Facebook & Nielsen

Proving Facebook’s Brand Value

28/9/2009

Facebook & Nielsen

28/9/2009

Facebook & Nielsen

Overview

Facebook has announced a partnership with Nielsen, which will see the research company serve

polls to Facebook users. The move, following fresh on Facebook’s announcement that it now has

300 million users and is ‘cash flow positive’, shows that the young social networking site is

determined to grow up.

Evaluation

Many commentators have expressed doubts that social networking sites would ever be able to find

viable business models. MySpace initially seemed like a canny purchase by Rupert Murdoch, but as

its advertising deal with Google nears its end, a source of replacement revenue is yet to be found.

Likewise Google has spent a significant amount of time searching for a way to monetise YouTube.

Both of these sites have spent much of their time trying to bring big-value brand advertisers on

board; in contrast to this, Facebook’s success appears to be built on a model closer to that of

Google’s AdWords, allowing a multitude of small advertisers to run their own campaigns. According

to analysis by Business Insider, $200 million of Facebook’s revenues are from its self-service ads:

these are often very basic, and carry direct response messages. However the deal with Nielsen

suggests that, like Google, it now wants to start bringing on board companies more interested in

building brands rather than driving cheap clicks.

The partnership between Facebook and Nielsen, named Brand Lift, mirrors existing services

including Dynamic Logic (a WPP company) that strive to prove that digital marketing can build brand

awareness and shift consumer perceptions. Whilst many strive to position digital marketing as the

young dynamic up-start of advertising compared to the tired old man of TV, most websites would

love to be able to sell multi-million dollar ad-slots without ever having to show how many clicks it

drove.

Facebook’s Nielsen partnership is another step on the road to proving digital can do the same job

that offline has long claimed as its own.

Mindshare’s POV/Policy

If Facebook’s Nielsen partnership can prove that digital marketing really does shift consumer

perception and can improve brand affinity, it will mean that it can start to take advertiser budgets

that at present would end up in TV or more traditional formats, rather than fighting with Google

over direct response funds. In addition advertisers will be able to get invaluable insight into the

effectiveness of highly efficient digital campaigns.

For More Information:

http://www.businessinsider.com/how-facebook-became-cash-flow-positive-a-year-ahead-of-

schedule-2009-9

http://sanjose.bizjournals.com/sanjose/stories/2009/09/21/daily24.html

Author(s): Ciarán Norris, Head of Social Marketing: Mindshare Worldwide (London)