By Elliott Easterling, CEO

Many marketers are missing the point with Facebook and social networks. The complexity of managing company profiles, the risks of user-generated content, and the lack of control keep many marketers away from creating a robust social network presence.

Social media represents a sea change in the way that brands project and broadcast themselves. Traditional models of web advertising start from a website that is broadcast out to the public. Historically, advertising was placed to bring people back to this channel.

With the advent of social networks, blogs, and micro-blogging (Twitter), brands have had a whole new spectrum to broadcast their brands through, and in most cases, these are not contained within the safe and controlled confines of their site. These new advancements have required that marketers reinvent their digital marketing efforts to consider the nuances of these new media. Creating and managing a presence on Facebook involves a unique set of considerations that are not native to traditional web publishing.

One of the most interesting considerations is that marketers must not just “project” their brand through their website, but rather must make their brands “converse” through these new forms of media. The way that brands are now fragmented through these new channels and must now become animated and have a voice is completely changing the ground rules for digital marketing. Silent films now have sound, and the brands that do not have a voice in this new media will not reap its vast rewards.

I wrote last month on the opportunities that exist for acquisition marketing in Facebook. Now I’ll address retention marketing on Facebook, which warrants its own discussion (and a lot more beyond this).

The benefits to building a fan base in Facebook are akin to developing an electronic direct mail (EDM) list. Unlike EDM lists, on Facebook you can not only market to your customers but they can interact among themselves and do the marketing for you.

Marketers need to start to treat their social network fan bases as marketing assets and need to measure their effect on their sales. So when a promotion is dropped to an EDM list, a similar message should be dropped to Facebook fans. Ultimately the revenue generated from a Facebook fan base should be uniquely tracked within web analytics systems and reported back to senior marketing management just like every other key marketing channel.

What is amazing about Facebook is that it is an incredible value for the associated costs. Marketers spend significant amounts managing their EDM campaigns, and get much of the similar messaging capabilities and the benefits of an integrated social network “free” from Facebook. Facebook is in essence a Hosted Social Network for corporations, with very low marginal cost to touch consumers. Eventually Facebook may find new ways to charge corporations, and the risk of having your fan base hijacked with high marketing fees are very valid and need to be considered as you make your investments.

Let’s take a quick look at Starbucks. At last check they have over 5MM fans on Facebook. That base of evangelists can be activated through promotion and coupons to drive retail sales, which is likely having a very healthy effect on Starbucks’ bottom line.  Starbucks has a concerted and active paid Facebook fan recruiting program. It has yielded a base of fans that has nearly doubled in the last 4 months.

So when our clients ask us whether they should be advertising on Facebook to build up a fan base or to drive traffic to their site, my answer is usually “try both.” To successfully manage a Facebook fan base and a social media profile, you do need to have a concerted investment of resources within your organization — so that is a prerequisite to a fan building program. Facebook is not for all brands, but it is for more than have given it a real chance to play an integrated role in their digital communications.

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by Elliott Easterling, CEO

I recall the first day I opened up AdWords almost 6 years ago to test out the self service functions. That feeling of bliss came to me again when I explored Facebook’s self service tool for the first time last December.

Joy came to me with AdWords because I encountered the tool as a data driven marketer. I spent 3.5 years at Digital Impact (now Axciom Digital) learning the ins and outs of database marketing before I started Red Bricks Media. At the time, we were working with algorithms to process large amounts of user behavior and self-profile data to predict the best products to put into individual emails. This behavioral targeting experience is what got me excited about AdWords. I quickly realized that search queries were in fact behaviors that could be used to present targeted ads to potential consumers. I was amazed that I could tap directly into the flow of demand. The combination of powerful targeting and scale is what made Google such a useful tool for marketers.

Excitement came to me with Facebook because I recognized the same opportunity to build marketing programs with amazing targeting capabilities supported by significant scale. Facebook allows marketers to target users based on the content of their profiles. Rather than being fueled by behavioral data, Facebook campaigns are fueled by profile data. This data is incredibly clean and accurate because, in general, people do not lie about their interests on Facebook. They might exaggerate but they won’t likely lie because peer pressure from Facebook friends creates a system of accountability. The profile data in Facebook is especially powerful because it represents the brand of Facebook users. The things you put in your profile represent the things that are most important to you and also the way you see yourself and want to represent yourself to the world. Facebook profiles are the sum of passions, interests, and make up the brand of one. Facebook also provides a separate targeting axis - one that surrounds demographic data. Where you live, where you went to school, and every piece of data collected in the registration process is targetable on Facebook. This matrix of interest data and demographic data make for great user segmentation and targeting. See chart below.

Since users are not actively seeking out information on Facebook as they are doing on search engines, the click-through rates (CTR) tend to be lower. This limitation can be overcome using the sheer scale of available inventory on Facebook, which can yield great click volume even with low CTRs. From our experience, Facebook campaigns can realize good conversion rates because our campaigns heavily segment users into tight interest groups and then present compelling messages to those users. Our background in database marketing has given us an edge in developing and designing successful Facebook campaigns.

Is Facebook right for your business? It is, to the degree to which interests in Facebook correlate to an interest in your product or services. If, for example, you are in the business of selling tissues online, you may not get much out of Facebook’s targeting capabilities. No one is likely to wax poetic on the virtues on a clean nose on their profile. Alternately, if you sell tours of India, you will have access to the more than 2.8MM 18 and older Americans that that show “travel” as an interest in Facebook. Matched with demographic data, a campaign could even target users in San Francisco with customized messaging – “Explore our tours to majestic India, flights leaving from San Francisco daily.”

As performance marketers, we tend to focus more on media that drives conversions. Facebook also has the amazing ability to drive great branding, so let’s not rule out the campaign for the tissue company quite yet. Facebook branding and fan development warrant a separate discussion, which is forthcoming next month.

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