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Facebook’s engagement ads could be the standard we need for social media advertising November 11, 2008

Posted by jeremyliew in advertising, engagement, social media, social networks.
3 comments

The WSJ today notes that Facebook lags Myspace substantially in ad sales, despite having surpassed MySpace in usage:

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[Facebook] … says 70 of the U.S.’s 100 largest advertisers have advertised on its site since 2007. But its share of total number of U.S. online display ad views was just 1.1%, according to market research firm comScore Inc., in its most recent report in June.

News Corp.’s Fox Interactive Media Unit, which includes rival MySpace.com, is the market leader with 15.9% of display-ad spending, according to comScore.

I believe that this is because most of the ads the Facebook sells are not standard units, unlike most of the ads that MySpace sells. As I’ve mentioned before, new forms of advertising are hard.

However, I am excited about the new engagement ads that Facebook is now selling:

The Palo Alto, Calif., company is rolling out a new ad format called “engagement ads” that further blurs the line between marketing and social networking.

The new ads appear on the main screen when a person first logs in to Facebook. They prompt a user to do something within the ad, such as comment on a movie trailer or RSVP for the season finale of a TV show.

This could be the first move towards a new standard for social media advertising. As I said previously:

The thing that differentiates social media sites from other forms of online media is not just user generated content, it is also that users are willing to affiliate themselves with brands. This takes many forms, from friending Scion on Myspace to putting a Natasha Bedingfield style on your Rockyou photo slideshow, to buying one of your Top Friends a Vitamin Water. These willing user affiliations/endorsements of brands are clearly valuable to marketers of those brands. Right now though, these deals are being negotiated on a one off basis; they look more like business development deals than selling ads off of a rate card. It will take a while for the social media industry to establish standards for selling this incredibly valuable inventory to brands, but I suspect that this will happen over the next 12-36 months.

Facebook’s engagement ads are potentially the first step towards defining what the ad unit will be (prompting a user to take an action that affiliates themselves with a brand). Flixster has had good success with this concept in many of its campaigns with movie studios. I think this concept could well be the basis for a new standard unit for social media, and I hope that the rest of the industry gets behind it.

Twelve lessons from World of Warcraft for designing MMOGs September 19, 2007

Posted by jeremyliew in engagement, game mechanics, gaming, mmorpg, social media, social networks, virtual worlds.
4 comments

From Gordon Walton’s presentation at GDC about making MMOs post World of Warcraft

1. Take a critical look at your genre rather than being a fan or having experience. Blizzard were not experts in the genre — in fact, the company had never shipped an MMO before — Blizzard learned well from the genre’s past.

2. Keeping system specs low. “This is not about getting some more customers — this the opportunity to get lots more. Like 4-10x more.”

3. Quality counts. “What was consistent about every MMO pre-WoW is that they were buggy as sh*t. They were rough. Even if they were fun, they were rough. They all launched with hundreds, if not thousands, of known bugs.”

4. Embrace solo play, because gamers want it. Blizzard says, “We look at soloing as our casual game.”

5. Simplify the GUI! WoW’s interface is “as simple as it can possibly be and as fun as it can possibly be … but no simpler.”

6. It sucks to build content, but you have to do it. A player should not perceive all that she can do from the beginning of the game: something tantalizing has to hang out of reach. “If I can visualize everything that will happen to me by the end by level 3, the game’s over.”

7. Strong PVP (player vs player combat) is essential. Besides the core PVP gamers, “a certain percentage of people [exist who] don’t know that they want to compete once they have some mastery.”

8. Don’t tune for the hardcore. Don’t forget that the object is not to keep people as long as humanly possible, but to provide entertainment. When it comes to grinding, “they will do it, but they will hate you.”

9. Let players quit. Otherwise, “they quit because they’d stayed too long… the only way for them to escape was to demonize the game.”

10. Give players clear direction and choices. “An accessible game is directed. You never leave them in a place where they go ‘what do I do next?’ The vast majority of customers — particularly when you get out of the hardcore — need the signposts.” But don’t give them too many choices, and make them all good choices. People want to feel like things are complex, but they don’t really want them complex. You have to give them the illusion of complexity but keep it super-simple.”

11. An MMO should be easy to learn but difficult to master. “Nobody’s entertained by feeling incompetent. Feeling competent and gaining mastery is a huge part of game fun for people.”

12. Brands matter.

Some of these are also applicable to social media sites. Worth reading the Gamasutra summary of the talk for more color.

Facebook for engagement; Myspace for self expression August 28, 2007

Posted by jeremyliew in business models, engagement, facebook, myspace, self espression, social media, social networks, widgets.
4 comments

As Techcrunch, Mashable, Venturebeat and others have noted, Facebook is preannouncing a number of changes to its APIs, including a shift to user engagement as the way it presents apps in the directory:

This week you’ll see us shift our application directory metrics to a focus on user engagement. This will help inform users as they make decisions on which applications to add as well as shift developer focus to engagement rather than total users. More specifics will be available as we roll out these changes this coming week.

The focus on engagement is a reflection of how app developers are already behaving today, especially when compared to the widgets being built for MySpace.

Both Facebook and Myspace disallow advertising in the widget/apps appearing on profile pages. But Facebook allows application developers to control the canvas page and place ads on those pages, while giving access via the APIs to the social map. As a result, there are already quite a number of companies reputed to be doing over 100m “pageviews” (canvas views) per month, including iLike, Flixster, Rockyou, Slide, Texas Holdem, HotOrNot, and others. [disclaimer – Rockyou and Flixster are Lightspeed portfolio companies]. The companies with a lot of installed facebook apps are all already pursuing engagement, even before Facebook’s change in the application directory. It’s in their business interest to do so.

In comparison, Myspace is still primarily about self expression. Click through rates from widgets on Myspace are dramatically lower than on Facebook apps. And more importantly, when a user clicks through on a Mypsace widget, they stay for less pageviews than a Facebook app. Because the interaction takes place off site (off Myspace’s site) and because there is no access to the social map, the primary activity is for a new user to create their own widget. There is limited ability for a user to interact with an existing widget because there is such a low level of shared data between the widget and Myspace.

Facebook has only a third the pageviews and UU of Myspace in the US. All else equal, you would expect all of the the top Myspace add-on sites according to Mashable to have over 100m PV/month if Facebook has already been able to generate so many at that scale:

2006 Top Myspace add-on sites

But according to Comscore, only half of the these ten sites have more than 100m pageviews/month, and in at least some cases (e.g. Youtube), the primary traffic driver is not MySpace.

PVs for myspace addons

Given the striking difference in engagement levels, its not surprising that all the other social networks are considering a platform strategy of their own.