Facebook: Opportunities for Brand Advertisers

Daniel SlotwinerHead of Measurement Solutions

1 Facebook research supports brand advertising objectives

2 Capturing Value (measurement)

3 The power of fans… and their friends

Research & Measurement Objectives

1. Re-establish Brand Metrics as the primary outcome measures of interest

2. Use Brand Metrics to evaluate new ad and platform products

3. Demonstrate Facebook’s role in influencing Brand Metrics

4. Drive development, standardization and adoption of methodologies that capture brand value

Scale & speed▪ Reach 750MM+ people worldwide▪ Statistically reliable and representative data

samples collected within a matter of hours, not weeks

Authentic & active▪ Real-name culture and real-world sharing

▪ More than 30 billion pieces of content (photo albums, web links, news stories, etc.) shared each month

▪ Real demographics▪ On the site almost 6 hours per month

▪ 2x next closest site▪ 50% of monthly active users log on each day

Analyze results from innovative data sources▪ Attitudinal, chatter, structured

A global information platform

160M Facebook users in the US

Source: Facebook Internal Data for the US, May 2011

55% of US users return daily

Source: Facebook Internal Data for the US, May 2011

Nielsen Study Released on Monday

Neither resonance nor equity measured in traditional MMM

framework

Driving consumers towards four brand advertising goals Grow product

market potential

Increase short term sales

Drive brand resonance

Promote long-term brand equity

Recall

Brand / Product

awarenessMessage awareness

& associatio

n

Consideration

Purchase intentPurchase

(frequency, sales)

Associations

Loyalty

Advocacy

1

2 4

3

BackgroundBackgroundNielsen NetEffect meta analysis:

“There is no correlation between CTR and ROI%”

Data collection via research polls

Increased participation100x higher response rates than CTRon ads recruiting for offsite surveys

More timely, representative samples1000 respondents with nationallyrepresentative demographics in 15minutes

• Tracking since March 2009• Very strong agreement with Rasmussen (r = 0.91) and Gallup (r = 0.90)• Higher agreement with both than between Gallup and Rasmussen (r = 0.84)

Facebook margin of error +/- 2% or smaller | Gallup margin of error +/- 3% | Rasmussen margin of error +/- 4%

Do you approve or disapprove of the job that Barack Obama is doing as president?

External validity: Political opinions

Comparing the Bid Laden boost

The measured “Bin Laden boost”• Facebook Polls: +10% approval• NYT/Gallup: +11% approval• Washington Post / Pew: +9% approval

11/5

/10

11/8

/10

11/1

1/10

11/1

4/10

11/1

7/10

11/2

0/10

11/2

3/10

11/2

6/10

11/2

9/10

12/2

/10

12/5

/10

12/8

/10

12/1

1/10

12/1

4/10

12/1

7/10

12/2

0/10

12/2

3/10

12/2

6/10

12/2

9/10

1/1/

11

1/4/

11

1/7/

11

1/10

/11

1/13

/11

1/16

/11

1/19

/11

1/22

/11

1/25

/11

1/28

/11

1/31

/11

2/3/

11

2/6/

11

2/9/

11

2/12

/11

2/15

/11

2/18

/11

-10%

0%

10%

20%

30%

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

Intent, Attendance, & Weekend Gross

% inte

ndin

g o

r re

port

ing a

ttendance

Openin

g w

eekend g

ross (

millions)

External validity: Movie receipts

Did you go to the movies this weekend?

Are you planning to go the movies this weekend?

R = .89

R = .79

Intent

Attendance

Weekend gross ($M)

0% 10% 20% 30% 40% 50% 60%$0

$25

$50

$75

$100

$125

$150

$110,307,189

$128,122,480 $125,017,372

$70,838,207

$30,833,665 $24,005,069

$44,026,211 $40,678,424

$36,063,385

$55,665,805

$17,734,040

$46,016,833

$6,542,779

$29,514,054

$1,218,868

Opening weekend gross vs. Facebook poll response6/10 – 2/11

% planning to attend (7 days prior to opening)

Openin

g w

eekend g

ross (

$M

)

Intent question: Are you planning to see [movie] in theatres? Top 2 box of 5-point scale summarized; All samples 13+ and N>500Question asked 11:00 am PT, 7 days prior to premiere (generally Friday)

ROI proxy: Establishing correlation

Facebook users asked a week before release:

“Are you planning to see [film] in theaters?

R = .90

Ad effectiveness

Ad Recall Message Association Purchase Intent

-5%

0%

5%

10%

15%

Delta versus control – 24 hrs post-exposure

Homepage ads

Advertising on Facebook moves metrics

+13%

+3%

+1%

Source: Nielsen 5/12/11, n=399

• Predictive model for opening weekend box office gross established (R2 = .89)• β1xi1+…+βpxip where:

o β1 = purchase intent

o β2 = ln(purchase intent)

o β3 = number theatres

• +1% in purchase intent 1 week prior to opening ~$4M (+/- ~$1M) in additional opening weekend revenue

• Estimated advertising cost to move intent 1%: $600K

• ROI for opening weekend alone ~700%

Media In-vestment

Incremental Sales

Average movie per-formance

$600K

$4M

ROI proxy: Calculation of ROI

700%

ROI

Ad effectiveness

Standard measurement

What it means TVOnline

comparable data

Numbers, demos, overlap & frequency Nielsen GRP Nielsen OCR

Changes in perceptions Nielsen IAG Nielsen Brand Effect

Impact of actual sales Custom solutions (MMM, etc)

Custom Solutions (MMM, comScore, proxy

markers)

Developing cross-platform measurement

Reach

Resonance

Reaction

Value of Nielsen OCR

Measure online reach and frequency in a consistent way, across publishers and for your entire online media campaign

Understand the demographics of who you are actually reaching online, in a consistent way across multiple publishers

OCR reports include campaign, demographic segment, and placement-level GRP calculations that are comparable to other media, including TV

Audience identification

True reach & frequency

Comparability

Control group created dynamically1 Ad displayed to user

2 Polls next day in ad context Fast, representative results

• Summary results with demographic cuts delivered within week following campaign

• High response rates, 10-100x of other methods, ensure representative sample & not “professional survey takers”

• Users randomly assigned to exposed & control groups while ads are served, yielding two groups that are perfectly matched on targeting and site usage

Ad Effectiveness: Nielsen Brand Effect

Social context boosts effectiveness

1.6Xlift in brand recall

2X lift in message awareness

4Xlift in purchase intent

Ad effectiveness

Source: Nielsen

comScore whitepaper▪ The right metrics for measuring earned media are reach and frequency, not just raw counts

▪ Friends of fans are the biggest opportunity for marketers on Facebook and are largely untapped – 34x the size of the fan base

▪ Fans are primarily consuming content from pages in the Newsfeed, not by visiting the page itself; brands should be optimizing for this context

Facebook population

Fan base500K fans

Friends of fans60M friends

US Facebook data

My friend likes this brand

Ads with friends

Fans are more valuable when they impact their friends

Facebook population

Fan base19M fans

Friends of fans527M friends

This is word of mouth at unprecedented scale

Global data

Starbucks

Source: The Power of the Like, comScore and Facebook, July 2011* Numbers compared to average internet user

Significant opportunity with Friends

Brand Engagement

27% more searches by friends of fans

Web Traffic

2.6x more site visits by friends of fans

8% higher spend11% more transactions

Sales

Reach + Impact Value & ROI

Communication Types

Reach

(Il

lustr

ati

ve)

Series1

Today's ReachPotential ReachTotal Population

Sponsored Stories

&

Social Ads

PUSHPULL

Endorsed Brand Messages

Friend-endorsed Brand Messages

Direct from Friends

Passively from Friends

Opt-in from Brands

Generic Brand

Messages

Ad effectiveness

Thank You.

▪Daniel Slotwiner▪slotwiner@fb.com