social media is big business
TRANSCRIPT
SOCIAL MEDIA IS BIG BUSINESS
Ben RubensteinTufts University EXP-50
BIG QUESTIONS
How does social media make money?
What drives the value of social media for users? For advertisers? For investors?
What risks and challenges should we be aware of?
What’s the outlook for the social media economy (and related economies)?
HOW MUCH IS SOCIAL MEDIA WORTH? (JUNE 2015 EDITION)
HYPE OR HOPE?
HYPE OR HOPE?
2009:$250 million valuation
April 2010:$1.35 billion valuation
Nov 2010: Rejects $6 billion Google offer
Nov 2011: $12.8 billion valuation
2012:$5.8 billion valuation 2015: $5
billion valuation
HYPE OR HOPE?
Nov 2013: Rejects $3 billion Facebook offer
May 2015: $16 billion valuation
Apr 2012: $4.25 million valuation
Apr 2013: $800 million valuation
HYPE OR HOPE?2015: $21 billion valuation?
2013: $1.5 billion valuation
2014: Acquired by Facebook for $19 billion
Would you invest in social media?
BUSINESS MODELS
Advertising
Virtual Goods
Freemium
Subscription
ADVERTISING
VIRTUAL GOODS
FREEMIUM
SUBSCRIPTION (PREMIUM)
Would you pay for Facebook? (or Instagram)
““If you’re not paying for the
product, you are the product.”Anonymous internet pundit
“
USER VALUE: DATA
DATA MINING + SOCIAL LISTENING
USER VALUE: CONTENT
Instagram: “A non-exclusive, fully paid and royalty-free, transferable, sub-licensable,worldwide license “
LinkedIn: “copy, prepare derivative works of, improve, distribute, publish, remove, retain, add, process, analyze, use and commercialise, in any way known or in the future discovered…”
Facebook: “...does not end upon the deactivation or deletion of a user’s account, content is only released from this license once all other users that have interacted with the content have also broken their ties with it” �
Nope.
ADVERTISING + THE INTERNET
TENSIONS
Business Objectives
User Experience
ORIGIN STORY
Advertising became dominant because:- Easy to implement- Easy to sell to investors (‘investor storytime’)- Attention is everything (vs. print ads)
�“The primary benefit of online advertising is the ability to see who’s looking at an ad.”
THE AD-SUPPORTED WEB
PROS:‘Free’ contentPersonalizationOpenness
CONS:TrackingCentralizationClickbaitFilter bubbles
ESCAPE HATCHES
ESCAPE HATCHES
ESCAPE HATCHES
WHY AM I SEEING THESE ADS?
WHY AM I SEEING THESE ADS?
WHY AM I SEEING THESE ADS?
WHY AM I SEEING THESE ADS?
WHY AM I SEEING THESE ADS?
RETARGETING
““Facebook has collected the most extensive data set ever assembled
on human social behavior.”
Targeting
Targeting
Targeting
Targeting
Targeting