential, and the volume has been doubling at an interval of less than a year,” Facebook network engineer Alexey Andreyev wrote in the blog post.

Having racked up more than 1.3 billion monthly active users, Facebook has reached enormous scale, and the social-networking company a few years ago opted to optimize its operations by running its own data centers. Along the way, Facebook has gradually tuned up many aspects of the facilities. Now the company has made sweeping changes to the way in which bits flow through the network inside Facebook’s data centers.

Improvements have come to the way Facebook computes, stores, and moves data. Facebook has built hardware for each of these processes. Clearly, the do-it-yourself mindset continues at Facebook given today’s news.

Some of the infrastructure innovations at Facebook scale have trickled down to other companies in the past few years, as startups in data analytics, networking, and storage have created similar technology. Don’t be surprised to see networking companies start to emulate the new fabric.

A switch sits near the top of a rack inside a Facebook data center in Prineville, Ore.

Above: A switch sits near the top of a rack inside a Facebook data center in Prineville, Ore.

Image Credit: Jordan Novet/VentureBeat

Facebook originally set out to employ a cluster architecture for its networks, with each cluster spanning hundreds of cabinets full of servers, Andreyev wrote. But Facebook ran into problems with that configuration, namely that it required hefty, expensive, proprietary networking hardware to aggregate all the connections. And on top of that, Andreyev explained, “the need for so many ports in a box is orthogonal to the desire to provide the highest bandwidth infrastructure possible.” Plus, depending on just a few of these powerful boxes could be risky.

What’s more, the cluster architecture doesn’t always make sense if Facebook wants to distribute applications beyond a single cluster. And Facebook is rapidly updating its applications while also taking on more users, making the cluster model imperfect. Hence the redesign.

“For our next-generation data center network design we challenged ourselves to make the entire data center building one high-performance network, instead of a hierarchically oversubscribed system of clusters,” Andreyev wrote.

By the way, thinking about networks on a building scale, instead of addressing individual parts of a building, is classic Google, and now Facebook is once more taking cues from the search company in continuing to grow and provide web services for the world.

Here’s how Facebook went about putting the model into practice in Altoona.

The new Facebook networking fabric.

Above: The new Facebook networking fabric.

Image Credit: Facebook

Facebook disaggregated its network into pods, each of which consists of four “fabric switches” that are together responsible for as many as 48 top-of-rack switches.

“The smaller port density of the fabric switches makes their internal architecture very simple, modular, and robust, and there are several easy-to-find options available from multiple sources,” Andreyev wrote.

To wire together the pods across buildings, Facebook builds one level up and connects the fabric switches to heavy-duty spine switches. And there can be as many as 48 spine switches in a “spine plane.” Each individual data center can contain four spine planes.

As for connecting with the outer world, Facebook constructed “edge pods” that feature “edge switches.”

Altogether, the new style sounds like a major win for the company.

“This highly modular design allows us to quickly scale capacity in any dimension, within a simple and uniform framework. When we need more compute capacity, we add server pods,” Andreyev wrote. “When we need more intra-fabric network capacity, we add spine switches on all planes. When we need more extra-fabric connectivity, we add edge pods or scale uplinks on the existing edge switches.”

In step with the new fabric, Facebook has carved out sections in the middle of its new Altoona data center to store the spine and edge gear. And yet, Facebook saved time, even though it was working with a new site plan.

“In the end, the amount of time for site network turn-up in Altoona — from concrete floor to bits flowing through switches — was greatly reduced,” Andreyev wrote.

Read the full blog post for more detail on the new fabric.


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Facebook is the world’s largest social network, with over 1.15 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 w... read more »











The DeanBeat: What are the ingredients for the billion-dollar deals in gaming?

Friday 14 November 2014 @ 8:01 am
The DeanBeat: What are the ingredients for the billion-dollar deals in gaming?

Above: Big Fish Casino

Image Credit: Big Fish Games

Why are we seeing some big deals in gaming this year? Amazon outbid Google to buy game livestreaming firm Twitch for $970 million. Zhongji, a Chinese holding company bought mobile game maker FunPlus games for $960 million. Microsoft bought Minecraft maker Mojang for $2.5 billion. And this week, Churchill Downs bought casual game maker Big Fish Games for up to $885 million.

These are the big game industry acquisitions, but the underlying trends are just as strong. Internet Dealbook found that the value of deals — combining both the acquisition values and game investment values — in the third quarter was up 6,120 percent from the third quarter of 2013. That was bigger than the value growth in most other tech businesses by far. The number of game acquisition and investment deals was up 56 percent in the third quarter, and the average deal value was $240 million, up from $7 million a year earlier. These acquisitions are begetting other big investments, like Alibaba’s $120 million investment in Kabam or the recent VC investment of $35 million into mobile game publisher Scopely. The VCs have the cash to reinvest now.

Has the world gone mad for games? Are we in a Golden Age? Yes. Will it end? Eventually, but not for a while. Many ingredients that are fueling this fire. We’re going to be analyzing the ingredients of billion-dollar deals and what it takes to put them together — among other topics — at our first-ever GamesBeat Summit, which will take place on May 5-6 at Cavallo Point, in Sausalito. But let me take a crack at it now.

Game industry acquisition and investment deals have soared.

Above: Game industry acquisition and investment deals have soared.

Image Credit: Internet Dealbook

The Big Fish Games deal was notable because it was carefully put together. It has a big earnout, based on how well Big Fish Games does under Churchill Downs. Big Fish Games gets $485 million up front, and it gets $350 million more based on its earnings in 2015. The purchase price is 8.5 times to 15 times earnings before certain items like depreciation, and 1.6 times to 2.8 times bookings, according to an analysis by Adam Krejcik, an analyst at Eilers Research. Since Churchill Downs is only worth $1.8 billion on the stock market, this is a huge bet on its future in digital games. But many game companies have been bought at two times to 7.5 times bookings in recent times, Krejcik said.

One of the things we are seeing is a lot of potential buyers. It isn’t just the traditional game companies like Electronic Arts or Activision buying mobile upstarts. In fact, those companies have retrenched away from such strategies.

Rather, people see the obvious potential of mobile games — $25 billion in revenue this year, according to market researcher Newzoo, for an industry that is still considered to be in its early years — and want to be part of the land grab, said Dan Offner, the former general counsel for Oculus VR, who announced this week he is forming a new law firm, Offner & Associates, for game companies. In an interview with GamesBeat, he said he is becoming an investor as well.

Game deals by region

Above: Game deals by region

Image Credit: Internet Dealbook

“I don’t know if we are in a bubble or not,” he said. “We are in a place in the interactive industry where a lot of people are trying to grab land. Land is measured in different ways, but it is often measured in terms of eyeballs and the popularity of a property. I don’t think Microsoft bought Minecraft for transmedia. They bought Minecraft because they know that people are still going to be playing Minecraft for a long time. It’s an incredible global community, and that has value for their games business and their media business. That drove the acquisition.”

But the casino and online gambling companies may feel the pressure to shop for mobile social casino game companies. The Chinese, the Koreans, the Japanese, and the Europeans want to get in on the action. Platform companies like Google, Amazon, Apple, Sony, Microsoft, and Nintendo are out shopping, if only to keep a valuable chess piece from falling into the hands of a rival. Games have become a global business, and companies are racing to become big in all regions. We also see a new generation of successful digital game companies, like Valve, Kabam, Zynga, King, Supercell, Rovio, and many others.

Hollywood can provide another set of buyers. Warner Bros. may buy game studios that can turn out more Batman or Lord of the Rings titles, or it may just make more investments into companies like Kabam. Lionsgate is investing in mobile game companies that can take its properties — the Hunger Games, Divergent — onto the smallest screen. Kim Kardashian: Hollywood, a hit game from Glu Mobile, may generate a huge percentage of Kim Kardashian’s revenues, thanks to the popularity of her mobile title. Disney may wake up and fund a lot of Star Wars games. Transmedia is working, particularly on mobile, and that is driving more deals.

Average game deal sizes

Above: Average game deal sizes

Image Credit: Internet Dealbook

In short, the barriers that once isolated the game industry and game studios have come down. Many different companies can view game studios as chess pieces, and we see enough technological change associated with transitions in the game business to fuel more details. Each transition — like the shift from Facebook web to mobile, or from the PC to multiplayer online battle arena games, or from paid games to free-to-play games — is an essential ingredient in the deal frenzy.

As for why Facebook paid $2 billion for Oculus VR, a mega-deal that Offner was part of, Offner thinks it was based the belief that this would be the next big platform, not just for games but social, medical, industrial, and many other industries. Oculus has a chance to collect a lot of eyeballs.

This reminds me of the famous phrase created by Andy Grove, former CEO of Intel, in the 1990s. He said everybody was in a “war for the eyeballs.” But during the dotcom days, value was attached to eyeballs irrespective of revenues generated by those eyeballs. It was all about future potential, and that proved to be a house of cards that led to the dotcom crash of 2000 to 2002.

It seems like it’s wise to buy companies that are already generating revenues or could generate revenues. Under that logic, it was nuts for Facebook to buy Oculus, a maker of virtual reality goggles with no official product and no customers, for such a huge price. But it also would have been foolish to pass up the chance to being part of Oculus.

“Going to Oculus was one of the best experiences of my life, so not everything is logical,” Offner said.

Average game deals by sector

Above: Average game deals by sector

Image Credit: Internet Dealbook

 


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Founded in 2002, Big Fish is the leading online marketplace for premium casual games. Through its proprietary, data driven platform, millions of consumers seeking immersive, relaxing entertainment easily discover and purchase premium c... read more »

Facebook is the world’s largest social network, with over 1.15 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 w... read more »

Oculus VR™ was founded by Palmer Luckey, self-described virtual reality enthusiast and hardware geek. The company launched a Kickstarter campaign to help fund development of their first product, the Oculus Rift, a ground-breaking vir... read more »











Facebook mobile ad chief says mobile marketing is (and must be) highly personal

Thursday 13 November 2014 @ 6:48 pm
Facebook mobile ad chief says mobile marketing is (and must be) highly personal

Above: Jane Schachtel, head of mobile & technology, global vertical marketing at Facebook


SAN FRANCISCO — Facebook’s mobile advertising chief Jane Schachtel said that mobile marketers in particular must go the extra mile to make sure they treat consumers like people.

Mobile devices are highly personal, she says, so the advertising content presented on them must be carefully personalized.

The reward for marketers who do that well is significant. Schachtel said only $16 billion, or about two percent, of the total worldwide ad spend will be spent on mobile next year. That means there’s lots of room for growth. “This presents a huge opportunity,” she told the crowd here at the Mobile First conference Thursday.

People’s relationships with their mobile devices have gotten more substantive and complex. “People used to go to the mobile web to find one specific thing,” Schachtel says.

“Then came the feed. … Now people discover, they share.” When they do that, they leave lots of information (yes, on sites like Facebook) that marketers can use to get to know prospective customers better.

But not even Facebook has all the data needed to engage with mobile consumers. “No one company has all the data,” Schachtel said. “It’s just a lot of companies with a lot of data.”

It’s the careful combination of various kinds of information that allows marketers to fully personalize and target ads at consumers. “That big data we hear people always talking about is really all about relevance,” she said.

The results of having the right mixture of demographic, purchasing, product ownership, and demographic data can be impressive, Schachtel said.

When you have data on what products people currently have, and when they bought them, then combine that with data on their social activity, you can pinpoint down to a science what people you want to reach and when you want to reach them, she said.

“This is bringing people back,” Schachtel said. “This is making business personal again.”

But that’s still not enough. Marketers also need a way to track the effectiveness of ads the consumer might see online or offline, or on any of a number of mobile devices. They need to be able to attribute an eventual sale to the ad that “connected” somewhere along way — the one that moved the consumer toward a purchase.

This has traditionally been done using cookies, or small bits of HTML code installed in users’ browsers to track brand interaction. But on mobile, cookies aren’t as good for this, Schachtel said.

She said cookies overstate the number of people an ad reaches, or underestimate how many times people see an ad (possibly on different devices). So they can’t reliably track which ads may have led to a purchase.

This neatly led Schachtel into a plug for Facebook’s Atlas ad tracking service. “That’s Atlas,” she said. “With Atlas you have a powerful system where marketers can measure engagement across devices.

And then she left.


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Facebook is the world’s largest social network, with over 1.15 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 w... read more »











3 game-changing features Twitter is working on right now

Wednesday 12 November 2014 @ 11:58 am
3 game-changing features Twitter is working on right now
Image Credit: Garrett Heath

Twitter is getting some long-awaited updates.

The company’s VP of product, Kevin Weil, says native video shooting and editing, filters for surfacing relevant tweets, and updates to direct messaging are all in the pipeline. The announcement came in a blog post released today.

Earlier this year Twitter enabled users to natively embed GIFs and other videos. Now the company says it wants users to be able to record, edit, and post videos within its app. Twitter is most used during live events, so in-app video producing capabilities definitely capitalizes on that use case. Adding video functionality would also push Twitter to compete more directly with Instagram’s video editing and sharing tools.

Twitter says it’s also working on creating tools that will make surfing the Twitter stream less of a chore. So far the company says it’s experimenting with creating “snapshots” for users that highlight some of the biggest news on the service. Already, Twitter surfaces trending tweets, but it doesn’t go much beyond that in terms of helping users make more sense of the stream.

The company is also developing ready-made timelines for users who don’t want to spend time developing personalized lists. This could allow people to get into Twitter immediately based on the selection of a few key interests, which might help with the service’s sometimes daunting onboarding process.

Finally, Twitter promises to update its direct messaging system and provide a way for users to move public tweets to private messages seamlessly. One of Twitter’s projects is to enable users to share and discuss tweets publicly and privately via direct messages. We’ll know more about that looks like when the feature rolls out next week.


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Twitter is a real-time information network that connects you to the latest information about what you find interesting. Simply find the public streams you find most compelling and follow the conversations. At the heart of Twitter ar... read more »











Instagram now lets you edit captions, suggests accounts to follow in new People tab

Monday 10 November 2014 @ 11:57 am
Instagram now lets you edit captions, suggests accounts to follow in new People tab

Instagram today released two new features for its mobile apps. You can download the new version now directly from Google Play and Apple’s App Store.

First up, the app now lets you go back and edit captions on your posts. Instagram says this has been “one of the top requests that we’ve heard from the community, and we’re excited to finally bring it to you today.”

To change a caption, located the new “Edit” option in the menu beneath your image. All you have to do is tap it, edit your caption, and hit Done.

instagram_edit_captions

As the Facebook-owned company explains: “When you share a moment to Instagram, a typo shouldn’t get in the way.” Right, this should have been available from the very start.

More to follow


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Facebook is the world’s largest social network, with over 1.15 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 w... read more »











Forget engagement: This holiday season, social media is all about getting people to buy

Sunday 9 November 2014 @ 12:08 pm

GUEST POST

Forget engagement: This holiday season, social media is all about getting people to buy
Image Credit: Marco Paköeningrat

This holiday season, brace yourself for a new paradigm in social marketing — one that values sales over status updates and commerce over engagement.

Last holiday season, social marketers for major retail brands saw how many fans they could corral or how many likes they could amass. Those same marketers are now on a quest to deliver the strongest ROI for brands; not in “likes,” but in the form of social commerce success.

In November and December, during an estimated $650 billion holiday spending spree, Facebook and Twitter will both debut “buy” buttons that allow in-feed sales within the world’s two most prominent social networks. These new commerce tools will address retailers’ growing focus on driving sales through social media.

Given these recent commerce developments and the fact that Facebook will permanently abandon like-gating come November, our internal marketing team at Offerpop collected data from digital brand strategists to reveal trends and behaviors we’re likely to see this holiday season. Not surprisingly, over half (62 percent to be exact) of those surveyed, both domestically and internationally, will focus on growing sales and extending brand reach this holiday season.

We should expect to see marketers roll out robust advertising budgets, creative campaigns using features such as hashtags and referral programs, and focus on the social networks most effective at driving fan traffic to website stores. And don’t be surprised if said online store galleries boast user-generated content to fuel socially influenced purchases, such as this example from Canadian clothing company Hudson’s Bay.

Social media has already matured into a critical centerpiece of any retailer’s holiday strategy. With 1.28 billion monthly active users on Facebook and 255 million active monthly users on Twitter, the holiday consumer is now more dependent than ever on social media for information and incentives that will prompt ecommerce sales or in-store purchasing decisions. In fact, 72% of U.S. adults are active on Facebook at least once per month, giving digital marketers an opportunity to influence a majority of holiday shoppers on one platform alone. There is no doubting the potential for ROI here.

Retailers can’t be successful this holiday season without a sophisticated social media strategy. Our survey further found that 67 percent of marketers budgeted to spend more on social media this year than last. With increased investments, those marketers will turn to specific networks to accomplish ecommerce goals, and our survey results yielded surprising results in that department, too.

Despite the evolving landscape of social media, 92 percent of the marketers surveyed say they will allocate the majority of their social media holiday budgets to Facebook. With its frequency of use and slightly older demographic, Facebook remains the leader in accomplishing marketers’ ecommerce goals regardless of any “backlash” the network has recently experienced.

Instagram’s rapid growth has not gone unnoticed by marketers. Retailers are bullish on the photo-sharing platform, with 73 percent identifying it as the breakout social network of 2014. Instagram’s marketing roadblocks such as a lack of hyperlinks and a generally young user base make it a secondary option to Facebook and Twitter during the holidays, but brands are intrigued by the highly visual platform’s potential to add depth and reach to holiday campaigns.

However, our findings revealed that marketers are sitting on the sidelines of emerging networks like Snapchat and Swarm that lack a proven ROI for brands. 48 percent of marketers do not plan on investing in any emerging social networks this holiday season.

The survey data shows that social marketing is maturing rapidly, with a new focus on driving commerce and increasing investment in proven revenue channels like Facebook. This holiday season, we’ll see marketers testing Facebook and Twitter’s new commerce capabilities, while leveraging Instagram for holiday campaigns. Retailers simply cannot be successful during this critical sales time if they do not invest in targeted and effective social media programs.

Mairead Ridge is Senior Manager of Marketing at Offerpop in New York City, where she leads the creative and community team. The company offers a digital-marketing platform for businesses that can curate user-generated photos and video, engage with consumers via social media and connect with users on social platforms for ecommerce sales.


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Facebook is the world’s largest social network, with over 1.15 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 w... read more »

Twitter is a real-time information network that connects you to the latest information about what you find interesting. Simply find the public streams you find most compelling and follow the conversations. At the heart of Twitter ar... read more »











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