The previous article of mine sketched the architecture of Facebook’s business.
Bloomberg recently detailed how advertising, the main source of income, is done on Facebook.
Generally, some points from a business perspective can be drawn from this:
- Facebook turns market research from “push” to “pull”. Facebook users, who respectively are businesses’ consumers, are given the platform and are tempted to share their preferences in lifestyle without being directly asked by market research people.
- Lesson: while Sandberg affirmed “You want to target everyone? We can give you that“, more luxury products/services have higher chance to win than convenient goods. The reason is that people (consumers) usually associate themselves with things they believe make them perceived by their connections as connoisseur. Coca cola is a nice exception to this, partly because it is one of the most expensive brands in the world.
- Effects of relationship-centric of Facebook
- Segment the market for businesses. People with similar demographic characteristics can be grouped together. It is more difficult to do so on ego-centric networks like MySpace
- People are influenced by their friends and families. Marketing techniques using social and psychological influence can be used