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November 29, 2007

Facebook's Chamath Palihapitiya Keynote at SES Local: IML 07

By Li Evans

Facebook unveiled new advertising features at the beginning of the month.

So they wanted to think about how people buy things.  But what about people who just want information.  How do businesses say "I have something interesting you should take a look at."  Facebook thinks they can work with mediums like newspapers, yellowpages, etc.

People influence people.  Your friends recommend things to you, you are more likely to do something because you've been influenced by someone who you trust.

Mid 2005 Facebook has changed, no longer just high school and college users.  They've seen unprecedented growth, since they offer "things" people can really use, as well as allowing 3rd party developer access to their API.  Diversity is unbelievable.  Majority of the users are out of college - they are the core Facebook user.

Facebook has 55 Million active user.  Active user is someone who has used the service in the last 30 days.  Equivalent to the entire paid newspaper service.  They are doubling ever 6 months.  By fall of next year they predict to have over 155 million.  Most users return every day. 70 billion page views a month, at the end of this year over 1 trillion pages a year.  Every users (average) generated 40 page views a day.  Gives Facebook the ability to have a subtle conversation with the users.

Social Graph - trust and safety comes along with developing a network.  With accurate social graphs and facebook, you can distribute your information virally, you tell your friends, they tell their's  and so on.  All for free and a lot less friction than the way it use to be done.  The news feed and the mini feed is what powers the distribution of this type of information

The news feed is a "readers digest" of your friends lives.  This page dynamically changes constantly.  The mini-feed is where you decide what content and information that you want your friends to see.  The mini feed "Feeds" the news feed.  This powers the viral distribution of information at no cost.

Facebook Platform, any third party can access to these benefits.  In the first 4 days 1 application had 1 million users (iLike), today there are over 100 applications with more than 1 million users.  So how does all of this relate to advertising.

Distribution is a precious commodity, commanded by the few.  Newspapers, radio and TV.  distribution became a bottle neck.  But today the game is different.  Now, for free - anyone can now in an effortless way can have access to massive amounts of distribution.

Facebook Ads - 1st thing is Pages - this allows business to create a page for free.  This allows you to created your own network.  2nd thing is Social Ads, it works as a free market auction, CPC or CPM.  3rd is Insights, gives you a views into your ROI on Facebook.

Pages - Design your own page, for free.  Can add photos, videos, events, discussion board, flash content, music player.  3rd party application - open table, zagat, fandango.  These all take less than 10 minutes to create and implement.  These all allow the business to connect with people and have very powerful conversations with people.  Beacon allows social actions from your site to distribute it to Facebook, users control their information (Yelp is an excellent example of this).

Social Ads allow you to amplify that social distribution.  Social actions + content is what Social ads is about.  If you are a local business, you can now create 1 to 1 ads.  Can appear in the newsfeed or the left hand area for ad units.  Targets exactly the audience you want.  Criteria - location, county, state, interests, gender, activities, major, tv shows, books, work history, political views, relationship status, etc.

Insights holds Facebook accountable.  gives the advertiser information on page views, who's clicking on the ads.  Pulse (facebook product) gives you insight into every dollar spent into the ad system.

What does all this mean?  Just get started!  www.facebook.com/ads.

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