MIS Assignment No.

3
on
Facebook
By: Group No.14, Sec-G








Why do people use Facebook and what do they do when they are there?
Facebook is an online social networking service. Users must register before using the site, after
which they may create a personal profile, add other users as friends, exchange messages, and
receive automatic notifications when they update their profile. Additionally, users may join
common-interest user groups, organized by workplace, school or college, or other characteristics,
and categorize their friends into lists such as "People from Work" or "Close Friends". People use
Facebook to share information about their daily lives with friends, share photos and their
activities, play games, share videos. With the growing popularity of Facebook, users are using it
as a platform for advertising about their interests, products etc. The timeline feature gives the
users a unique opportunity to create a unique imprint of theirs in virtual space. Facebook meets
two basic social needs: (1) the need to belong and (2) the need for self-presentation and these are
important reasons why more and more users are associating themselves with Facebook every
day.

Evaluate the success of advertising on Facebook.
Facebook Ads has been a wonderful initiative which consisted primarily of Display Ads and
Facebook pages. Advertisers could target their campaigns on the basis of gender, age, geographic
location etc. as stated on the user profile pages. The Cost per Mille and Cost per click technique
has been chosen whereby advertisers chose their preferred bid as they wished. A particular ad
had to compete with other ads as a part of auction and accordingly it was displayed to the user,
either because they were popular or advertisers offered higher price.
Corporate pages was another initiative which attracted users to like the pages and receive status
updates, pictures and videos posted by the firm etc. With the inception of social ads, companies
targeted friend of users who have already liked the page. Facebook also introduced sponsored
stories and Ads for applications, which continued to turn user interactions into advertisements.
In an attempt to step up the pedestal, Facebook rolled out an Ad product called Promoted posts in
which brand page owners could pay to push their content to a broader audience. For up to $500,
brands could ensure a larger percentage of fans noticing their messages and announcements. The
same facility was extended to individual users for $7. Still early in adoption, it remained unclear
whether promoted posts would gain traction amongst users or if that was a service reserved for
business and marketers.
After filing for IPO, as the stakes increased Facebook had to search for other avenues in order to
maximize revenues. They adopted the promotion of large banner ads in the logout screen. The
initial price point of around $.7 million gave hopes that they would add additional revenues
without disrupting user experience. With advertisements, the user experience was becoming a
problem. Users considered the advertisements not relevant to them as spams and so, it was
important to advertise the right product to the right customer.
Mobile sponsored stories added a new dimension for mobile advertising using Facebook. They
performed strongly. Receiving 12 times click through rates as compared to desktop devices, but
they still accounted for 14% of the revenues. Delivering advertisements on third party apps was
the upcoming challenge. Moreover, mobile ad network could spark a host of privacy concerns
related to targeting users outside of Facebook based on personal information.

Evaluate the success of Facebook fan pages.
As an advertising initiative, Facebook started with Ads and Facebook pages. The advantage that
Facebook had in these was that the advertisers could target customers based on certain
demographics and interests. The pages were rolled out to allow businesses, brands, products,
artists, and public figures to create free Facebook pages to attract Facebook users and establish
better relationship with their fans through the status updates, photos and other activities. This
was different from normal advertising on Facebook and these ads also attracted two to ten times
more users.
It is easier to maintain a fan page since it functions much like the personal pages, but you can't
send out private messages to your fans. You can send updates, but they do not go through the
messaging system and there is no clear alert on the recipient's page that tells them the alert is
there. It is actually a very ineffective way of sending out messages, so really there is no real great
way to message your fans. So it is really easy-to-use and you can always keep in touch with your
best-loved celebrities
In the short term, Facebook fan pages bore huge success for the advertisers but then the
profitability and sustainability of this mode was skeptical for long term purposes. The
measurement of these ads in the form of conversion ratio was unknown. To increase its revenue
as well as attract more advertisers, Facebook came up with promoted posts where a page owner
can promote its page so that it pops up more in the news feed of the users. This led to wider
distribution of the posts and resulted in more visibility of the brand. It was extremely beneficial
for startups, ecommerce websites and other business as they could easily use it for monetization.
The success of fan pages is limited to only few top brands pages. Also fake accounts and likes
hve resulted into pollution of the fans. A report submitted by Ogilvy says that there has been a
decrease in the organic reach of content posted on Facebook pages since October 2013 from 12%
to 6%. Such reasons question the long term profitability of these fan pages.

Evaluate Facebook Platforms and Facebook for websites.
Facebook platform enables third-party developers to develop applications and then connect with
the users by accessing their data and gaining more users. These Platform products enable people
to share the things theyre doing not just on Facebook.com, but also across the web on apps,
websites and mobile devices. This introduction had a rather fast growth: during the first half of a
year the number of applications was 13000. It has been a successful medium for all many app
developers and it can be known by the fact that within first three months of its launch, it released
3000 applications. This was a medium for the app developers to gain more users and have an
opportunity to reach billions of users and monetize through IAP.
The main disadvantage the platform provided was for the application whose usage was very
less. Although on the other hand, it provided the successful ones with massive profits.
Payments from virtual goods and other fees made up $557 million or about 15 percent of total
revenue in2011. The remaining $3.154 billion in revenue came from advertising. Facebook has
focused on creating platform upon which developers can build games and apps, but it still seems
to be struggling to monetize it beyond advertising.
Facebook has a grand vision: to connect the entire Internet, and every website on it, with a layer
of social integration. The social network has been developing tools to assist in the spread of this
vision since the introduction of the Open Graph in 2009.Now, with over 10 social plugins
available to the public (and free of charge), website owners need to decide how best to utilize the
available tools for their businesses.
Facebook for websites had three different types of functionalities for sites, first was that the new
user can just login with his Facebook account and need not open a new account for that site.
These way the site would have all the details about the user through his Facebook profile and this
can be leveraged by sites for various purposes. Third they could post on behalf of users and thus
can increase their number of users also the users can get connected with their friends who visit
the same site. This has been very successful for the third party sites and has resulted in increased
user engagement of 15-100% and a 30-200% increase in registration. The global reach of
Facebook can be leveraged by sites and for Facebook, this will be a foothold over web.