Are Your Facebook Like Buttons for Sale?

It’s been about a week since the F8 conference, and Facebook’s new Social Plugins, including their Like button, remain the biggest news in social media. One of the most important benefits of the Like button is that it enables brands to grow their fanbases without cannibalizing “traditional” website metrics, especially e-commerce revenue. And Facebook is happy, obviously, to dramatically increase their web presence and their level of profile data per user.

But I see already that the Like button could be doing something more. Here’s an example: I go to TripAdvisor.com and select The London NYC (disclosure: they are a client). I click the “Like” button there, and here’s what appears on my Facebook wall:

“Aaron likes The London NYC on TripAdvisor.”

So what happened? TripAdvisor just got two links back to their website by piggybacking on the brand equity of The London NYC, one to TripAdvisor’s page for this hotel and the other to TripAdvisor.com. Yes, the hotel gets measurable value in directing people to its TripAdvisor page, but that traffic is substantially less valuable than traffic to the hotel’s own site.

And therein lies the opportunity: The Like button could create a new B2B market where Fans are the currency. In addition to driving traffic and/or revenue, could sites like TripAdvisor charge for driving Fans, aka: Likers? Look at your own website, could your Facebook Like buttons be for sale? Help me if I’ve missed this, but I don’t see anything in Facebook’s Terms of Service that forbids it.

We can ask this question across a spectrum of business models/relationships; below are three general categories, to help get the conversation started:

• Keep the target of the Like button at its source: If implemented, would/should Like buttons on Amazon.com point to the Amazon product pages or to the manufacturers’ pages? I would imagine that many manufacturers would prefer Amazon because of the heavy revenue-generating benefits.
• Point the Like button to a third party site: The existing Like buttons on IMDB.com could point to that movie on Netflix, for example, to help drive revenue. Studios might prefer this for movies like “Up in the Air,” which just sort of come and go. For franchises like Star Wars, however, the studios might prefer the long-term value of the fan and potential merchandising opportunities that can be realized by directing to their own website.
• Point the Like button to the manufacturer/provider’s page: This is the TripAdvisor example. I could see many hotels at least considering paying to have that Like button point to their own websites. See below for what they would gain by doing so...

To further highlight the opportunities and threats of the Like button, let’s continue with the TripAdvisor / London NYC example: Replacing TripAdvisor's Facebook “Share This” buttons with the Facebook “Like” buttons might seem like an incremental shift, but it’s not. It’s a power grab; it’s a first (and commendably early) move in a fight for fans and for eyeballs that drive ad revenue. The hotel misses out in at least three ways:

• Missed long-term benefits of having the potential guest in its social graph. When I click that Like button, I have NOT become a fan of the hotel. I am not in that hotel’s social graph, and their marketers are not really any closer to me than if I clicked nothing at all. (Side note: we’ll have to discuss “fan fragmentation” in another post – pretty soon I’ll have many different flavors of becoming a fan of the same hotel, for example, via different review sites)
• Less potential traffic to its own site (bad for a variety of reasons, including diminished upsell opportunities)
• An arguably diminished share of potential revenue

Would hotels be willing to pay to regain these opportunities if TripAdvisor were to point their Like buttons to the hotel sites? Would TripAdvisor be willing/able to price and maintain this service in a way that makes up for their opportunities related to more site traffic?

The possibilities here are big. The big Social Media prize for 2010 is to determine the value per Facebook Fan for a given brand (and Twitter fan, FourSquare fan, etc). The toolset is not fully evolved here, but WebTrends is getting close with Facebook and others are soon to follow. In the meantime, some focused spreadsheet-building and a holistic metrics approach can yield at least an estimated FB fan value. As that number becomes more clearly defined, Fans could become a new B2B currency of the web. The review and reseller sites would have to include in their pricing the overhead cost of maintaining hundreds or thousands of Like button destinations, but the potential is certainly there.

Yet despite the opportunities, I don’t see this transition happening overnight. Here's three reasons why: 1) Depending on the brand, value per fan metrics are fuzzy to non-existent; 2) supporting this market could require large-scale technical and sales efforts; and 3) no turnkey e-commerce model for this like with Google’s AdWords.

Look for small sites –probably bloggers- to take this on first, most likely as an ad-hoc revenue model along with AdWords and banner ads. These small sites can skirt around the above challenges with spreadsheets and a manageable volume of Like buttons.

I focused on hotels today, but keep in mind that this discussion can apply to a large swath of websites – pretty much any site that reviews or enables ecommerce. Where do you think this opportunity will be realized first?

Mobile Adoption Changes the Revenue Model of TVs in Hotels and Resorts

Today’s post looks at a major effect that mobile adoption has had within hotels and resorts....

• The Trend: Communication and content-serving technologies are on the brink of total ubiquity and portability. We’ve covered this several times in this blog -- basically everyone will have a smartphone within five years and everyone who would want a laptop already has one. (See this report if you require convincing of this point.)
   
• The Effect: Hotels have been cut out as middlemen that provide access to content and communication. Such services are now provided directly to customers via wi-fi internet (for now) and mobile.
   
• The Result: Hotels can no longer expect meaningful revenue streams from delivering or providing access to content and communication. Not even for internet access.

Here’s a real-life example: Several resorts will need to replace their ageing in-room televisions within the next 24 months. Unlike in the past, however, the new TVs will have almost no ROI if traditional models are pursued. Why? Because the bottom has fallen out of video on demand revenues. Nobody watches video on demand anymore, not even pornography, because everything that the guests want is already available for “free” via internet or DVDs that guests bring along and access via laptops.

The natural progression from dwindling VOD (video on demand) revenues was to deploy and charge for internet access. Customers demanded this service, and it certainly made sense from a long-term revenue perspective, but mobile is already siphoning off this stream, too. The current generation of mobile phones operate as internet access devices in their own right and enable tethering for laptop internet access, too. As with land-line telephones and TV content, hotels are about to be cut out of the “wi-fi as revenue stream," too.

But all is not lost. Here’s the opportunity: Hotels must define new ways to curate and access content for the specific hotel/resort experience. Specifically, TVs and their programming need to be rethought from the ground up to act as tools that enhance guests’ exploration and sharing of the resort (here are a few ideas from a mobile point of view). TVs will remain very valuable to guests (for now) because they improve the viewing experience from guests’ phones and laptops. That is, they improve guests' ability to view their own content, along with anything of interest via the internet or created for exploring the resort. Special thought should be given to helping guests to connect their devices to TVs and to how guests will be interacting with content. The days of simply viewing content are coming to an end, and resort-specific programming should be proactive on this front.

In the end, TVs will still generate revenue but via different services like facilitating service orders, offering games, and promoting the hotel through social media, as opposed to watching first run movies and some content that just isn't appropriate for home or office.

Search Fragmentation is Coming - Be Prepared to Capitalize.

This week, a Google representative declared "in three years time, desktops will be irrelevant".  In December, Morgan Stanley stated "more users will likely connect to the Internet via mobile devices than desktop PCs within five years".   According to Compete.com Facebook now has more users than Yahoo.  This rapid increase in mobile and social screen time is changing user behavior and creating new types of searches - apps, friends,  music, photos, etc.  These changes will fragment new search queries away from Google and other universal search engines.  Google will continue to dominate desktop-based searching, but new smartphone and social searching will fragment to a host of players including Apple, Google and new companies.  These new entrants, including Twitter, have an opportunity to adopt Google-like PPC ad model to complement search behavior on their services. Some will simply copy Google and design an even better mouse-trap and APIs for ad/bid mgmt. Digital marketers need to follow these trends, begin testing and measuring new models and start gaining insights, revenue, profit and, most importantly, a marketing competitive advantage.

On this blog, I've labeled the last decade "The Google Decade".  Despite predictions of vertical search and resultant search fragmentation, it never materialized. In 2005, I remember search pundits predicting huge growth for vertical travel search. We have seen the emergence of meta-search sites like Kayak, but have also seen failures such as Yahoo's Farechase.  Vertical search never came to pass as Google added incremental features to their popular search service and creating Universal Search - local, images, blogs, maps, real-time Tweets (recently), etc.  For practical matters, Google's ground-breaking business, AdWords, only faced one competitor during the decade - Yahoo's Overture.  It's nice to be a fast-follower.  But, Google really focused on user experience and having the best search experience before they even added a revenue model through AdWords.  This is precisely the strategy of Facebook, Twitter and others.


Google and Apple are in an epic battle for smartphone market share that will continue through this decade.  Google hasn't faced competition like this since the early days with Overture.  Based on this chart, both Android (Google mobile OS) and Apple are gaining smartphone market share and, most probably, will win.  As I spoke about in my January post, Apple is focused on a new user experience and Internet navigation model that is not centered around Google search. Also, Google's launch into Social through Buzz has been challenging and could contribute to a loss of trust and Google's looming privacy bubble this decade.  So, will these trends and new user behaviors lead to the search fragmentation others have been predicting years ago?

Let's look at some predictions of things to come, how this will affect the way we search for things and how advertisers can capitalize on these changes.  

• Apple iWords - In a recent blog post, I wrote about the proliferation of mobile Apps.  I posited that on Apple smartphones, we are being trained to navigate the web through apps and Apple's App Store.  In fact, the screen area dedicated to search in a fraction of what you see on a typical PC browser.  Just like Google trained us to use Search to navigate the Net through a PC, Apple is training us to use their storefronts. Apple's PPC solution will tie relevant search ads to app searches. I am sure their are plenty of App developers and businesses that would love to reach this highly targeted user base.
• Twitter Search - Rumors abound that Twitter is about to launch a PPC model to compliment an improved Twitter search experience. This could work and provide a revenue model that doesn't interfere with the micro-blogging experience.
• Facebook Advertising - Facebook has already launched a Google-like self-service, auction-based advertising service.  While the user feedback has been bumpy, the hyper-targeting opportunity remains.  Facebook has wisely exposed their API allowing bid-mgmt and attribution tools to add Facebook to their systems.  It is not a stretch to see Facebook improving their on-site search experience and adding these targeted ads alongside the search results.
• Digital media mgmt technology will add new PPC platforms and optimize accordingly using holistic attribution tracking, measurement and optimization.

How should digital marketers prepare for these changes to come?  Let's look at a few recommendations. 

• Ramp up your knowledge about mobile, social, apps, etc.  Talk to experts, immerse yourself, read blogs.
• Launch Social strategy.  Target social search PPC at your target social profile based monitoring, listening as well as technographic and socialgraphic research.
• Launch Mobile strategy. How will users find your company from their mobile device?  What will the experience be like?
• Utilize a 3-pronged media management approach for Owned, Earned and Purchased media. Use media attribution and optimization.
• Test, measure and learn from everything.

What do you think about this blog?  Do you agree with my take on how this will upfold?  I don't have a crystal ball - just enough experience to have a point of view.  This is a process of collective learning where we all benefit through dialogue and debate.  Please add your comments below.  Thank you.